Foodservice profile – China

Note: This report includes forecasting data that is based on baseline historical data.

Executive summary

China is the largest populated country globally with 1.4 billion inhabitants in 2020.

China's economy slowed sharply in 2020 due to the impact of measures taken to control the covid-19 pandemic, both domestically, and externally.

Consumer spending, during and evolving from the pandemic, has caused the Chinese consumer to re-evaluate their needs and priorities, shifting from conspicuous consumption to more self-sufficient lifestyles and has directed attention to healthy living and activities and products that help to promote both mental and physical well-being.

China was the largest consumer foodservice market in Asia Pacific in the historic period with retail value sales of (US$599.1 billion) in 2020.

The Chinese consumer foodservice market is comprised of both independent and chained/franchised foodservice operators, with independent foodservice operators controlling the historic market share of retail value sales, and most recently yielding a 82.6% market share of US$494.9 billion in retail value sales in 2020.

Full-service restaurants were China's largest consumer foodservice category with retail value sales of US$423.6 billion in 2020 and a 70.7% market share, representing a declining Compound Annual Growth Rate (CAGR) of 1.1% from US$443.6 billion in 2016 (−21.2% from US$537.4 billion in 2019).

The presence of COVID-19 in 2020 had the most severe impact on self-service cafeterias in China's overall foodservice industry, given the prolonged lengths of lockdowns and direct person to person virus spread.

 

Consumer profile and trend

China is the largest populated country globally with 1.4 billion inhabitants in 2020, of which 51.3% of the population was male in comparison to 48.7% females. The median age of the population in 2020 was 39.2 years of age, an increase in percentage growth of 1.0% from 38.8 years of age in 2019, according to Euromonitor International from national statistics/UN, Economies and Consumers Annual Data.

China's economy slowed sharply in 2020 due to the impact of measures taken to control the COVID-19 pandemic, both domestically, and externally. Assuming the pandemic remains contained, and a vaccine is widely available by mid-2021, rates of growth in real GDP are expected to bounce back after 2020's difficult year, to record growth of 7.5% in 2021. Growth will gradually slip to around 4.5% per year in 2025-2027.Footnote 1

Overall, the Chinese economy has withstood the pandemic well compared to most other countries, however; consumer spending, retail sales and services sector activity are significantly below normal. The country remains vulnerable to further significant pandemic waves both domestically and globally, through the spillover effects of lower global trade.Footnote 2 Over the long term, the economy is expected to maintain its growth momentum bolstered by the 'dual circulation' economic strategy, placing a greater focus on innovation and domestic market development.

During 2020, the country's core inflation remained subdued, below the inflation target of 3.0%. Inflation from 2021 to 2024 is forecast to remain below the pre-crisis target, however; it could reach 2.5% over the medium term, in case of a faster-than-expected global economic recovery.Footnote 1

The rebalancing towards services and consumption will continue as the economy recovers from COVID-19. Mid-Lifers dominated among the highest-income earners with an annual gross income over USD250,000 and will remain predominant in the top-income band by 2040. Young adults and the middle youth are projected to be the highest income earners per capita, creating new opportunities for businesses. Further, the growing number of millennial consumers will soon dominate China's middle-class. Due to increasing education accessibility, young adults are better educated than their parents and have better job prospects. Moreover, China is home to many young entrepreneurs, who are benefiting from China's soaring stock markets and rapidly growing tech sector. As a result, tech-savvy young adults are emerging as an important driving force behind luxury spending, supported by the e-commerce boom.Footnote 3

According to government forecasts, the average annual income of the millennial group will increase from US$5,900 in 2014 to US$13,000 by 2024.

In 2020, social classes D and C (the lower-middle and middle classes) were prevalent in China, accounting for nearly half of the total population. Over the past few decades, rapid economic development has lifted hundreds of millions of Chinese out of poverty and created a burgeoning middle class. China's middle class is forecast to maintain the fastest growth rate of any cohort through to 2040, generating demand for a variety of discretionary goods and services. Despite a large and increasing middle class, China's income inequality is set to slightly increase and remain among the largest in the Asia Pacific region. Per capita disposable income growth in urban areas could rise faster than in rural areas over 2021-2040, indicating a growing urban-rural income gap. The majority of social class E, the lowest-income class, in China live in the countryside or suburban slums, with poor infrastructure, limited access to basic public services, and a lack of job opportunities.

