• KFC mascot Colonel Sanders remains a popular figure in China.

KFC mascot Colonel Sanders remains a popular figure in China. (Photo : forbes.com)

KFC owner Yum China Holdings Inc. reported flat same-store sales growth for the full year, with an increase of 3 percent at KFC helping to offset a 7 percent decline at Pizza Hut.

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Cashless payments accounted for about 30 percent of sales, and Yum, the Chinese fast food company that was spun off from its U.S. parent in October, ranked no. 1 among restaurant operators in terms of online transactions in China.

There were 575 new restaurants opened by Yum China in 2016, with 302 of those in the fourth quarter, driven by KFC's development.

Partnering with Ant Financial, Alibaba Group Holding Ltd.'s payments affiliate, Yum China is nicely placed to accelerate mobile and online payments further.

KFC China also teamed up with search engine company Baidu to develop facial-recognition technology that can help provide "a personalized ordering experience" by "recalling repeat customers and their orders."

While it is not yet popular among customers, KFC and Baidu still hope that they will be able to provide "smart restaurants" that will work in the future.

Earlier this year, KFC China and Baidu teamed up for an "Original+" restaurant in Shanghai that lets customers make orders using Baidu's cute little Duer robot.

Yum China, which now has more than 7,500 stores in Asia's biggest economy, had to contend with the fading novelty of Western fast food brands, blows to its reputation from safety scandals and the rise of local competitors. Sales from its Pizza Hut restaurants were sluggish despite coming up with such unique products like Peking duck pizzas.

The company also faces rising labor costs and protests against foreign brands.

It also has to focus expansion in smaller cities, where the unhealthy reputation of Western fast food has less impact than it does in urban centers. If it can assure online convenience, the forecast is good, at least for the next 12 months.