Where are the Chinese versions of “KFC” and “Starbucks”?

Small shops and large chains have become the most distinctive feature of the “Wandian Era”. Snacks, fast food and tea are undoubtedly the big winners.

When it comes to eating, the Chinese can pat their breasts and proudly say-we are number one.

Different from “powering with love”, we use our stomach to generate power, creating a miracle in the world’s catering industry under the epidemic.

The new crown epidemic has dragged the global catering industry into a dark “winter”. The tide of US restaurant closures on the other side of the Pacific , no matter how the US “releases water” to rescue the market, the decline cannot be stopped. 110,000 closed in a year, every 6 One restaurant is permanently closed.

The situation in Japan, a neighboring country on the sea, is not optimistic. Last year, the catering industry closed more than 5,300 stores, which even exceeded the 2008 Lehman crisis.

And our people just eat the “Xiaoyangchun” of the catering industry’s recovery. For the whole year of 2020, the registration volume of catering companies rose instead of falling, reaching 2.364 million, a year-on-year increase of 25.5%. According to data recently released by the National Bureau of Statistics, in the first half of this year, the GDP of my country’s accommodation and catering industry increased by 29.1% year-on-year.

The tenacious vitality of China’s catering industry is particularly evident in local chain catering brands.

  • Michelle Ice City opened nearly 20 stores a day in the first half of last year, taking the lead in the country’s first “Wandian” tea brand;
  • Qifentian launched the “Hundred Cities and Thousands of Stores” plan at the speed of installing a store in 15 days;
  • Laoxiang Chicken has become a Chinese fast food brand with thousands of directly-operated stores…

According to the “China Catering Big Data 2021” released by Meituan, the proportion of catering chain stores with a scale of more than 10,000 stores increased from 0.7% in 2018 to 1.4% in 2020, doubling in three years.

Zhengxin Chicken Chop, Wallace , Juewei Duck Neck, Michelle Ice City, etc. have all joined the ” Wandian Club”.

China’s catering industry is running into the “Era of Ten Thousand Stores”.

Chinese catering has been surging for more than 40 years

People rely on food as their heaven, which is the greatest livelihood of the people.

Our “food map” is not limited to a bowl and chopsticks at the family table, or a city and a pool under one foot. It is gradually breaking through the limitations of time and space and realizing “mobile phone in hand, eating all over the world”.

This was simply unimaginable in the past.

  • Although there were only 4 tables and 15 seats, the foreign embassy staff who came here made reservations more than two months later.

“Foreign fast food” also targeted the Chinese market.

  • In 1987, KFC opened in Qianmen, Beijing; in 1990, McDonald’s opened its first store in Shenzhen; afterwards, international brands such as Pizza Hut, Yoshinoya and Starbucks opened doors in China.

Where are the Chinese versions of "KFC" and "Starbucks"?

McDonald’s, located in Dongmen Commercial Pedestrian Street in Luohu District, opened on October 8, 1990. It is the first McDonald’s restaurant in Mainland China

These novel “foreign fast food” have brought brand new consumption and cultural experience to the Chinese people. When McDonald’s arrived in Beijing, it received 40,000 customers on the opening day. It is hard to imagine the popularity of the scene at the moment.

“Foreign fast food” has brought a new conceptual impact to the newly emerging domestic individual catering industry, such as the management experience of the store, the operation model of the brand chain store, as well as the supply chain, training system, etc., even the design of the restaurant to provide toilets. Called “novelty”.

To a certain extent, “foreign fast food” has played the role of enlightenment “mentor” of Chinese restaurant chains. A number of time-honored Chinese food brands such as Quanjude, Donglaishun , Guangzhou Restaurant, Xinghualou, etc. have completed the innovation and innovation of traditional crafts under this impact. The transformation of chain business model.

In the mid-to-late 1990s, the process of urbanization has accelerated greatly, and the catering consumer population has rapidly expanded. With the explosive growth of China’s shopping malls, the development of China’s catering industry has ushered in a new explosive growth stage of chain branding.

