A cook serves separate dishes to customers at a restaurant in Chengdu, capital of southwest China's Sichuan Province, April 15, 2020. (Xinhua/Li Mengxin)
BEIJING, June 3 (Xinhua) -- China's catering industry pocketed nearly 4 trillion yuan in revenue in 2020, down 16.6 percent year-on-year, according to the report "Big Data of China Catering 2021" published on May 27.
As a prominent pillar industry to ensure people's living standards and secure employment, this is the first time in recent years that the catering sector did not outperform the general consumer market.
But the catering industry has been experiencing an encouraging and steady recovery with numerous highlights, the report noted.
-- Regain the Business Vitality
The catering industry showed rebound trend after the fight against the pandemic entered the crucial phase in March 2020, with the number of restaurant companies registered for the year rising to 2,364,000, a 25.5 percent year-on-year increase, taking lead in terms of regaining vitality compared with other industries.
Specifically looking into the ordering for local specialties, order volume dropped to the lowest point in February of 2020, recovered to pre-pandemic level in May, and peaked in October with 172 percent year-on-year increase.
The data further presented a high-quality trending for local specialties development with the share of more than 60 yuan per order growing in 2020.
Meanwhile, Chinese restaurant brands such as Haidilao and HEYTEA have also performed outstandingly in terms of scale expansion, structural adjustment and digital transformation. The continued expansion of Chinese restaurant chain brands has brought significant benefits in promoting domestic consumption and economic growth.
Under the new development paradigm of "dual circulation" where domestic and international markets boost each other and domestic market as the mainstay, China would further promote the opening and sharing of the market, expanding domestic demand with the deepening of supply-side structural reform to head for high quality development.
With its steady long-term growth, China has become one of the most dynamic food and beverage (F&B) markets in the world with fundamentals show a steadily improving trend for the long term, the report notes, pointing out that such promising market also share opportunities with both domestic and foreign brands thus becomes an essential driving force for the recovery of the world's F&B industry.
For instance, Starbucks' Q1 financial report showed the company's recovery was most evident in its China business, with same-store sales growth of up to 91 percent; Yum China opened 1,165 new stores in 2020, the highest in its 33 years of operation in China.
-- Spread the Brand "Down"
China's population has exceeded 1.4 billion and registered an increase of 5.38 percent compared to 2010. Of these, the population in cities and towns is 901.99 million, with urbanization ratio up by 14.21 percentage points over last decade.
This, as the report notes, laid down a solid foundation for the recovery and growth of China's F&B consumption.
Since 2020, active restaurant brands in first-tier cities have been rapidly moving down into lower tier markets to "conquer" third and fourth-tier cities. Yum China, for example, is mulling to open about 1,000 new stores in the coming year, with the company currently tracking more than 700 "blank" cities for store openings.
Moreover, the second, third, fourth and fifth-tier cities were less affected than first-tier cities by the pandemic, providing regional brands a headstart and explosive growth in 2020.
GoodMe Milk Tea, founded in Taizhou of Zhejiang Province, for example, opened 4,097 stores in 18 provinces and 139 cities nationwide by the end of 2020, 1,388 more stores compared to 2019, with single-store revenue growing 37.1 percent on year; TianLaLa, which originated in Anhui Province, has more than 3,000 stores so far and has the number of stores doubled for five consecutive years.
-- Tech a Digitalized Ecology
The rapid development of new technologies such as 5G, artificial intelligence and big data has led to new consumption models, new business modes and new industry landscape.
With online and offline integration in recent years, adding prevention and control need against the Covid, takeaway and home delivery have become mainstream for consumers.
Online catering orders in 2020 showed strong rebound trend. Since May 2020, online catering order volume recovered to the level of the same period in 2019, and continued to explode in growth in the following seven months, achieving a year-on-year growth of 107.9 percent by year-end, the report shows.
During this period, online ordering ways such as takeaway platforms and WeChat Mini Programs further opened up the potential of catering brand companies' digital development and accelerated the shift to online operations.
In the face of the ever-changing catering market, restaurant practitioners need adpting fast to new consumption trends, so as to make accurate adjustments in terms of business operations and create own path of brand development and growth, experts suggests.
-- Head towards "Chaining" Era
China's F&B market is accelerating chaining. The Report shows that the chain rate of China's restaurant market was 12.8 percent in 2018, growing to 13.3 percent in 2019 and accelerating to 15 percent in 2020. Compared to the U.S. restaurant chain rate of 50 percent, China's catering business still has extensive room for growth.
In terms of brand distribution, the market sees the most chain brands scale themselves within 100 stores, followed by those who scale 100-500 stores. Also, the market is seeing some more brands owning up to more than 10, 000 stores.
The report data also presents that there are 10,000-store chain brands emerge in fast food, snacks, beverages and other forms of business in recent years , showing that domestic catering industry is entering a new era of large-scale, branding and standardized development, according to Wang Hongtao, executive deputy secretary general of China Chain-Store & Franchise Association.
Branding is crucial for the development of restaurant chains, and this also requires deep insight into consumers' need, experts say.
Looking ahead, continuous innovation and integration application of the Internet will provide strong technical support for attracting new consumption and developing new retail models, as well as promote the development of the catering industry in the direction of networking, retailing and digitalization, bringing more opportunities and momentum to the industry, industry insiders note.
(Edited by Niu Huizhe with Xinhua Silk Road, niuhuizhe@xinhua.org)
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