Chinese losing taste for fried chicken

KFC's parent company has reported an 11 percent sales plunge in China over the past three months, with global profits down 68 percent. While safety scares and bird flu were once at play, experts say Chinese consumers' tastes are also changing, which could challenge the somewhat favorable position of Western fast food in China.

The oldest fast food chain in China, KFC, is losing customers. Earlier this week, it's parent company, Yum Brands, reported an 11 percent sales plunge in China, its biggest overseas market, during the third quarter. It cited bird flu and food safety scares as reasons, after KFC chicken was found containing high levels of a drug banned in China late last year.

But perhaps the biggest challenge facing the Colonel in China, is changing consumer tastes. With many saying they're cutting down on fried food in favour of options that are cheaper, healthier, and more Chinese.

This mother is one of them, limiting her daughter's KFC intake out of health concerns: "We only go to KFC once a year. Most days we cook at home. If we eat out, we eat Chinese fast food. I think it's healthier."

Others say KFC is still a treat: "I don't let my daughter go every day, but I take her there on special occasions, like her birthday."

But competition from Chinese rivals is rising. There's Dicos, serving soy-sauce chicken and fresh shrimp burgers at more than 1,500 outlets in China, and Babi Mantou, offering a range of steamed buns and dumplings at more than 1,300 outlets in second and third tier cities.

Joel Silverstein, CEO of East West Hospitality Group, says Chinese fast food chains are catching up, and that though KFC is still something people crave once in a while, Chinese people still like Chinese food better and see it as healthier.

With traditional tastes coming back, China's fast-food landscape could change much more in the years ahead.