Starbucks and Apple are facing price competition in China, but other U.S. consumer brands are thriving and looking to expand. Domino’s Pizza’s China operator, DPC Dash, reported strong same-store sales growth for the 26th consecutive quarter, with revenue tripling in 2023 and net losses narrowing significantly. HSBC analysts believe the company will turn net profit positive by 2025, with growth from new markets continuing to drive overall growth. Chinese President Xi Jinping’s efforts to bolster foreign investment in China are attracting U.S. companies, despite ongoing tensions in advanced tech areas.
Domino’s Pizza is making a significant impact in the Chinese market, with plans to open 200 more stores by the end of the year. Papa John’s is also expanding in China, with international revenue growing by 21% last year. Pizza is gaining popularity in smaller Chinese cities, with new Domino’s locations ranking among the top performers globally. DPC Dash’s CEO Aileen Wang highlighted the company’s success in new growth markets and its focus on value-for-money offerings. Despite cautiousness in the catering sector, DPC Dash is expected to gain market share and experience rapid growth from new market expansions.
Western food acceptance is rising in China, with companies like Yum China and McDonald’s seeing opportunities for growth. Yum China, which owns Pizza Hut in China, is set to release earnings in late April, while McDonald’s plans to double its store count in China by the end of 2028. DPC Dash CEO Wang noted that Chinese people are increasingly embracing Western food as their income levels rise. Despite consumer sentiment pressures in China, companies like McDonald’s remain optimistic about their growth prospects in the market, with expectations of good performance as consumer wealth and GDP continue to grow.
The Hong Kong Stock Exchange was closed for Good Friday, with plans to reopen on Tuesday. DPC Dash’s strong performance in China has attracted positive ratings from analysts, with expectations of continued growth and market share gains. The company’s success in new growth markets and its value-for-money position have positioned it as a top pick in the catering sector. While cautiousness in the catering sector is acknowledged, DPC Dash is expected to benefit from consumption trade-down and rapid growth in new markets.
In a time where U.S. firms are facing challenges in the Chinese market, particularly in the tech sector, companies like Domino’s Pizza are finding success and opportunities for growth. The massive consumer market in China continues to attract U.S. consumer brands, with companies like Domino’s and Papa John’s expanding their presence and revenue in the region. Despite economic pressures and cautious consumer sentiment, the success of companies like DPC Dash in new growth markets highlights the potential for continued growth and market share gains in China’s evolving consumer landscape.