The Chinese consumer market is forecast to remain the second largest globally by 2040.Footnote 3 Consumer spending, during and evolving from the pandemic, has caused the Chinese consumer to re-evaluate their needs and priorities, shifting from conspicuous consumption to more self-sufficient lifestyles and has directed attention to healthy living and activities and products that help to promote both mental and physical well-being. China remains however, a dominant market for high-value consumption, as the country has one of the world's largest high net worth and affluent populations.Footnote 3

Of note, whilst Chinese consumer sentiment also started to recover gradually in the second half of 2020, as employment stabilized, in 2021 it is estimated to remain below 2019 levels, as low- and middle-income households face pandemic-induced financial issues and uncertainty about the future.

The Asia Pacific consumer foodservice market

Prior to the emergence of the pandemic in 2020, the Asia Pacific consumer foodservice market experienced an increase in compound annual growth rate (CAGR) of 5.6% as retail value sales increased from US$1.1 trillion in 2016 to US$1.3 trillion in 2019. In 2020, the presence of COVID-19 caused the Asian Pacific consumer foodservice market to decline in CAGR by 21.9% to US$1.0 trillion.

China was the largest consumer foodservice market in Asia Pacific in the historic period with retail value sales of (US$599.1 billion) in 2020. Other top consumer foodservice Asia Pacific markets include Japan (US$158.2 billion), South Korea (US$71.5 billion) and India (US$32.1 billion) in 2020. Prior to the emergence of the pandemic in January 2020, China's foodservice market attained the second largest CAGR registering 6.8% (India attained the largest CAGR of 8.9%) from 2016 to 2019 (−18.5% from US$735.4 billion in 2019), and is forecast to grow moderately at 8.2% from 2021 to 2025. The foodservice market in Japan, in contrast, yielded the lowest CAGR of 0.1% from 2016 to 2019 and is forecast to maintain a relatively low growth rate of 3.3% from 2021 to 2025.

Retail value sales of top five Asia Pacific consumer foodservice markets, in US$ millions, historic and forecast, fixed 2020 exchange rate
Country 2016 2019 2020 CAGR* % 2016-2019 2021 2025 CAGR* % 2021-2025
Asia Pacific Total 1,093,424.8 1,287,374.2 1,005,142.9 5.6 1,194,548.7 1,639,184.8 8.2
China 603,303.0 735,387.8 599,132.4 6.8 714,308.2 979,410.1 8.2
Japan 206,250.7 206,714.0 158,206.0 0.1 183,947.4 209,755.1 3.3
South Korea 70,995.9 83,960.8 71,504.1 5.8 81,420.3 104,555.3 6.5
India 42,698.5 55,127.5 32,097.4 8.9 44,436.4 79,876.5 15.8
Indonesia 32,530.9 39,492.6 24,307.5 6.7 27,684.2 49,026.1 15.4

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

China's consumer foodservice market

Driven by rising disposable incomes and a stronger desire for time convenience, consumer foodservice maintained strong growth momentum over the past decade in China reaching US$599.1 billion in retail value sales in 2020. The growth momentum of the Chinese consumer foodservice market however, has been seriously disrupted by the unexpected outbreak of COVID-19, resulting in a large number of restaurants, of all sizes, closing temporarily,Footnote 4 resulting in the decline in CAGR of 0.2% from US$603.3 billion in 2016 (from US$735.4 billion in 2019).

The impact of COVID-19 and the resulting lockdowns, store closures and restricted public movement, led to a significant decline in China's economy in 2020, impacting the demand for and performance of, consumer foodservice greatly. Full-service restaurants, self-service cafeterias and cafés/bars were the most affected due to declining consumer traffic, strict social distancing policies, in addition to the anti-food waste campaign, 'Clean Plate', were some of the foodservice industries' barriers faced during their operations in 2020.Footnote 5

The Chinese consumer foodservice market is expected to increase in retail value sales, with continued growth into the forecasted period driven by the recovering macroeconomy and the digitalization shift,Footnote 5 expected to reach US$979.4 billion by 2025. It is anticipated however, that the growth will be gradual in the short term as consumers will be hesitant and require motivation to return to previous dining out habits.

