Kyochon’s Counterattack After Losing the Throne in 2022 Begins
Launching Bold Discounts, Freebies, and Star Marketing Campaigns
The sales competition among the top three K-chicken brands?bhc, BBQ, and Kyochon?is intensifying. bhc, which claimed the throne in 2022, is selling its most popular menu item, 'Ppurinkle,' at prices from 10 years ago, while second-place BBQ is offering half a chicken free with every whole chicken order. Kyochon, which had long reigned as the strongest but fell to third place, is aiming to reclaim the throne by restarting star marketing featuring actor Byun Woo-seok.
Korea's leading chicken franchise BBQ announced that starting from the 23rd, the price of its signature product 'Hwanggeum Olive Chicken' will be increased from 20,000 won to 23,000 won, and 'Jamaica Tongdari Gui' will be raised from 21,500 won to 24,000 won. The photo shows a promotional board set up in front of a BBQ store in Seoul on the 22nd. Photo by Jinhyung Kang aymsdream@
According to securities and food industry sources on the 26th, Kyochon F&B, the operator of Kyochon Chicken, is estimated to have achieved consolidated sales of 121.5 billion KRW in the third quarter, a 9% increase compared to a year ago. Operating profit for the same period is expected to be around 8.5 billion KRW, similar to the previous year. Nam Sung-hyun of IBK Investment & Securities said, "Positive third-quarter results are expected due to growth in scale from seasonal peak demand and sports events, along with increased sales contribution from franchise regional headquarters switching to direct management."
With Kyochon F&B posting strong third-quarter results, attention is focused on whether there will be changes in the sales rankings among the top three chicken brands this year. Kyochon Chicken has long dominated the domestic chicken market for nearly a decade. However, in 2022, bhc overtook Kyochon Chicken for the first time to claim the top sales spot, marking a turbulent era. Last year, BBQ also surpassed Kyochon Chicken to take second place, pushing Kyochon down to third. Kyochon Chicken explained, "If sales had been the priority, we would have pursued franchise expansion policies," adding, "The decline in sales was due to refraining from opening new stores to strengthen internal stability," but the looming crisis was recognized as an undeniable fact.
Riding the momentum of strong third-quarter sales, Kyochon Chicken plans to continue the positive trend in the fourth quarter through star marketing. Recently, Kyochon Chicken appointed actor Byun Woo-seok as its brand model. Byun Woo-seok rose rapidly as a blue-chip in advertising after creating a sensation with the tvN drama 'Seon-jae Upgo Twieo.'
Kyochon Chicken had previously avoided star marketing. After actor Lee Min-ho was the last brand model in 2016, the company eliminated brand models and focused solely on enhancing chicken competitiveness. The decision to bring in Byun Woo-seok is aimed at regaining lost prestige. Kyochon Chicken launched brand marketing featuring Byun Woo-seok as the official model starting from the 23rd.
Last year, the sales of the top three chicken companies on a separate basis were bhc Chicken at 535.6 billion KRW, BBQ at 473.1 billion KRW, and Kyochon at 425.9 billion KRW. Realistically, the gap between first place and second and third places is large, so the possibility of a change in the sales throne seems slim. However, there could be a significant shift between second and third place.
Nevertheless, BBQ's momentum is formidable. Last month, BBQ ran a promotion through its own app offering half a Golden Olive Chicken free with the purchase of one whole chicken. As a result, sales through the BBQ app increased by 327% compared to the average sales of the previous three months. Due to consumer requests to resume the promotion after it ended, the half-chicken free event will continue until the end of this month.
bhc, determined to defend its throne, is also fierce. Since early this month, bhc has been running a promotion through its own app selling Ppurinkle at the 10-year-old price of 17,000 KRW. Consequently, Ppurinkle orders increased 34 times compared to the previous month. The share of Ppurinkle within the bhc app also rose nearly 20 percentage points from 33% last month to 52.1% this month. This ripple effect increased the number of bhc app users to 500,000, more than tripling compared to last month.
At a time when excessive delivery app commissions are controversial, the app promotions by BBQ and bhc are achieving a twofold effect of improving franchisee profitability while boosting sales.
An industry insider said, "Among the top three chicken brands, Kyochon Chicken, which alone fell last year, has finished strengthening its internal foundation and is planning a counterattack against bhc and BBQ, so the top three structure is expected to change for the time being."
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