BEIJING — BEIJING -- Walk into any of the more than 30 McDonald's in this city during lunchtime and you might think they were giving away hamburgers instead of selling them.
At the McDonald's across from Tiananmen Square, Chinese customers crowd five-deep around the counters, pushing their way toward the cash registers. Seats are so scarce that some people eat their McChicken sandwiches while standing in the aisles. Outside, children pose for photos with a life-sized statue of Ronald McDonald on a wooden bench that permanently sags from the weight of so many visitors.
American fast food is one of the most popular and most obvious imports arriving on the streets of China every day as U.S. and other foreign companies try to corner a piece of this 1.2 billion-person market.
In the past 10 months, branches of Dunkin' Donuts, Domino's Pizza, Subway, Chili's and Dairy Queen have opened in Beijing. Many local supermarkets carry U.S. products, from Oreos and Head & Shoulders shampoo to Skippy peanut butter and Pabst Blue Ribbon beer.
Economic reforms by the late Deng Xiaoping sparked this rush of foreign consumer items and restaurants. Although there is still a large gap between wages in rural and urban areas, average Chinese incomes have risen to about $60 a month -- nearly double what they were 2 1/2 years ago.
Foreign firms have made huge investments here in hopes of capturing the fancy of the country's emerging middle class and those with higher incomes. Some thrifty Beijing shoppers say that they think U.S. goods are often of higher quality than their Chinese counterparts, but complain that they are still too expensive.
Tide vs. White Cat
In the Jianhua Shop, a grocery store about two miles east of the Forbidden City, Procter & Gamble's Tide detergent vies with White Cat, a Chinese brand from Shanghai.
Procter & Gamble is one of the most visible U.S. firms in China. But not surprisingly, the plastic bags of Tide that sell for 67 cents are not as popular as the bags of White Cat, containing 50 percent more laundry soap and selling for 9 cents less.
"Chinese people don't believe that the quality is that much different," says Dai Yan-Ping, who earns $54 a month as a clerk at the store. And, after all, "Nine cents is 9 cents."
Down the aisle stroll Chen Shiyu and her friend, Li Lan, carrying a tube of Colgate toothpaste. They have picked it up not because it is American but because they've seen it advertised on TV -- and because at 47 cents the price is hard to beat.
"The most important thing for us is the price," says Chen, a 40-year-old accountant, "not where it is made."
For an American, spotting U.S. products in a grocery store here is easy because they are familiar. For Chinese, though, they are sometimes hard to recognize.
"I don't know where this is from," says Chen, picking up a green, plastic bottle of Rejoice shampoo, which she often buys. Except for the word "Rejoice," the rest of the lettering on the bottle is in Chinese and makes no mention of the United States. One has to look at the small print on the back to learn that it is made by Procter & Gamble.
Some U.S. firms emphasize their products' U.S. roots. Packaging for Oreos announces in Chinese and English that it is "America's Favorite Cookie." Act II microwave popcorn features a cartoon popcorn kernel wearing sunglasses, a crown and carrying an U.S. flag.
Other companies, though, try to insulate themselves from bouts of Chinese nationalism and take the same low-key approach as Procter & Gamble. As one U.S. Embassy official says: "Why tie your wagon to something that can change?"
Some say that many U.S. goods sell for higher prices than their Chinese counterparts because they are of higher quality. But the price difference would be even larger if these American brands were not made in China and subject to import tariffs of 40 percent to 80 percent. The cost of shipping and other taxes pushes the price of most imports far beyond the means of many Chinese.
For example, a bottle of Sutter Home White Zinfandel from Northern California costs $4.99 at Annapolis Wine and Spirits. It is $18.13 in Beijing.
But some U.S. products made in China would be a bargain in the United States. The Big Mac special at McDonald's -- which includes medium fries and a medium coke -- costs $2.34 in xTC Beijing. A nearly identical meal at a McDonald's in Towson is $3.14.
Some U.S. companies owe part of their success to having arrived in this market early. Coca-Cola was selling soda in China before the 1949 Communist revolution and returned soon after Deng Xioaping opened the country to the world in 1978. Today, Coca-Cola has one of the highest name recognition's among foreign products -- 62 percent.
But in the battle to capture the attention of consumers, American companies can't match the Japanese. The Gallup Organization in 1995 conducted a nationwide survey to measure recognition of 100 brand names. Although the survey included nearly twice as many U.S. brands as Japanese, six of the top 10 came from Japan: Hitachi, the electronics company, placed first with 65 percent, followed by Coca-Cola. Mickey Mouse placed seventh with 54 percent and Marlboro eighth with 51 percent.
U.S. companies also have succeeded in China by catering to Chinese tastes. KFC is a natural in a land where people prefer chicken to beef. Sitting in a KFC recently, a Chinese woman said she enjoyed dishes such as the spicy chicken wings because they remind her of the hot food from her home in Hunan Province. While McDonald's emphasizes hamburgers in the United States, three of its four specials in Beijing feature chicken and fish.
Selling jelly doughnuts
Newcomers such as Dunkin' Donuts -- now owned by a British conglomerate -- may have a tougher time selling the concept of a jelly doughnut.
"They don't know that doughnuts are for breakfast," says company representative Donny Huang. At a newly opened Dunkin' Donuts in one of the city's embassy districts, employees are unfailingly polite, opening the doors for customers and smiling constantly. But some haven't quite got the hang of doughnuts yet. When placing a Boston creme doughnut with chocolate icing in a bag recently, one of the clerks put it upside down.
And for all the talk of buying a good product for a low price, ## many Beijingers are willing to pay more for style and image.
Li Jianyiu is strolling through Price Smart, a cavernous U.S.-style discount store that opened in January and charges a $24 membership fee. Wearing a pair of fake Nautica shorts emblazoned with an American flag, he says he doesn't buy many U.S. products.
But Li, who earns $483 a month working for a private shirt manufacturer, plays basketball and recently spent a week's salary on a pair of Nike sneakers. He bought them not only for their quality, but also because he likes the commercials with Michael Jordan, who is known here by his phonetic Chinese name "Qiao Dan" (pronounced "Chee-ow Dan.")
"I like how the shoes look," Li says, drawing the Nike "swoosh" symbol in the air with his index finger. "I think they are beautiful."
Pub Date: 9/17/97