The proportion of catering business in shopping malls has gradually increased from the initial 10% to 40%. A number of chain brands such as Real Kung Fu, Grandma’s House , and Haidilao have become the golden signatures of many business districts.

In 2012, mass catering became the fastest growing catering market and the main force driving the industry to recover.

Faced with the individualized and diversified needs of mass consumers, the Internet has begun to penetrate the catering industry. From group buying to takeaway, “Internet +” has gradually penetrated and deeply integrated in food purchases, system management, online marketing, transactions and reservations, ordering, queuing, payment, and reviews.

User needs, business data, evaluations, etc. are transmitted to the restaurant owner through the platform, which helps them to accurately discover the restaurant’s room for improvement, such as the adjustment of the taste of the dishes and the improvement of service details. The emergence of takeaway platforms has greatly expanded the business radius of catering, and through the instant delivery network, people have more choices for dining.

At the same time, more and more catering chain brands are targeting a large number of “small town youth” groups and are beginning to “sink” to lower-tier cities.

The most representative one is Michelle Ice City. With milk tea and ice cream at a price of less than RMB 10, it blooms everywhere in third-, fourth- and fifth-tier cities, and has become China’s first tea brand with more than 10,000 stores.

“China Catering Big Data 2021” shows that the chain of China’s catering market has been accelerating, and the rate of chain catering has increased from 12.8% in 2018 to 15% in 2020. Brands such as Zhengxin Chicken Chop, Michelle Bingcheng and Juewei Duck Neck under the franchise model have surpassed the scale of 10,000 stores; under the direct management model, Haidilao and Xiangjiji have also surpassed 1,000 stores.

Where are the Chinese versions of "KFC" and "Starbucks"?

Small shops and large chains have become the most distinctive feature of the “Wandian Era”. Snacks, fast food and tea are undoubtedly the big winners.

A bowl of cumin-flavored Lanzhou ramen, a cheap Michelle ice city milk tea, and a crispy and delicious Zhengxin chicken steak. The “Wandian Era” has gradually emerged as a Chinese restaurant brand, which can feed our food. The stomach can also ignite our national pride.

The power behind running into the “Wandian Era”

Chinese catering has gone through more than 40 years of turmoil. From 1978 to 2020, its volume has risen from 5.48 billion yuan to 3952.7 billion yuan, an increase of more than 700 times.

We experience the speed of the catering industry through a set of data released by the China Cuisine Association:

From 1978 to 2006, it took nearly 28 years for the national catering retail sales to break through the 1 trillion yuan mark;

From 2006 to 2011, the retail sales of catering took 5 years and exceeded 2 trillion yuan;

By 2015, catering retail sales exceeded 3 trillion yuan, which took 4 years;

And from 3 trillion to 4 trillion, it only took 3 years…

In the past, it took several years for catering brands to achieve a breakthrough from “1” to “100”, but nowadays, from “1” to “1000”, it may be completed in 3 years.

What is supporting the running forward of China’s catering industry?

  • A number of leading chain brands have become “leaders.” The continuous improvement of the industrialization of the upper, middle and lower reaches of the catering industry, the support of a mature supply chain, and the improvement of the cold chain logistics system have laid the foundation for the chain of the catering industry. A number of top brands such as Haidilao, Michelle Ice City, Hey Tea, and Naixue’s tea have emerged.

The supply chain is the “killer feature” for the expansion of these top brands. For example, Haidilao is the number one king of supply chain construction in the catering industry. Honey snow Bard is also more than a decade of self-built supply chain, in order to Wumart advantage of inexpensive capture people’s hearts.

  • The entry of capital has accelerated the fission of the catering industry. In the first 30 years after the reform and opening up, the capital market was not cold about the catering industry. In recent years, as the catering industry has entered an era of rapid development, capital tycoons have begun to accelerate their “grabbing tables” and have laid out new tracks for catering consumption.

Tencent participated in the 450 million yuan round D financing of Hefu Lao Noodles , and merged into Xicha ; ByteDance invested in Hunan Sanfa restaurant and coffee chain brand Manner; Xiaomi Lei Jun invested 150 million yuan in 7fentian…

Where are the Chinese versions of "KFC" and "Starbucks"?

