The top management of KFC has for the first time made a public apology to consumers in China for the fake e-coupon claims circulating in chatrooms.

According to local media, Su Jingshi, CEO of the Yum-owned KFC China division, said the counterfeit coupon incident was mainly caused by the company’s lack of oversight. Su admitted the incident has done harm to consumers and to the KFC brand. He said KFC will take this incident as a cautionary tale for the future as it develops marketing plans in China.

On April 6, 2010, KFC launched e-coupons in major cities in China. Later the company announced plans to cancel the coupons after finding that some of the coupons were printed from unauthorized websites. The company’s behavior triggered widespread disputes in China among consumers.

Later, KFC posted an apology letter stating that it did not handle the issue in a timely manner and proper way for it was not fully aware of online security issues. It promised then that it would offer other appropriate promotions for consumers at a proper time.

E-coupons and digital discounts are a new way many retailers have increased brand loyalty in China. In many subway stations in cities like Shanghai, consumers can freely add digital discounts for eateries like McDonald’s and KFC to their mobile phones and websites have long provided ways to build viral marketing campaigns through the passing around of e-coupons.