Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Investor Day (2023)
23 slides from Yum China's investor day presentation, 2023
Slide 1: Adrian Ding, Chief Investment Officer & General Manager, Lavazza JV
Adrian Ding Chief Investment Officer & General Manager, Lavazza JV
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements. This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor
Slide 3: Encouraging Progress Has Been Achieved
Encouraging Progress Has Been Achieved 2 Growth Engines ~100 Stores in >2x Revenue YoY2 (Coffee Shop + Retail) 11 Cities1 ~70% Digital Orders3 2.4mn+ Members1 ~37% Delivery Sales3 1. As of Jun 30, 2023 2. 2023 1H vs 2022 1H 3. In 2023 1H. Digital orders include delivery and mobile orders 3
Slide 4: "Four-Pillar" Strategy Fueling Our Growth
“Four-Pillar” Strategy Fueling Our Growth Brand Building Menu & Calendar ✓ Strengthen brand equity ✓ Who We Are ✓ The Italian Coffee Icon ✓ How We Differentiate ✓ Co-branding ✓ “Blend” with Local Market Digital & Delivery Store Models ✓ Diversified digital presence ✓ Upgrade store design & experienc
Slide 5: Building Brand: Target Consumers
Continuous Blend Inventor Master of Espresso BRAND Ⅰ. BUILDING Innovation Brand Assets Young Gen-Z Target White-Collar Coffee Lovers Consumers Affluent Middle Class Family-Oriented Brand Experience Accessible Premium, Contemporary Italy & Embrace Local Market 5
Slide 6: An Immersive Experience to Bring Our Brand Essence to Life
An Immersive Experience to Bring Our Brand Essence to Life 6
Slide 7: Building Emotional Engagement with Consumers
Building Emotional Engagement with Consumers 7
Slide 8: Capitalizing on Co-Branding to Enrich Brand Awareness
Capitalizing on Co-Branding to Enrich Brand Awareness 8
Slide 9: Harnessing Athletic Sponsorships to Amplify Brand Exposure
Harnessing Athletic Sponsorships to Amplify Brand Exposure 9
Slide 10: A Holistic Way to Build Our Brand Equity in China
A Holistic Way to Build Our Brand Equity in China PRODUCT SERVICE STORE BRAND COMMUNICATION Consumer Feedback Ratings1 Dianping Meituan Eleme 4.89 4.91 4.92 4.31 4.31 4.28 4.85 4.84 4.86 4.03 4.71 4.03 3.90 4.22 Lavazza Brand A Brand B Brand C Lavazza Brand A Brand B Brand C Lavazza Brand A Brand B
Slide 11: Menu & Calendar
Ⅱ. MENU & Who We Are How We “Blend” with CALENDAR Differentiate Local Market ✓ Bean expertise & ✓ True local ✓ Italian-ness identity relevance Italian Ritual “Me-First” / “Me-Only” “Me-Better” Cappuccino KAFA Beans Buffalo Milk Latte “Me-Also” Cornetto Affogato Breakfast Toast 11
Slide 12: Who We Are
WHO WE ARE Espresso Cappuccino Emiliano Panettone Tigelle Cornetto 12
Slide 13: How We Differentiate
HOW WE DIFFERENTIATE Blended Coffee First Lavazza Bean First Coffee on Earth1 Bean Inventor Sourced from China Croissant "Inzuppo" KAFA Beans Roma Beans Yunnan Beans Latte “Macchiato” 1. The term "First Coffee on Earth" refers to the origin of KAFA coffee beans, which derive from the world's first c
Slide 14: "Blend" with Local Market
“BLEND” WITH LOCAL MARKET Buffalo Milk Coconut Bignola (Italian Puff) Flavored Cold Brew “Have It All” Set Cube Cornetto 14
Slide 15: Digital Ecosystem Partners Help Drive Our Digital & Delivery Sales
DIGITAL & Ⅲ. DELIVERY Digital Ecosystem Partners Help Drive Our Digital & Delivery Sales 2.4mn+ Total Members1 ~80% Non-Delivery Member Sales2,3 ~70% Digital Orders2 ~37% Delivery Sales2 * Douyin Local Services 1. As of Jun 30, 2023 2. In 2023 1H. Digital orders include delivery and mobile orders 3.
Slide 16: Leverage Various Digital Channels to Enhance Sales
Leverage Various Digital Channels to Enhance Sales Price Offering Price Offering Temperature Real-time interactions Size options Join membership Topping Nearby stores More Bean recommen- More dations Bean Flavor recommen- dations # of shots Coupon Milk options User reviews Mini Program Dianping Douy
Slide 17: Strong Delivery Capabilities Add Business Resiliency
Strong Delivery Capabilities Add Business Resiliency Close partnership with 3rd-party aggregators Leverage cross-platform events and traffic flow Operational excellence to improve customer experience 17
Slide 18: Keep Upgrading Store Models
STORE Ⅳ. MODELS Keep Upgrading Store Models 3 Model 2.5 (2023 onwards) 2 Model 2.0 (2022) ▪ Store design, consumer experience 1 Model 1.0 (2020 – 2021) ▪ Four differentiated formats & cost structure further improved ▪ More store variants for different sites ▪ Debut of three store formats ▪ Store cap
Slide 19: Distinct Store Formats Catering to Different Sites
Distinct Store Formats Catering to Different Sites FLAGSHIP STANDARD & LARGE 120m2+ 80-120m2 Prime, high traffic Composite locations trade zones Lavazza Hangzhou Tower 501 Plaza Store, Hangzhou Lavazza Golden Wheel-in Citi Store, Nanjing COMPACT LOBBY 40-80m2 25-40m2 Increase density in Offices & co
Slide 20: Contemporary Italian Design
Lavazza Springs Plaza Store, Shanghai Lavazza Golden Elephant City Store, Nanjing Lavazza GE World Store, Nanjing Contemporary Italian Design 19
Slide 21: Strategic Footprint in Key Cities
Strategic Footprint in Key Cities BEIJING CHENGDU WUHAN CHANGSHA NANJING SHANGHAI HANGZHOU GUANGZHOU SHENZHEN XIAMEN FUZHOU ~100 Lavazza Stores in 11 Cities1 1. Store count as of Jun 30, 2023 21
Slide 22: Go Beyond Stores with Lavazza Retail Business
Go Beyond Stores with Lavazza Retail Business Roast & Ground Beans Coffee Capsules Other Coffee Categories1 Make retail coffee a meaningful part of our consumers’ daily lives PREMIUM FINE HOTEL DINING To-B To-C VIP E-COMMERCE SUPERMARKET OFFICE LOUNGE 1. Graphs shown for illustrative purpose only 22
Slide 23: Become a Leading Experiential Coffee Brand in China
Become a Leading Experiential Coffee Brand in China Brand Menu & Building Calendar Digital & Store Delivery Models Aiming to reach 1,000+ Lavazza stores in the next 3-5 years 23