The Chinese consumer foodservice market is comprised of both independent and chained/franchised foodservice operators, with independent foodservice operators controlling the historic market share of retail value sales, and most recently yielding a 82.6% market share of US$494.9 billion in retail value sales in 2020. Relatedly, independent foodservice operators will maintain a similar retail value sales market share of 82.9% of the US$811.5 billion forecast by 2025. Chained/franchised foodservice operators however, experienced the largest increase in CAGR of 7.4% historically (in part to their access to larger financial assistance and available supply chains) in comparison to independent foodservice operators, whom experienced a decline in CAGR of 1.5% during the same period.

Full-service restaurants were China's largest consumer foodservice category with retail value sales of US$423.6 billion in 2020 and a 70.7% market share, representing a declining CAGR of 1.1% from US$443.6 billion in 2016 (−21.2% from US$537.4 billion in 2019). China's full-service restaurants will continue to experience a moderate CAGR of 8.5% in the forecast period as retail value sales are expected to attain US$710.7 billion by 2025. Limited-service restaurants were China's second largest consumer category with retail value sales of US$128.2 billion, followed by street stalls/kiosks with retail value sales of US$31.1 billion in 2020. Subsequently, street stalls/kiosks had the largest CAGR of 9.6% generated between 2016 to 2020 (−8.2% from US$33.9 billion in 2019), while cafés/bars are expected to attain the largest CAGR of 14.1% in the forecast period. All foodservice categories experienced a decline in CAGR from 2019 to 2020 due to the restrictions imposed by COVID-19 in 2020 however, all foodservice categories in China are expected to experience continued and gradual growth in the forecast period, ranging from 6.4% to 14.1%.

Retail value sales of China's consumer foodservice by category, in US$ millions, historic and forecast, fixed 2020 exchange rate
Category 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Total Foodservice by type 603,303.0 599,132.4 −0.2 714,308.2 979,410.1 8.2
Independent Foodservice 525,038.6 494,857.6 −1.5 594,560.3 811,499.1 8.1
Chained Foodservice 78,264.4 104,274.7 7.4 119,747.9 167,911.0 8.8
Full-Service Restaurants 443,595.2 423,551.2 −1.1 512,752.2 710,679.6 8.5
Limited-Service Restaurants 123,793.0 128,241.2 0.9 146,528.0 188,116.3 6.4
Street Stalls/Kiosks 21,528.8 31,083.3 9.6 34,180.6 45,445.0 7.4
Cafés/Bars 13,789.7 15,693.4 3.3 20,188.2 34,223.4 14.1
Self-Service Cafeterias 596.4 563.3 −1.4 659.3 945.8 9.4

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Foodservice: chain franchises versus independent operators

Prior to the emergence of COVID-19, the Chinese consumer foodservice industry was already highly fragmented and competitive, with independent consumer foodservice representing a greater market share % in retail value sales in both periods (historic and forecast), the exception being self-service cafeterias where chained operators held a greater market share % in both periods . The onset of the pandemic however, created a much fiercer competitive environment causing chained and independent foodservice operators to fare differently in terms of overall consumer foodservice market. Chained foodservice brands, supported by large levels of capital and stable supply chains, were able to outperform independent operators and enabled some chained foodservice operators to continue their expansion plans and increase their outlet numbers during 2020. For instance, when many small independent restaurants ceased operations due to the imposed restrictions, many chained franchised used this opportunity to acquire these foodservice outlets through their bargaining powers, enabling them to expand their business territory. China's largest hotpot chained player, Hai Di Lao, for example, opened over 400 new restaurants in 2020.Footnote 6

Within China's consumer foodservice industry category, independent full-service restaurants accounted for a 93.7% market share of total full-service restaurant retail value sales in 2020, while chain full-service restaurant operators are expected to experience larger rates of growth (3.0%) in comparison to independent full-service restaurant operators (−0.2%%) in the historic period. Similarly, although not as significant of a percentage difference, within China's limited-service restaurant category, independent limited-service restaurant accounted for a slightly larger market share % (55.6) of restaurant value sales versus chained limited-service restaurants in 2020, despite the larger CAGR experienced by chained limited-service restaurants noted in both periods.

