Pizza brands refine growth plans in China

The pizza market in China is being reshaped by rapid expansion into lower-tier cities and shifting consumer preferences, forcing brands to rethink how they compete and grow.

Against this backdrop, DPC Dash Ltd, or Domino's Pizza China, reported another year of outsized growth in 2025, as aggressive store rollout and localization helped it pull ahead.

The operator said on March 25 that revenue in China rose 24.8 percent year-on-year to 5.38 billion yuan ($789 million), while adjusted net profit climbed 43.3 percent to 188 million yuan.

The results marked the fifth consecutive year of double-digit growth in both revenue and profit, positioning the company as one of the fastest-growing international quick-service restaurant brands in China.

"We have consistently delivered revenue growth above 20 percent since 2020, reflecting both the effective execution of our growth strategy and the compelling potential of Chinese QSR market," Aileen Wang, CEO of DPC Dash, said during an earnings call. Wang attributed the performance to disciplined execution and the long-term potential of the pizza segment in the country.

At the heart of Domino's China strategy is a robust store development plan, particularly in non-tier-1 cities, where competition remains less intense and consumer demand is rising.

Tier-1 cities continued to provide stable growth, supported by same-store sales gains and strong brand recognition. Revenue in these core markets rose 5.2 percent year-on-year to 2.2 billion yuan.

China has now become Domino's third-largest international market by store count. The company added a net 307 stores in 2025, entering 21 new cities and bringing its total store count to 1,315 across 60 cities nationwide. More than 60 percent of those outlets are now located outside the top-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, in Guangdong province.

These lower-tier markets are no longer peripheral. They contributed nearly 60 percent of the company's revenue in 2025, up from just over half a year earlier.

On New Year's Day 2026, Domino's China opened 62 stores across 46 cities in a single day, setting a global record for the brand. A flagship outlet in Dalian, Liaoning province, generated nearly 700,000 yuan in first-day sales.

The rapid expansion has been accompanied by improving operational metrics. Store-level EBITDA rose 20.4 percent to 1 billion yuan in 2025, while store-level operating profit increased 18.5 percent to 740 million yuan.

Growth was particularly pronounced in lower-tier cities, where revenue surged 43.4 percent to 3.17 billion yuan, accounting for 58.8 percent of total revenue. The increase was driven largely by the addition of 299 new stores in these markets.

The pizza chain has leaned heavily on localization and value positioning to attract younger consumers and increase order frequency.

The company refreshes its menu every six to eight weeks and launched more than 70 new products in 2025. It offers products such as the "Volcano" crust series, durian pizzas and limited-edition snacks.

Pricing has also played a central role. As Chinese consumers grow more price-sensitive, the company has emphasized affordability alongside its 30-minute delivery promise. Delivery sales in tier-1 cities rose to 76.2 percent of total revenue in 2025, up from 70.7 percent a year earlier, with delivery services now covering 76 percent of the cities where the brand operates.

Marketing efforts have focused on younger demographics, particularly Generation Z consumers. Collaborations with popular intellectual properties such as Snoopy and Kuromi, along with themed campaigns tied to holidays and viral visuals, have helped boost engagement on social media platforms.

The company's digital ecosystem is also expanding rapidly. Membership reached 35.6 million users by the end of 2025, up 45.3 percent year-on-year, with 15.4 million new customers added during the year. The growing user base is expected to support repeat purchases and improve marketing efficiency through data-driven promotions.

Looking ahead, Domino's China plans to maintain its rapid growth trajectory. The company targets 350 net new stores in 2026 and had already opened 140 by March 20.

"We will continue to execute our 'Go Deeper' and 'Go Broader' network expansion strategy, entering more new cities while further penetrating existing markets. At the same time, we will look to further improve cost efficiency as we continue to scale," Wang said.