Page 316 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
ordering and payment apps. KFC China teamed up Many other international fast food/quick
with technology giant Alibaba Group to launch a service restaurants have been included local
mobile app that will give customers the option to favors in their international menus to cater to
pre-order and pay for their food before they get to Chinese tastes. But no only do menus need to be
the restaurant through the mobile app. Following localized, so does their retail experience in China.
this McDonald’s also began using mobile order- For many, fast food restaurants are the “third
and-pay at some of its restaurants in China to place”—an environment where consumers can
keep up with the growth in new technology among relax, be comfortable and socialize with others.
customers. International tourists have influenced While this localization strategy has initially worked
new menu ideas in the Chinese food industry as out pretty well for these brands, it is no longer
increasing urbanization levels and rising health enough to keep them competitive. The same
awareness has become apparent amongst trends that are shaping and sparking new growth
foodservice operators. Personalized menus for of many categories in China can also be observed
consumers cater to different tastes, flavors and in the fast food category: premiumization,
health concerns for example low fat or low-calorie personalization, hyper-convenience and the
content. In 2016 fast food chain McDonald’s prevalence of mobile first and online to offline
China launched 150 “create your taste” outlets (O2O) total experience. The combination of
across the country, with the new technology that these factors is increasingly crowding out the
aims to give quicker service to customers. The quick service restaurants markets and making
self-service kiosks give consumers the choice of it harder for household names to stay relevant.
the type of bread, condiments, number of patties With the increased sophistication of the Chinese
and burger toppings they want. The burger is middle class, consumers are expecting more
then prepared and brought to the customer’s exploration and diversity in their food choices.
table by employees (Lintott). They are also looking more ‘craft’ to their dining
experience and are demanding more authentic
Pursuing high-quality consumption is another and fresh cuisine, even in the context of fast food.
trend and consumers of all age groups prefer high- In addition, millennials and Gen Zs in China now
quality restaurants of more influential brands, as a seek to share their experiences on social media
result of consumption upgrading in the food service and actively search for food and restaurants that
industry. Members of the post-1970 and post-1980 are aesthetically pleasing. They also place more
generations prefer local cuisine and dinners with emphasis on the exploration and discovery of new
a higher unit price, while milk tea and drinks are taste and concepts and desire exclusive brand
favorites of the post-1990 generation, according to experiences of what is hot and trendy in not just
the 2019 Beijing Food and Beverage Consumption China, but San Francisco, NYC, Seoul, Berlin, or
Trend Report. Chinese fast-food outlets are account Paris. This presents a huge opportunity for niche
for 11.92 percent of all food and beverage outlets, brands to enter the more premium side of the
but Western fast-food outlets are the most active quick service restaurants market. With the right
ones due to high digitalization and easy takeout. balance of exclusivity and novelty, brands can
The study also found out that many businesses capitalize on the social currency they provide to
focused on local specialty snacks are transforming the consumers (Garbe).
to fast-food businesses to adapt to people’s fast
living pace. Male consumers contributed to 52.9 Food Delivery
percent of takeout orders in Beijing, compared with
female consumers, who placed 47.1 percent. About A big selling point of ordering food to the
96.6 percent of takeout orders were made for one doorstep in China is price, which, in the early years,
person, which sends an important signal to food and could be much cheaper than eating in-house.
beverage enterprises. Many companies adjusted However, toward the end of 2019, users in China
corporate strategy by promoting “small portion” noticed incremental price increases on their meals
takeout products as one of the measures to improve ordered the country’s largest food delivery apps.
efficiency in takeout food operations (Yang). The trigger? China’s food heavyweights have gone
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ordering and payment apps. KFC China teamed up Many other international fast food/quick
with technology giant Alibaba Group to launch a service restaurants have been included local
mobile app that will give customers the option to favors in their international menus to cater to
pre-order and pay for their food before they get to Chinese tastes. But no only do menus need to be
the restaurant through the mobile app. Following localized, so does their retail experience in China.
this McDonald’s also began using mobile order- For many, fast food restaurants are the “third
and-pay at some of its restaurants in China to place”—an environment where consumers can
keep up with the growth in new technology among relax, be comfortable and socialize with others.
customers. International tourists have influenced While this localization strategy has initially worked
new menu ideas in the Chinese food industry as out pretty well for these brands, it is no longer
increasing urbanization levels and rising health enough to keep them competitive. The same
awareness has become apparent amongst trends that are shaping and sparking new growth
foodservice operators. Personalized menus for of many categories in China can also be observed
consumers cater to different tastes, flavors and in the fast food category: premiumization,
health concerns for example low fat or low-calorie personalization, hyper-convenience and the
content. In 2016 fast food chain McDonald’s prevalence of mobile first and online to offline
China launched 150 “create your taste” outlets (O2O) total experience. The combination of
across the country, with the new technology that these factors is increasingly crowding out the
aims to give quicker service to customers. The quick service restaurants markets and making
self-service kiosks give consumers the choice of it harder for household names to stay relevant.
the type of bread, condiments, number of patties With the increased sophistication of the Chinese
and burger toppings they want. The burger is middle class, consumers are expecting more
then prepared and brought to the customer’s exploration and diversity in their food choices.
table by employees (Lintott). They are also looking more ‘craft’ to their dining
experience and are demanding more authentic
Pursuing high-quality consumption is another and fresh cuisine, even in the context of fast food.
trend and consumers of all age groups prefer high- In addition, millennials and Gen Zs in China now
quality restaurants of more influential brands, as a seek to share their experiences on social media
result of consumption upgrading in the food service and actively search for food and restaurants that
industry. Members of the post-1970 and post-1980 are aesthetically pleasing. They also place more
generations prefer local cuisine and dinners with emphasis on the exploration and discovery of new
a higher unit price, while milk tea and drinks are taste and concepts and desire exclusive brand
favorites of the post-1990 generation, according to experiences of what is hot and trendy in not just
the 2019 Beijing Food and Beverage Consumption China, but San Francisco, NYC, Seoul, Berlin, or
Trend Report. Chinese fast-food outlets are account Paris. This presents a huge opportunity for niche
for 11.92 percent of all food and beverage outlets, brands to enter the more premium side of the
but Western fast-food outlets are the most active quick service restaurants market. With the right
ones due to high digitalization and easy takeout. balance of exclusivity and novelty, brands can
The study also found out that many businesses capitalize on the social currency they provide to
focused on local specialty snacks are transforming the consumers (Garbe).
to fast-food businesses to adapt to people’s fast
living pace. Male consumers contributed to 52.9 Food Delivery
percent of takeout orders in Beijing, compared with
female consumers, who placed 47.1 percent. About A big selling point of ordering food to the
96.6 percent of takeout orders were made for one doorstep in China is price, which, in the early years,
person, which sends an important signal to food and could be much cheaper than eating in-house.
beverage enterprises. Many companies adjusted However, toward the end of 2019, users in China
corporate strategy by promoting “small portion” noticed incremental price increases on their meals
takeout products as one of the measures to improve ordered the country’s largest food delivery apps.
efficiency in takeout food operations (Yang). The trigger? China’s food heavyweights have gone
316