According to Euromonitor International, the outlook for the consumer foodservice industry may be bleak in 2020 but it provides an opportunity to reshuffle this industry. The consumer foodservice industry is likely to shift towards a more standardized and chain-orientated direction to better absorb unexpected risks in the future. Capital will favour brands with highly standardized operations and diversified restaurant portfolios, accelerating the trend.Footnote 4

Retail value sales of China's consumer foodservice: chain versus independent operators, market share %, historic and forecast
Category Chain vs Independent 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Total Cafés/Bars 100.0 100.0 0.0 100.0 100.0 0.0
Cafés/Bars Chained Foodservice 31.1 42.7 8.2 43.0 43.2 0.1
Independent Foodservice 68.9 57.3 −4.5 57.0 56.8 −0.1
Total Full-Service Restaurants 100.0 100.0 0.0 100.0 100.0 0.0
Full-Service Restaurants Chained Foodservice 5.6 6.3 3.0 6.2 6.8 2.3
Independent Foodservice 94.4 93.7 −0.2 93.8 93.2 −0.2
Total Limited-Service Restaurants 100.0 100.0 0.0 100.0 100.0 0.0
Limited-Service Restaurants Chained Foodservice 34.3 44.4 6.7 43.5 44.9 0.8
Independent Foodservice 65.7 55.6 −4.1 56.5 55.1 −0.6
Total Self-Service Cafeterias 100.0 100.0 0.0 100.0 100.0 0.0
Self-Service Cafeterias Chained Foodservice 83.5 85.0 0.4 85.0 84.9 0.0
Independent Foodservice 16.5 15.0 −2.4 15.0 15.1 0.2
Total Street Stalls/Kiosks 100.0 100.0 0.0 100.0 100.0 0.0
Street Stalls/Kiosks Chained Foodservice 29.2 42.8 10.0 43.2 43.8 0.3
Independent Foodservice 70.8 57.2 −5.2 56.8 56.2 −0.3

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Consumer foodservice by type

Full-service restaurants

Full service restaurants were the dominant foodservice category in China. The presence of COVID-19 in 2020 however, did impact the full-service restaurant environment due to strict social distancing requirements and prolonged lockdown periods, including the Spring Festival holiday, the traditional peak season for China's consumer foodservice industry.Footnote 6 In 2020, full-service restaurants contracted 7% in outlet numbers to 7.1 million outlets and declined 22.0% in transaction volume to 50.8 billion transactions respectively.

Further, following the reopening of the economy, full-service restaurants continued to struggle due to limited eat-in consumer traffic and lack of returned workers over a prolonged period of time.Footnote 6 Although many full-service restaurants actively embraced delivery, livestreaming and social media platforms to launch semi-finished dishes and pre-packaged foods via e-commerce platforms, the main losses caused by the pandemic remained difficult to overcome as dine-in traffic accounted for more than 80% of all demand during 2020.Footnote 6 The benefits of e-commerce retailing and catering as an efficient means to sustain growth and deliver ready-to-go and innovative products to the Chinese consumer is expected to continue. Further, the full-service restaurant category is expected to require more time to attain pre-pandemic values and transaction volumes especially as more consumers have shifted to cooking at home and many outlets have closed permanently as a consequence of rolling lockdowns.Footnote 6

Leading full-service restaurants have also developed various sub-brands to accommodate China's pre-pandemic reduced economic growth. In order to maintain sustainable growth momentum, full-service players were prompted to seek new growth opportunities and launch more affordable products aimed towards the middle-class and young consumers. For example, Xibei introduced its new fast food brand, Gongchangzhang in 2020

Asian full-service restaurants were the largest restaurant type within the full-service restaurant category in China attaining US$418.0 billion in retail value sales (98.7% market share) in 2020, representing a slight decline in CAGR of 1.2% from US$438.1 billion in 2016 (−21.2% from US$530.5 billion in 2019).

European full-service restaurants achieved the largest CAGR of 6.0% in the historic period as retail value sales increased from US$938.9 million in 2016 to US$1.2 billion in 2020 (−15.8% from US$1.4 billion in 2019), and are expected to maintain the largest growth rate of 17.9% as retail values sales are expected to increase to US$3.0 billion by 2025. Relatedly, North-American restaurants also attained moderate increases in CAGR's for retail value sales in both the historic and forecast periods (4.5% and 12.1% respectively).

