Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Investor Day (2019)
26 slides from Yum China's investor day presentation, 2019
Slide 1: Digital Transformation & Disruption
DIGITAL TRANSFORMATION & DISRUPTION Steven Li | CMO Leila Zhang | CTO
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: Key Takeaways
KEY TAKEAWAYS Powerful Digital Assets Disruptive Innovation Digital Driving Results Extending the Ecosystem Runway for Growth 3 3
Slide 4: Transformational Digital Evolution Since 2015
2015 2016 2017 2018 2019 Pizza Hut Omnichannel KFC KFC Super APP KFC/Pizza Hut virtual store Super APP Tmall Koubei Pizza Hut Tmall Pizza Hut KFC Mobile-order KFC Digital ordering Pre-order Tableside order AI Personalized Transformational Menu Alipay Digital Payment Wechatpay YUMC Pay Digital Evolut
Slide 5: Delivering Results Across the Business
Delivering Results Across the Business 46% 86% 47% ~60% Digital Digital Digital Digital Ordering Payment Member Sales Marketing Note: Data refers to Q4 2018 5
Slide 6: A Powerful Digital Ecosystem
KFC Member Mobile Pre-order Program Mobile Tableside order Pizza Hut Member Program Online Queuing E-gifting A Powerful Digital Delivery Ecosystem YUMC Pay K-Music K-Run Book Kingdom V-gold & Merchandise Privilege Program Throughout Various Dining Occasions Broad Customer Needs Customer Journey 6
Slide 7: Amplified Through Strategic Partnerships
Pre-order Payment Payment Ordering Animation & CSR Delivery Review Membership Gaming Privilege Program Amplified Through Databank Strategic Partnerships Payment Ecommerce Delivery Membership Finance DAMO Acadermy V-gold Book Kingdom K-Music E-gifting Ecommerce Music Animation Joint membership Celebr
Slide 8: Four Digital Assets Powering Digital Ecosystem
Four Digital Assets Powering Digital Ecosystem Super APP Uni- Payment Delivery / Lite APP Databank Options Platform • 87mn downloads • 180mn+ unique members • Delivery 3.0 across KFC and Pizza Hut V-gold Super APP Trade zone and • 62mn monthly active users • ~3mn privilege program multi-brand platfo
Slide 9: Super APP is at the Core of Ecosystem
Super APP is at the Core of Ecosystem
Slide 10: Innovation Powering Growth: Memberships
Innovation Powerin Growth 9 > a Memberships
Slide 11: Digital Assets Drive Stronger Member Sales
Digital Assets Drive Stronger Member Sales YUMC ARPU of KFC active members YUMC ARPU of Pizza Hut active members 1.8X 1.9X 2016 2018 2016 2018 Note: ARPU refers to annual spending per active member; active member defined as who transacted in the past 6 months 11
Slide 12: Privilege Memberships Drive Increased Frequency and Spend
Privilege Memberships Drive Increased Frequency and Spend Delivery Privilege Program Transaction% of Own Platform Monthly Spending Monthly Frequency (Q4 2018) 22% 2.1X 2.4X before during subscription* before during subscription* 1.6X 1.7X 17% before during subscription* before during subscription* *
Slide 13: Memberships Promote Daypart and Category Expansion
Memberships Promote Daypart and Category Expansion LUNCH participation BREAKFAST participation 2017 2018 2017 2018 48% 21% 37% 15% DELIVERY participation COFFEE participation 2017 2018 2017 2018 21% 15% 16% 11% 13
Slide 14: Comprehensive Omni-channel Drives Sustainable Traffic
Comprehensive Omni-channel Drives Sustainable Traffic Virtual stores V-gold Mall @Super APP Membership Store @Tmall, @Koubei KFC Pocket Store @Wechat Lite APP Group Buy Store @Wechat Lite APP Traffic Consumer Preference ~8,500 Physical stores 14
Slide 15: Open my own pocket KFC!
Open my own pocket KFC! Pocket store #: 想“加盟”肯德基吗？ 1.5 million 扫码开店赚福利 Peak Daily Active Users: 2 million
Slide 16: Creating Unique Personalized Experiences
K-music monthly order#: 800,000 times Creating Unique Personalized Experiences
Slide 17: Intelligent Marketing Increases Effectiveness
Intelligent Marketing Increases Effectiveness 2016: ~40% 2018: ~60% Customer Label #: >1,200 Digital Intelligent Marketing Marketing Awareness Interest Last mile Purchase Loyalty Uni-Data Bank 17
Slide 18: AI Menu: Personalizing the Consumer Experience
AI Menu: Personalizing the Consumer Experience Personalized Menu Personalized Trade-up Special offer • Family user • LTO & ice-cream lover • Historical party size 2.2 Sea-salt ice-cream AMY CNY bucket Special offer • Office worker • Rice & French fries lover • Historical party size 1.0 JOHN Rice com
Slide 19: In-store Digital Transforms Store Efficiency
In-store Digital Transforms Store Efficiency 5,600+ KFC stores with 50% POS reduction 2015: average 6 POS, large ordering area 2018: average 2-3 POS, large assembling area Cashier order 100% Digital order 75%* (Metro City store, Shanghai) * Since the store re-opened in early 2019 19
Slide 20: Fully Integrated AI Platforms Drive Operational Efficiencies
AI Transaction & Product Forecasting 5 variables Fully Integrated Improvement in Forecast Accuracy AI Platforms Drive Sales Location • Transaction Count Operational Weather Performance • Product unit Efficiencies Promotion Holiday Lowers risk of Less wastage Better labor scheduling product shortage"
Slide 21: Taking Delivery To The Next Level
Taking Delivery To The Next Level Intelligent rider platform transforming the relationship between customers, riders and stores Delivery 3.0 Delivery 2.0 Delivery 1.0 Manual Dispatch Automatic Dispatch Trade zone & Multi-brand Platform Restaurant base Restaurant base Trade zone based Exclusive rider
Slide 22: Disruptive Retail
Disruptive Retail : • Fully automated dessert station in Suzhou • 100 days in operation • Maximum 300 ice-cream cones sold per day
Slide 23: Data and AI Support Across the Business
Data and AI Support Across the Business 4 B U S I N E S S D O M A I N S Intelligent Intelligent Intelligent Intelligent Marketing Store Service Enterprise • AI+ Personalized Menu + Trade • AI+ Sales Forecasting • AI+ Dynamic Delivery Routing • AI+ Risk Management up Recommendations • AI+ Operation A
Slide 24: YUMC Digital Operating System – New Retail
Intelligent Supply Intelligent New Retail E-Sales & Distribution Intelligent Marketing Chain Restaurant YUMC Digital YUMC Digital Operating System Operating System TECHNOLOGY DATA AI – New Retail Consumers Products & Services Physical Space & Virtual Community 1.4 billion+ transactions in 2018 D A T
Slide 25: 2019 Priorities
INNOVATION POWERING GROWTH 01 World Leader in Restaurant Membership 02 Powerful Digital Ecosystem 03 Industry Leading Data + AI Capabilities 2019 PRIORITIES • Drive Frequency • Marketing and • Accelerate New Brand Growth • Expand Daypart Operational Efficiency
Slide 26: Thank You
Thank You Steven Li | CMO Leila Zhang | CTO