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Shanzhai Little Sheep 7,000 Miles Away from China

Joel on December 8, 2011 - 9:34 am in Archive, Key Observations

Yum! Brands’ ravenous appetite for market share in China’s casual dining and fast food industries has led to tremendous success. Yum!’s localized Pizza Hut and KFC menus keep Chinese consumers salivating over their next fubai foodie fix. As much as Chinese love fried chicken and pizza they’re still not part of traditional Chinese cuisine and, as a result, most Chinese will not eat western food more than a couple times per week. As a result, Yum! created its own Chinese fast food chain called East Dawning and acquired partial ownership of Mongolian hot pot chain Little Sheep.

Little Sheep proved to be such a worthwhile investment for Yum! Brands, that the Louisville Kentucky-based firm sought out to formally takeover the hot pot chain earlier this year. Seven months after it’s initial offer, China’s Ministry of Commerce approved the deal, which valued Little Sheep at more than US$860 million.

I have long had my eye on Little Sheep, first writing about the company in November of 2008. During a recent trip to Boston I can across a US-based shanzhai version of Little Sheep called Q Restaurant (小绵羊火锅). Q Hotpot’s Chinese name, Xiao Mianyang Hot Pot, is very similar to Little Sheep’s Chinese name Xiao Feiyang. Even more interesting was the striking resemblance between the two logos (see picture below):

Little Sheep Hot Pot



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