Retail value sales of China's full-service restaurants by type, in US$ millions, historic and forecast, fixed 2020 exchange rate
Type 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Full-Service Restaurants 443,595.2 423,551.2 −1.1 512,752.2 710,679.6 8.5
Asian Full-Service Restaurants 438,090.5 418,037.7 −1.2 505,944.2 700,349.6 8.5
Pizza Full-Service Restaurants 2,962.6 2,802.9 −1.4 3,360.2 4,635.4 8.4
Other Full-Service Restaurants 1,460.9 1,357.7 −1.8 1,701.6 2,392.0 8.9
European Full-Service Restaurants 938.9 1,183.2 6.0 1,537.9 2,974.0 17.9
North American Full-Service Restaurants 142.2 169.7 4.5 208.3 328.6 12.1

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Sichuan HaiDiLao Catering Co Ltd was the largest company in retail value sales with their accompanying brand, Hai Di Lao Hot Pot, within the full-service restaurant category in China representing a 0.8% market share in 2020, increasingly significantly in CAGR of 41.4% from a 0.2% market share held in 2016. Of note, Beijing Xibei Catering Management Co Ltd company and their brand Xibei, also experienced an increase in CAGR of 18.9% from a 0.1% market share in 2016 to its most recent market share of 0.2% in 2020.

Retail value sales of China's top full-service restaurant companies and brands, market share %, historic
Brand Company 2016 2017 2018 2019 2020 CAGR* % 2016-2020
Full-service restaurant brand total Full-service restaurant company total 100.0 100.0 100.0 100.0 100.0 0.0
Others Others 98.9 98.8 98.6 98.4 98.4 −0.1
Hai Di Lao Hot Pot (Sichuan HaiDiLao Catering Co Ltd) Sichuan HaiDiLao Catering Co Ltd 0.2 0.3 0.5 0.7 0.8 41.4
Pizza Hut (Yum! Brands Inc) Yum! Brands Inc 0.4 0.4 0.4 0.4 0.4 0.0
Xibei (Beijing Xibei Catering Management Co Ltd) Beijing Xibei Catering Management Co Ltd 0.1 0.1 0.2 0.2 0.2 18.9

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Limited-service restaurants

Limited-service restaurants were the second largest foodservice category in China attaining U$128.2 billion in 2020 and is forecast to increase by 6.4% in CAGR to attain US$188.1 billion in retail values sales by 2025. According to Euromonitor International, limited-service restaurants, did fare better relative to other foodservice operations amidst COVID-19 due to their higher proportion of revenue generated from home-delivery, digital ordering and payment via apps or touchscreen in-store, however,Footnote 7 limited service restaurants also did report the decline in outlet numbers by 2.0% to 1.7 million, and a decline in transactions by 14.0% in 2020. Independent limited-service operators, in particular, with less financial support to implement safety and hygiene protocols standard within chained operations, were more susceptible to permanent outlet closures.Footnote 7

Limited-service restaurants also launched packaged foods/ready meals to compensate for the lack of foot traffic to their outlets. Chained operators Yum! Restaurants China, the operator of KFC and Pizza Hut, launched new business lines such as ready-to-eat packaged foods including rice noodles and fried chicken rice meals, to extend its catering service to suit more diversified scenarios as well as add new revenue stream. In the mid- to long-term, packaged meal kits with minimum cooking efforts and skills are expected to become increasingly popular.Footnote 7 Similarly to full-service restaurants, limited-service restaurants have also accelerated their digital transformation. According to Yum! Restaurants China, digital orders accounted for 84% of total company sales of KFC in 2020, compared to 63% in 2019.Footnote 7 The economic implications generated by COVID-19 however, will necessitate further digital capabilities and competencies to be incorporated by limited-service restaurant operators in their financial recovery.

Asian limited-service restaurants were also the largest restaurant type within the limited-service restaurant category in China attaining US$102.7 billion in retail value sales (80.1% market share) in 2020, representing a limited 0.0% decline in CAGR from US$102.8 billion in 2016 (−4.5% from US$115.7 billion in 2019).

