Shanghai, September 13, 2019 –According to China Foodservice Report: Market Movement Highlights, the latest report from The NPD Group, Inc., of all restaurants and cuisines in China, 59% are Chinese quick service restaurants (QSR), also known as fast food restaurants, and Chinese full service restaurants (FSR). While there are thousands of Chinese cuisine types to choose from in this segment, hotpot is the largest, representing 11% of the Chinese QSR and FSR market.
Non-Chinese QSR and FSR restaurants such as Western and Italian, make up with 22% of the restaurants in China, followed by snacking-oriented such as bakeries and dessert shops with 7%. The remaining 12% consist of all other types of cuisines, including those found at vendors and retail stores. Merging retail with foodservice has become increasingly important in China. Some foodservice brands also developed retail-like products to sell in retail channels, or via delivery, to reach more consumers; and retailing manufacturers are also actively exploring foodservice.
“Thanks in large part to Millennial and Gen Z consumers, the foodservice industry in China has experienced rapid evolution in the marketplace, as well as in consumption behaviors,” said Stanley Kee, Managing Director, APAC, The NPD Group. “Millennial and Gen Z consumers are inherently more open-minded and willing to explore innovations. Their diverse needs and fast-changing habits are driving new technologies and changing the way business is done.”
Diverse Market Presents Opportunities like Product Fusion
Whether it’s a bakery offering traditional Chinese desserts with western flavors like cheese and cream, a hotpot restaurant offering free nail polishing services while customer wait for their food, or even a fitness club selling low-calorie foods to complement their fitness classes, fusion across channels is driven by the rising need for variety, expanded service, and categories. This is an opportunity for incremental growth for foodservice operators and myriad other retailers.
In 2014, only 11% of all restaurants in China offered product fusion. Back then, fusion was led mostly by western brands offering localized products. Today, that number has increased to 13% thanks to Chinese brands and snacking channels adopting fusion, allowing for product innovation and more diverse offerings across more categories.