QSR GROWTH IN CHINA
“As the pandemic is not ending they are looking at ways to keep growth up in the next few years. China provides them a huge opportunity”
looking at ways to keep growth up in the next few years,” Chopra points out. “China provides them a huge opportunity.” On top of this, one of the Chinese
market’s great advantages is its size. “In emerging markets like China and India, the sheer size of the population and the fact that the penetration of foodservice consumption is still relatively low gives you a much greater opportunity,” says Chopra. Aside from the effects of the pandemic, competition and saturation in the foodservice markets of Europe and North America are inhibiting healthy growth, while there is major room to grow in China’s market.
market is expanding. GlobalData APAC research analysis director Sumit Chopra helps us dig deeper into what is happening in this market and what it means on a larger scale.
An exceptional market
The pandemic has had a profound impact on every market in the world, but China’s has been one of the fastest economies to begin to emerge from it. “China started lockdowns and initiatives earlier than other economies even realized the problem,” says Chopra. “While other markets in Europe, America and Asia are still grappling with the issue, China is well prepared.”
As a result, the China foodservice market has managed to bounce back
Left: The first Five Guys outlet in mainland China. Above: The delivery market has outpaced previous trends
significantly over the last 12 months, with growth seeming to be back on track. Yum China reported that revenue was up 46% in the first three months of 2021 compared to 2020, while net profit had surpassed pre-Covid figures. Meanwhile, many established markets are expected to take at least another year to recover. This means that Western chains
such as KFC, McDonald’s and Starbucks are subject to huge challenges in their local markets, in which they hold a dominant position but face suppressed demand. “As growth is stagnating and the pandemic is not ending, they are
Seizing the moment Many QSRs in China have identified the opportunity to benefit from the effects of the pandemic. As lockdowns, space restrictions and working from home encouraged people to order in rather than eating out, foodservice establishments such as fine dining restaurants were ill-prepared to pivot to delivery services. Meanwhile, models that already offered delivery were able to seize the moment: Yum China reports that 29% of KFC and Pizza Hut sales were delivery orders in Q1 2021, compared to 19% in 2019. “In emerging markets, delivery
market growth has outpaced previous trends, especially in the last six or seven months,” says Chopra, adding that consumers who previously wouldn’t have ordered in
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