Latin American limited-service restaurants experienced a significant increase in CAGR of 200.9% in the historic period as retail value sales increased from US$0.1 million in 2016 to US$8.2 million in 2020 (−3.3% from US$8.5 million in 2019). In contrast, ice cream limited-service restaurants experienced the largest decline in CAGR of 8.7% during the historic period and is expected to experience limited growth of 4.3% in the forecast period. Relatedly, all limited-service restaurants are expected to experience positive increases in CAGR varying from 4.3% to 32.4% in the forecast period.

Retail value sales of China's limited-service restaurants by type, in US$ millions, historic and forecast, fixed 2020 exchange rate
Type 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Limited-Service Restaurants by Type 123,793.0 128,241.2 0.9 146,528.0 188,116.3 6.4
Asian Limited-Service Restaurants 102,840.0 102,708.8 0.0 116,810.4 146,058.9 5.7
Chicken Limited-Service Restaurants 10,259.4 13,277.9 6.7 14,861.9 20,569.9 8.5
Burger Limited-Service Restaurants 3,900.2 4,805.9 5.4 5,578.5 7,508.7 7.7
Other Limited-Service Restaurants 2,246.8 2,921.2 6.8 3,587.2 5,234.4 9.9
Bakery Products Limited-Service Restaurants 2,530.5 2,435.0 −1.0 3,182.5 4,381.4 8.3
Pizza Limited-Service Restaurants 722.5 930.5 6.5 1,119.6 1,576.9 8.9
Ice Cream Limited-Service Restaurants 997.0 691.8 −8.7 777.1 920.9 4.3
Convenience Stores Limited-Service Restaurants 296.4 461.9 11.7 599.6 1,844.1 32.4
Latin American Limited-Service Restaurants 0.1 8.2 200.9 11.2 21.1 17.2

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Yum! Brands Inc was the largest company in retail value sales with their accompanying brand KFC, within the limited-service restaurant category in China representing a 5.7% market share in 2020, increasing in CAGR by 4.4% from a 4.8% market share held in 2016. Hua Lai Shi Catering Management & Service Co Ltd and their brand cnHLS, experienced the largest increase in CAGR of 21.8% from a 0.5% market share in 2016 to its most recent market share of 1.1% in 2020.

Retail value sales of China's top limited-service restaurant companies and brands, market share %, historic
Brand Company 2016 2017 2018 2019 2020 CAGR* % 2016-2020
Limited-service restaurant brand total Limited-service restaurant company total 100.0 100.0 100.0 100.0 100.0 0.0
Others Others 87.9 87.1 86.9 86.3 85.7 −0.6
KFC (Yum! Brands Inc) Yum! Brands Inc 4.8 5.1 5.1 5.3 5.7 4.4
McDonald's (McDonald's Corp) McDonald's Corp 2.3 2.4 2.4 2.5 2.8 5.0
Dicos (Ting Hsin International Group) Ting Hsin International Group 1.2 1.2 1.1 1.1 1.2 0.0
cnHLS (Hua Lai Shi Catering Management & Service Co Ltd) Hua Lai Shi Catering Management & Service Co Ltd 0.5 0.6 0.8 1.0 1.1 21.8
Burger King (Restaurant Brands International Inc) Restaurant Brands International Inc 0.4 0.5 0.6 0.6 0.6 10.7

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Street stalls / Kiosks

Street stalls/kiosk restaurants was the third largest foodservice category in China attaining US$31.1 billion in 2020 (−8.2% from US$33.9 billion in 2019), and are forecast to increase by 7.4% in CAGR to attain US$45.4 billion in retail values sales by 2025. According to Euromonitor International, despite experiencing a decline in retail value sales during 2020, street stalls/kiosks recovered faster than other channels in consumer foodservice, as their main operating models included take away and delivery, which met the demands of consumers during lockdown. There were however, differences in the performances of chained versus independent street stalls.

