Page 312 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
2.12 Food Services
Key Take-aways concentrates on small groups of people bound by
a specific trait. The past couple of years have seen
China’s food industry is rapidly the rise of products geared to a certain group of
changing. As its population individuals (Peverelli).
continues to grow, foodservice operators have
to meet new consumer demands as tastes are China’s exploding middle class is old news but
changing and becoming westernized, and new for entrepreneurs, it continues to present an
technology is being introduced to the foodservice opportunity to develop new products and services
industry. that they want and can afford. Obvious examples
in the food industry are premium branded
Pursuing high-quality consumption has foods and restaurants, including higher-end
become a trend and consumers of all age groups food products and experiences. Startups in this
prefer high-quality restaurants of more influential category raised US$770 million in investment in
brands, as a result of consumption upgrading in 2018, up 172 percent on 2017 levels. At the same
the food service industry. time, however, and a relatively new development
in China, is the rise of technology targeting China’s
Background lower-income population. Emerging innovators
are targeting low-income consumers looking for
Since the 1980s, Chinese consumers have bargain food options and services and are finding
turned away from their traditional candies, pastries success in lower-tier cities. The opportunities now
and other snacks, replacing them with modern getting investors’ and entrepreneurs’ attention
industrialized versions, adapted to large-scale include consumer products that meet the lifestyles
production, or foreign alternatives. Referring to of lower-income cohorts and areas where data
any food as ‘rural’ or ‘hand-made’ was an effective can be leveraged and technology can be scaled
way of killing a product. However, after a number of (Burwood-Taylor).
decades of modernization, Chinese consumers are
now starting to look back to, what they believe to Robots in restaurants sound like a futuristic
be, original foods, as their grandparents produced novelty. But in China, kitchen-side automation has
them themselves, at home or on the farm. As a long been routine for some restaurants, fast food
result, private workshop-style enterprises are chains, and cafeterias. Automation is being used
popping up in Chinese cities, selling home (hand)- to standardize a centuries-old cuisine, potentially
made noodles, cookies, chocolates, cakes, pies shaping the taste buds of future generations. They
and so on. The trend is especially significant in the also provide an attraction for curious crowds.
larger cities. As for foreign companies, supplying It helps that the robotic arm, while reducing the
rural Chinese foods may not be an option, labor costs for the café, is supplemented by human
but you can position Western foods through staff who can answer questions and interact
branding. Products such as pies, sausages may with customers. The spectacle of a robot server
be industrially produced, could be promoted as does not always work well. In 2016, a Guangzhou
traditional products. Obviously, marketing should restaurant chain replaced its robotic servers due
reflect their rural artisanal background. Chinese to technical issues—namely, they were prone to
culture is collectivist but Chinese collectivism spilling things and unable to avoid collisions. A
hotpot restaurant in the same city also attempted
312
2.12 Food Services
Key Take-aways concentrates on small groups of people bound by
a specific trait. The past couple of years have seen
China’s food industry is rapidly the rise of products geared to a certain group of
changing. As its population individuals (Peverelli).
continues to grow, foodservice operators have
to meet new consumer demands as tastes are China’s exploding middle class is old news but
changing and becoming westernized, and new for entrepreneurs, it continues to present an
technology is being introduced to the foodservice opportunity to develop new products and services
industry. that they want and can afford. Obvious examples
in the food industry are premium branded
Pursuing high-quality consumption has foods and restaurants, including higher-end
become a trend and consumers of all age groups food products and experiences. Startups in this
prefer high-quality restaurants of more influential category raised US$770 million in investment in
brands, as a result of consumption upgrading in 2018, up 172 percent on 2017 levels. At the same
the food service industry. time, however, and a relatively new development
in China, is the rise of technology targeting China’s
Background lower-income population. Emerging innovators
are targeting low-income consumers looking for
Since the 1980s, Chinese consumers have bargain food options and services and are finding
turned away from their traditional candies, pastries success in lower-tier cities. The opportunities now
and other snacks, replacing them with modern getting investors’ and entrepreneurs’ attention
industrialized versions, adapted to large-scale include consumer products that meet the lifestyles
production, or foreign alternatives. Referring to of lower-income cohorts and areas where data
any food as ‘rural’ or ‘hand-made’ was an effective can be leveraged and technology can be scaled
way of killing a product. However, after a number of (Burwood-Taylor).
decades of modernization, Chinese consumers are
now starting to look back to, what they believe to Robots in restaurants sound like a futuristic
be, original foods, as their grandparents produced novelty. But in China, kitchen-side automation has
them themselves, at home or on the farm. As a long been routine for some restaurants, fast food
result, private workshop-style enterprises are chains, and cafeterias. Automation is being used
popping up in Chinese cities, selling home (hand)- to standardize a centuries-old cuisine, potentially
made noodles, cookies, chocolates, cakes, pies shaping the taste buds of future generations. They
and so on. The trend is especially significant in the also provide an attraction for curious crowds.
larger cities. As for foreign companies, supplying It helps that the robotic arm, while reducing the
rural Chinese foods may not be an option, labor costs for the café, is supplemented by human
but you can position Western foods through staff who can answer questions and interact
branding. Products such as pies, sausages may with customers. The spectacle of a robot server
be industrially produced, could be promoted as does not always work well. In 2016, a Guangzhou
traditional products. Obviously, marketing should restaurant chain replaced its robotic servers due
reflect their rural artisanal background. Chinese to technical issues—namely, they were prone to
culture is collectivist but Chinese collectivism spilling things and unable to avoid collisions. A
hotpot restaurant in the same city also attempted
312
