Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Consumer foodservice by chained/independent; Consumer foodservice by type;
Consumer foodservice by type and chained/independent
Executive summary
Consumer foodservice maintains double-digit growth
In 2006, consumer foodservice in China continued its high value growth as
greater demand is evident from lower-tier cities such as Qingdao, Dalian and
Changsha. This is because consumer foodservice in first-tier cities such as
Shanghai is becoming mature and extremely competitive, leading to key players
expanding outwards towards second-tier cities. At the same time, healthy
economic development in second-tier cities has seen growth in disposable
incomes, which in turn has helped drive demand. Nonetheless, consumer
foodservice growth remained anchored in urban areas, in line with
urbanisation. Consumer foodservice in rural areas (mainly villages and small
cities) remains underdeveloped due to poor infrastructure, low disposable
incomes and local cultures of self-subsistence.
New concept consumer foodservice is gaining popularity
Growing disposable income in urban areas is pushing consumer demand to a
higher level. People are beginning to pay attention to new consumer
foodservice outlets in terms of design, innovative menus, healthy diet, new
themed venues such as bars for blind dating (Allen Club) and restaurants for
children (Rainforest Café. Among all these innovative concepts, naturally
healthy food (Element Fresh) appears to be very popular as growing numbers of
high-end consumers are becoming more interested in living quality lifestyles.
National players posing threat to regional brands
The rise of national chains is posing a significant threat to regional brands.
Particularly since large national chained restaurants or cafés/bars are
expanding rapidly through franchising, the well-established brand name and
high-quality service make them outperform small, regional brands within a very
short time. For example, Xiao Fei Yang is one of the leading brands that has
been rapidly expanding nationwide.
Localisation of international brands
After years of development in China, international brands such as KFC and
McDonald' s are adopting strategies of localisation well, because they are
realising that changing the local tastes will not be the best way to achieve
success and that customising their offer can bring higher profits. Most of the
international brands are planning to achieve further penetration into
lower-tier cities such as Urumqi, Shaoxing and Taizhou, and it is becoming
difficult to have local people accept Western cuisines in first-tier cities.
Therefore, the trend of localisation continues to be the top priority for
international brands. For example, Yum! Restaurants China launched its new
product within KFC outlets called Miao Ling Sour Soup (a special flavoured
soup originating from Yunnan province) to fuel consumers' interest in China.
Chained consumer foodservice is consolidating the market
Not only are the national players posing a threat to small regional companies,
it is the chained companies overall that are driving the market forward. Over
the forecast period, chained companies will grow much faster than independent
consumer foodservice units, and as long as the chained outlets are growing the
market will become more consolidated. Small independent restaurants will be
tempted to franchise themselves in order to achieve higher value sales; hence
the urban market is expected to be dominated by regional chains in the short
run.
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