Chained street stalls/kiosks represented a lower market share of 42.8% and attained lower retail value sales of US$13.3 billion in 2020 (−2.3% from US$13.6 billion in 2019), however they experienced a substantial increase in CAGR of 20.6% from US$6.3 billion in retail values sales earned in 2016 in comparison to their independent counterparts. Supported by sufficient capital, optimised supply chains, various branding strategies and digital transformations assisted leading chained street stalls/kiosks to rebound rapidly after the economy reopened, continuing to increase their category shares. For example, Coco and Yiddtea launched their own WeChat mini programmes to provide direct online order and delivery services for consumers.Footnote 7 Of interest, while bubble tea predominated the street stalls/kiosks industry historically, fried chicken has become the latest trend as the total investment is much lower and the production line is relatively simple compared to other foodservice categories.Footnote 7

In contrast, independent street stalls/kiosks held a larger (57.2%) market share and retail value sales of US$17.8 billion in 2020 (−12.2% from US$20.3 billion in 2019) and a lower increase in CAGR of 3.9% historically, from US$15.2 billion in retail value sales in 2016. Despite their greater market share and retail value sales in relation to chained operators noted in 2020, some independent street stalls/kiosks, such as traditional mom-and-pop stores, permanently shut down due to a lack of cash flow and sharp decline in consumer traffic.Footnote 8

Retail value sales of China's street stalls/kiosk restaurants by type, in US$ millions, historic and forecast, fixed 2020 exchange rate
Type 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Street Stalls/Kiosks 21,528.8 31,083.3 9.6 34,180.6 45,445.0 7.4
Chained Street Stalls/Kiosks 6,282.2 13,288.1 20.6 14,766.0 19,904.9 7.8
Independent Street Stalls/Kiosks 15,246.6 17,795.2 3.9 19,414.6 25,540.1 7.1

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Shanghai Zhengxin Food Co Ltd was the largest company in retail value sales with their accompanying brand Zhengxin, within the street stalls/kiosks restaurant category in China representing a 6.5% market share in 2020, increasing in CAGR by 16.7% from a 3.5% market share held in 2016. Sichuan Shuyi Food & Beverage Co Ltd and their brand Shuyi, experienced the largest increase in CAGR of 73.2% from a 0.3% market share in 2016 to its most recent market share of 2.7% in 2020.

Retail value sales of China's top street stalls/kiosk restaurant companies and brands, market share %, historic
Brand Company 2016 2017 2018 2019 2020 CAGR* % 2016-2020
Street stalls/kiosks restaurant brand total Street stalls/kiosks restaurant company total 100.0 100.0 100.0 100.0 100.0 0.0
Others Others 90.0 88.2 85.6 82.3 79.2 −3.1
Zhengxin (Shanghai Zhengxin Food Co Ltd) Shanghai Zhengxin Food Co Ltd 3.5 4.8 5.6 6.2 6.5 16.7
MXBC (Zhengzhou Liang'an Enterprise Management Co Ltd) Zhengzhou Liang'an Enterprise Management Co Ltd 1.0 1.1 1.7 2.6 3.6 37.7
Yiddtea (Shenggen Enterprise Co Ltd) Shenggen Enterprise Co Ltd 1.8 2.0 2.1 2.3 2.9 12.7
Shuyi (Sichuan Shuyi Food & Beverage Co Ltd) Sichuan Shuyi Food & Beverage Co Ltd 0.3 0.5 1.1 2.0 2.7 73.2
Coco (CoCo International Co Ltd) CoCo International Co Ltd 1.5 1.4 1.8 1.9 2.2 10.0

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Cafés / Bars

The Cafes/Bars foodservice, and fourth largest category in China's foodservice market was affected by COVID-19 disproportionately, as chained operators performed better than their independent counterparts. Overall, bars/pubs and cafes' retail value sales contracted significantly in 2020 as bars/pubs declined in CAGR by 29.5% from US$8.7 billion in 2019 to US$6.2 billion in 2020 as they remained closed for longer lockdown periods, while cafés, who also declined significantly in CAGR by 32.9% from US$2.8 billion in 2019 to US$1.9 billion in 2020, continued their struggle to compete with specialist coffee and tea shops.Footnote 9