This summer, the capital boom in the catering arena is even higher. Forefoot Wuye Noodles announced the completion of 300 million yuan in round A financing, the largest round of financing in the catering chain industry, and the back foot and Fulao noodles raised 800 million yuan, the highest financing in the catering industry.

Capital stirs up the catering bureau, and a new generation of chain catering giants has gained a strong momentum for expansion. After the A round of financing, Wuye Noodles set the ambitious goal of opening “10,000 stores”.

  • Digitization has become the key to the “second half” of the development of the catering industry. Modern scientific and technological achievements such as the Internet, big data, artificial intelligence, and 5G are continuously integrated into various aspects of catering product development, consumer services, management and operation, and the traditional store operation model is integrated into the online and offline “Internet +” “new retail”, etc. With the changing model, the catering industry is entering a new digital era.

However, difficult to expand, difficult to manage, and easy to overturn, are still the “blockers” of many restaurant chains. The average lifespan of new domestic restaurants is only more than 500 days, and the failure rate exceeds 30%.

The empowerment of the Internet makes it easier and more scientific to open a restaurant. For example, in the past, choosing a location for opening a store was a matter of a university, and choosing a good location for a restaurant was more than half the success. The Internet can greatly improve the success rate of new stores through big data. The listed restaurant brand “Jiu Mao Jiu” uses Meituan big data to guide the location of new stores and decides on the research and development of dishes based on consumer preferences.

  • Sustained efforts on the supply side and young consumer power on the demand side are also emerging, becoming an important driving force in the “Era of Ten Thousand Stores”. The “2020 White Paper on New Tea Drinks” pointed out that in 2020, the number of consumers of new tea drinks will exceed 340 million, and the post-90s and post-00s will account for nearly 70%. With the development of the Internet, the young generation’s main consumer force is pursuing novel products, Internet celebrity brands and unique consumption scenarios. These are the necessary capabilities of the “Wandian Club” catering brand.

Driven by these forces, “China’s major restaurant chains have now repaired the expressway and it will be a matter of time before they can ride.” Yang Haiwei, president of the Chinese Restaurant, said in an interview with the media.

When will China’s “KFC” and “Starbucks” appear?

In the arena of chain restaurants, the United States was once recognized as the “big brother”, providing a reference for the development of China’s catering industry.

In the ranking of the “25 Most Valuable Restaurant Brands in the World in 2020” released by the United Kingdom, only Haidilao in China has entered the top ten list, while the US restaurant brands firmly occupy the top eight seats.

Where are the Chinese versions of "KFC" and "Starbucks"?

The American catering industry has gone through the traditional catering stage, the modern catering stage, and the emerging catering industry stage in the 21st century from its inception to the “10,000 stores era”.

In the 18th century, in the process of urbanization and industrialization, traditional American catering took off quickly. By 1917, the total amount of food consumed by Americans in restaurants exceeded the total amount of food consumed at home.

The birth of White Castle in 1921 marked the rapid growth of fast food restaurants. At this stage, fast food produced fast food through industrialized assembly lines, and seized the market through franchising and brand expansion. Gourmet fast food began to expand globally.

In recent years, as Americans have deepened their understanding of food health, casual fast food represented by “Chipotle” has sprung up. The fast food industry has also changed from simply “eat full” to “eat well”.

It can be seen that the development of China’s catering industry also has some of the characteristics of the second and third stages of the development of the American catering industry. Some people believe that, driven by the wave of global economic integration and the Internet, China’s catering industry may not only be a “follow-runner”, and we are overtaking on a curve.

  • First, China’s catering industry is still a blue ocean with huge potential.

my country’s per capita food and beverage consumption in 2019 was US$489, only 18% of that of the United States, and even far lower than South Korea (US$1,331) and Japan (US$1,277), which are similar to Chinese food culture and habits.

Baifu Holdings CEO Wang Xiaolong said: “If (China) reaches the per capita consumption level of the United States, the size of the Chinese catering market will not be more than 4 trillion yuan. This number is 26 trillion, which is no less than the scale of the auto market.

