I think if you look at the climate change initiative, it’s still relatively new. We are running it. We have plan for it, and we have submitted the — day targeting initiative for our plan. We are committed to achieving net zero emission by 2050. And so that’s a commitment that not only require us internally to make investment and improve our operations, but also work very closely with our supplier. And then in the future, we will also work very closely with our consumer, too, to make a sustainable environment to require everyone’s involvement. So it’s not that we would necessarily change, but we will work together and all the study and encourage our supplier base to also work toward that goal with us as well. And so that’s how generally we think about our supply chain initiative versus the ESG initiatives, especially climate change.
Joey Wat : Last two points to add is. One is when we talk about investment in supply chain responding to ESG, some people naturally think that, oh, that means margin impact, that means additional investments. I have to emphasize that in Yum China’s philosophy, that means that the investment must have a desired payback. It does not mean that we just justify the additional investment, because it’s the right thing to do. It has to be the right thing to do now in the future, it has to be sustainable for the business as well. So one example is we invest in little measurement meters in the store to measure the usage of energy. Well, the original — the little cute equipment is very expensive. It does not justify our payback because our overall, if you think about store economics, two years, three years, well, we have to towards that direction.
So what did our teams do? We worked with the suppliers of that little cute equipment, get rid of the bells and whistles. So it’s very affordable. And we install them in our stores. And the saving is enough to justify the investment. So the payback is still protected. So that’s one discipline. And we also share whatever we learn with our supplier to help them. So that’s point one. Point two is supply chain. I’m personally very excited about this area, and my team is very, very passionate about it, too, because there are some really fun and exciting innovations happening in the last few years here. And I can share one with you. During the Shanghai lockdown, during the Shanghai lockdown, we have one warehouse. Well, we have 33 logistic centers to supply the chicken to different province.
We have one warehouse to supply the package, the paper bulk, the bags, et cetera, for our stores. But that warehouse, what happened, was in Shanghai. And Shanghai was completely lockdown. And that is the serious business, right? How can we keep our stores open without the packaging paper, the wrapping paper? Well, our team, which is a brilliant team, when we are faced with such challenges, we came up with even more brilliant solution. That’s when we start to build a logistics site in the most nearby port within a week, and we start to ship this packaging material through sea freight. One direction went to the north, to Tianjin, and then distribute from Tianjin to cover the entire northern part of China. One went down to Guangzhou, it covers the southern part of China.
Well, what happened to the middle part of China there? Well, the railway. The railway can stop everywhere without the problem of lockdown. So some part of these packaging materials get on the train and went to Chengdu and Wuhan, everywhere. And we are okay. So now you can imagine, in the past, when we opened a logistics center, we look at the trucks, now we look at the trucks, the rail and the sea freight, everything. I love it. I think that’s the way that we shall do our business in the past few years and going forward. It’s fun. Thank you.
Ethan Wang: Great. Very useful.
