Domino’s Pizza China operator plans to list in HK

Domino’s Pizza China operator DPC Dash is looking go public on the Hong Kong stock exchange, according to an online filing. The document noted that Domino’s Pizza has a 15.7% stake in DPC. 

DPC claimed in the filing to be Domino’s Pizza’s “exclusive master franchisee” in mainland China, Hong Kong and Macao, with 485 directly operated stores in 10 cities in the mainland. It added that it plans to open 120 new stores in 2022 and that “it adapted and built upon the Domino’s business model by localising its key features” for Chinese consumers.

This has enabled it “to become the fastest growing among China’s top five pizza brands, as well as the third largest in terms of 2020 revenue”, according to the Frost & Sullivan Report.

In the long term, its goal is to become the number one pizza company in China.

Strategies in Chinese market

The DPC filing shared that its revenues increased by 32.0% from RMB836.6 million in 2019 to RMB1,104.1 million in 2020, and further increased by 45.9% to RMB1,611.3 million in 2021.

The strategies were:

Serve a menu that is both global and local: The menu infuses the classic, globally-renowned taste of Domino’s Pizza with local flavors. It includes classic western favorites designed for Chinese palates, such as our teriyaki beef and potato pizza (照燒風味牛肉土豆比薩).

Be a delivery expert: DPC is focused on providing customers with a differentiated delivery experience and offers customers a 30-minute delivery promise, which it stands behind by gifting them coupons if we do not fulfill their delivery order within 30 minutes from the time they place their order.  It has its own fleet of dedicated delivery riders allowing for timeliness.

Enhance our business with technology: Approximately 95% of its delivery, carryout and dine-in orders in 2021 placed online, higher than the industry average of less than 70%, said the filing. To attract customers, it claims to use intelligent marketing strategies powered by data insights.

“We make order placement easy for customers through our intuitive online channels. Our proprietary customer data platform enables us to understand and serve our customers’ specific needs, helping us attract more repeat customers. These customer-facing technologies are complemented by our delivery and supply chain management technologies, which enhance our operations by helping to ensure the quality and safety of our ingredients, as well as the timeliness and reliability of our deliveries,” said DPC.

Drive store unit economics and growth: In 2021, its store-level operating profit was RMB148.6 million, while store EBITDA (non-IFRS measure) – a measure used to evaluate the profitability of stores – was RMB242.2 million, representing a Store EBITDA margin (non-IFRS measure) of 15.0%.

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