China also has the greatest demographic advantage. “Eating is a business of 1.4 billion people multiplied by three meals a day multiplied by 365 days. It is a big business. High frequency, rigid demand, and high viscosity. This is a huge market.” Yang Haiwei believes that the huge population size can be Cultivate big brands, tens of billions or even hundreds of billions of brands will appear, it is only a matter of time.

  • Second, the leading force in China’s catering industry is ready to take off.

In the United States, the concentration of catering brands is high. The market share of Top 5 catering companies in the United States exceeds 10%, and there are 52 listed catering companies. McDonald’s has more than 30,000 stores worldwide , KFC has more than 10,000 stores worldwide, Starbucks has more than 20,000 stores worldwide… These three “big Macs” are the main wave of the global expansion of American fast food companies. .

In China, there has also been a wave of catering brands in the market in the past two years, such as Haidilao, Guangzhou Restaurant, and Naixue’s tea . However, there are only about 10 A-share Hong Kong stocks in China’s listed catering companies. The turnover of leading catering companies accounted for less than 5% of the industry’s total. China’s self-operated and franchised restaurant chains accounted for only 19.6% of China’s catering, which is much lower than the 73.8% in the United States.

“Wandian Era” has filled Chinese restaurant people with imagination. In the past, Xibei proposed “opening 100,000+ stores”, Xi Shaoye proposed “opening 10,000 stores around the world”, and later Ali proposed to open 10,000 new fast food restaurants in 2-3 years.

  • Third, the taste of China is becoming more and more accepted by the world.

Over the past 40 years of reform and opening up, Chinese catering has become a representative element of Chinese culture. According to statistics in 2018, Chinese restaurants have settled in 188 countries and regions around the world, the number of restaurants is as high as 200,000, and many leading catering companies have achieved overseas development. For example, Panda Fast Food is a Chinese fast food chain focusing on Sichuan cuisine. It has opened chain stores in 47 states in the United States and has more than 2,000 chain stores worldwide.

In 2017, thanks to the popular cartoon “Rick and Morty”, the hero in the play ran to McDonald’s on the way to escape, and named the limited edition Sichuan hot sauce in 1998. Sichuan hot sauce surpassed the “Chinese hot sauce” in the United States. “Goddess” Lao Gan Ma .

We believe that in the turbulent period of the “10,000 stores era”, Chinese catering can have an increasing right to speak in the global market.

  • Fourth, the vitality of China’s catering in the post-epidemic era is stronger than that of any country.

With the acceleration of digital transformation after the epidemic, digitalization is gradually breaking the traditional thinking of catering companies, and the trend of online and offline integration has accelerated, which has also changed the catering consumption habits of many people. When the catering industry in the United States, Japan and other countries was still clearing up the “message”, the Chinese catering industry took the lead to recover, the market rebounded, and the popularity regained, and a hot and vibrant China appeared in front of the world.

Even China has led the world’s catering takeaway service trend, and even Japan has begun to “copy homework.” Statistics show that by January this year, the number of people willing to choose takeout in Japan has increased by 67% year-on-year, from 2.94 million last year to 9.02 million. The epidemic also spawned the rapid rise of DoorDash, the nation’s largest food delivery service platform, last year.

Some experts predict that by 2024, the size of the Chinese catering industry may surpass that of the United States, exceeding RMB 6 trillion.

Concluding remarks

Behind the huge changes in the catering industry is a huge change in the lifestyle of a generation, and it is also a historical symbol of the rise of China.

The catering industry has grown from scratch, from small to strong, from mom-and-pop snack bars to “Wandian” chain brands, from small-scale operations to capitalized operations, and from experience-driven to digital-driven operations. It is the result of the struggle of countless catering people.

Today’s catering people are no longer fighting for the diligent, high-quality and low-cost reputation, but also left-handed strategy, right-handed macro, financial paving, offensive speed, ecological chain, strategic value…

Of course, no matter how the catering industry evolves, the original intention is the happiness of 1.4 billion Chinese people.

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