Here in the U.S., we're accustomed to ordering out for pizza from Papa John's (Nasdaq: PZZA) or Yum! Brands' (NYSE: YUM) Pizza Hut, but when it comes to the fast-food giants, we know we've got to peel ourselves off our couches and go and get our burgers and fries. However, McDonald's (NYSE: MCD) doesn't mind delivering these days -- in places like China, that is.
My first reaction to this plan was that it sounded bizarre, particularly in an incredibly populous country. The Reuters article that covered the story described this as a competitive volley against Yum! Brands in China, which has twice as many restaurants and already offers home delivery.
So far, McDonald's only delivers in Shanghai, using a fleet of 300 motorcycles to speed the eats to customers. In an interesting note, McDonald's depends on an independent firm to provide delivery, while Yum! has built its delivery service in-house.
Reuters also reported that McDonald's offers delivery more often than I realized -- apparently it also delivers in more than 25 countries, including India, South Korea, and Malaysia.
International expansion isn't always easy, and I can see how that must be creating a hyper-competitive climate for corporations that are trying to gain advantage in certain highly populated markets like China. Given Yum!'s head start in China, I can see why McDonald's wouldn't want to give an impression of not being dedicated to customer service and convenience there.
From a shareholder point of view, such moves also show companies' willingness to take on -- and succeed with -- the challenge of evolving. After all, not only do consumers evolve, but cookie-cutter formulas don't necessarily work overseas. For example, I'm curious how megaretailer Wal-Mart (NYSE: WMT) will fare in tough markets like Japan, where consumers may be searching for than just low prices. And even Starbucks (Nasdaq: SBUX) got the boot from China's Forbidden City, illustrating that some spots are sacred, even for Starbucks. (And of course, offering Starbucks products in Indian movie theaters is a good example of a willingness to get creative.) Meanwhile, McDonald's itself has shown signs that it's willing to try new things to charm other cultures.
Last but not least, the current problems with consumer spending here in the U.S. further underline how international expansion can help corporations hedge against slowdown. To achieve this end, creative thinking may be tantamount for many U.S.-based corporations.
