By LU Yibei

The operator of Domino’s Pizza in China DPC Dash filed for IPO in Hong Kong on Monday. Having doubled sales from 800 million yuan (US$1.3 million) to 1.6 billion yuan in two years, Domino’s is now the third-largest pizza chain in China and the fastest growing. The money raised will be used to fit new stores and improve IT systems.

Domino’s opened in China in 1997 and currently has almost 500 stores in ten cities, about two-thirds of them in Beijing and Shanghai. Rapid expansion is expected to continue to 2025 with the goal of becoming the number one pizza company in China. But Domino’s is still unlikely to beat its competitors in volume any time soon.

Top dog Pizza Hut has the largest chain with well over 2,000 restaurants in more than 500 cities and runs at a 5 percent profit margin. In contrast, Domino’s made a loss of 143 million yuan last year. On the brighter side, single-store sales have been improving, at 18 percent last year. 

Domino’s tries to be more affordable and more fun than Pizza Hut, which, unlike elsewhere in the world, is an upscale brand in China. Its menu is “both global and local” - teriyaki beef and potato pizza, for example. But Pizza Hut’s Peking Duck Pizza has long been a nationwide favorite.

The pizza delivery market in China, which reached 15.7 billion yuan in 2020, is now larger than that of dining-in and has been growing faster. Three-quarters of Domino’s orders are for deliveries, much higher than the industry average. As in other parts of the world, Domino’s runs its own delivery fleet and offers a 30-minute delivery guarantee. In 2021, 91 percent of orders were on time. It is active on all Chinese social media platforms, and frequently has new interactive games in its mobile apps, including WeChat mini-programs.

Domino’s International, the largest pizza chain in the world,  has more than 18,300 outlets in 90 countries. The parent company is bullish about growth in China, having invested US$40 million in 2020, and another US$90 million in 2021.