The trend: More quick service restaurants (QSRs) are relying on outside expertise to stay relevant in China.

• Restaurant Brands International (RBI) struck a joint-venture deal with asset manager CPE as it looks to more than triple Burger King’s China store footprint by 2035, per The Wall Street Journal. As part of the agreement, CPE will spend $350 million to fund store openings, marketing, menu innovation, and general operations in exchange for an 83% stake in Burger King China.
• Starbucks sold a 60% stake in its China business to private equity company Boyu, a move the coffee chain hopes will deepen its understanding of local consumers and reverse its decline.
• Subway is on track to open 300 to 500 stores annually—and perhaps more—with the help of franchisee Shanghai Fu-Rui-Shi Corporate Development. The company recently opened its 1,000th store in the country, and sees potential for as many as 10,000 locations, Subway China CEO Zhu Fuqiang told local media.

A smart move: Seeking local partners is a sound strategy for QSRs, given significant differences in culture and consumer preferences.

• While US consumers are moved by nostalgia, Chinese customers demand newness. “The pace of change and the pace of innovation [in China] happens at an even faster pace than it does” in the US and other markets, RBI CEO Joshua Kozba told The Journal.
• That relentless thirst has been especially challenging for Starbucks, which has struggled to refresh its menu fast enough to accommodate consumers’ taste for novelty and keep up with rivals.
• Greater local expertise could also smooth expansion into smaller cities, where the economic situation is more stable and growth opportunities are strong.

Our take: More Western brands would do well to seek out local voices to guide their expansion in foreign markets, be it China or elsewhere.

As Chinese consumers grow more discerning—and more inclined to choose Chinese brands—the pressure is on companies to show that they understand local trends and preferences. Partnering with Chinese firms could help provide that expertise and ensure longevity in a challenging—but hugely important—market.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.