Specialist coffee and tea shops fared relatively well attaining US$US$7.7 billion in retail values sales in 2020 (−11.3% from US$8.7 billion in 2019), as they relied less on dine-in consumption, however this category was still effected by the pandemic due to reduced consumer traffic caused by working/study remotely. In addition, the wearing of masks in public spaces reduced consumers' desire to have drinks on the go, further negatively impacting the category's performance.Footnote 9 However, contactless operations such as pre-order and collect later, adopted by specialist coffee and tea shops prior to COVID-19, enabled them to remain in a better overall position in comparison to other café/bar categories.Footnote 9 Starbucks for example, has collaborated with China's Alibaba by extending is Starbucks Now feature to multiple platforms in the Alibaba ecosystem enabling consumers to enjoy the same benefits of the loyalty program across all channels. The digital transformation of Starbucks has proven successful despite a store closure of over 50% in February and a 46% decline in sales in the first quarter of 2020. Starbucks was able to recover quickly and only recorded a decrease in sales of less than 6% over the year.Footnote 9

In regards to China's specialist coffee shops, the low penetration of coffee drinking in China leaves plenty of room for growth for specialist coffee and tea shops. The support from capital investment is expected to help the expansion of the industry and educate the market.Footnote 10 Of note, Canadian coffee and doughnut chain Tim Hortons, first entered the Chinese specialist coffee and tea shops market in 2019 after receiving investment from one of China's internet giants Tencent Holdings Ltd. The investment will help Tim Hortons expand its presence in China (will open more than 1,500 outlets across China) and upgrade its digital infrastructure.Footnote 9 Further, it is noted that the target audience for coffee beverages has grown beyond younger consumers and white-collar workers, and some consumers in second-tier cities have even picked up the habit of drinking coffee. The expanded consumer base is now an attractive platform for brand owners, although "the journey of nurturing coffee drinking" is still an ongoing challenge.Footnote 10

Retail value sales of China's cafés/bars restaurants by type, in US$ millions, historic and forecast, fixed 2020 exchange rate
Category 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Cafés/Bars 13,789.7 15,693.4 3.3 20,188.2 34,223.4 14.1
Specialist Coffee and Tea Shops 4,116.7 7,667.7 16.8 10,183.8 18,392.8 15.9
Bars/Pubs 5,963.6 6,170.0 0.9 8,035.3 13,882.9 14.6
Cafés 3,709.4 1,855.7 −15.9 1,969.1 1,947.6 −0.3

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Starbucks Corp was the largest company in retail value sales with their accompanying brand Starbucks, within the cafés/bars restaurant category in China representing a 17.8% market share in 2020, increasingly in CAGR by 9.7% from a 12.3% market share held in 2016. Pin Dao Catering Service Co Ltd and their brand NAYUKI, experienced a significant increase in CAGR of 146.6% from a 0.2% market share in 2017 to its most recent market share of 3.0% in 2020.

Retail value sales of China's top cafés/bars restaurant companies and brands, market share %, historic
Brand Company 2016 2017 2018 2019 2020 *CAGR % 2016-2020
Cafés/Bars restaurant brand total Cafés/Bars restaurant company total 100.0 100.0 100.0 100.0 100.0 0.0
Others Others 78.9 78.8 77.3 74.2 67.1 −4.0
Starbucks (Starbucks Corp) Starbucks Corp 12.3 13.8 14.4 14.6 17.8 9.7
HEYTEA (Shenzhen Meixixi Food & Beverage Management Co Ltd) Shenzhen Meixixi Food & Beverage Management Co Ltd 0.7 1.0 1.3 2.8 4.3 57.4
Luckin Coffee (Luckin Coffee (Beijing) Co Ltd) Luckin Coffee (Beijing) Co Ltd 0.0 0.7 2.3 3.3 117.1 (2018-2020
NAYUKI (Pin Dao Catering Service Co Ltd) Pin Dao Catering Service Co Ltd 0.0 0.2 0.8 1.7 3.0 146.6 (2017-2020)
Costa Coffee (Coca-Cola Co, The) Coca-Cola Co, The 1.0 1.1 10.0 (2019-2020)

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Self-Service Cafeterias

Self-service cafeteria restaurants were the smallest foodservice category in China attaining US$563.3 million in 2020 (−20.3% from US$707.2 million in 2019), and are forecast to increase by an additional 9.4% in CAGR to attain US$945.8 million in retail values sales by 2025. Within the historic period, both chained and independent operators experienced declines in CAGR, 1.0% and 3.8% respectively, while in the forecasted period, both chained and independents are expected to achieve moderate growth, 9.4% and 9.6% each, by 2025.

The presence of COVID-19 in 2020 however, had the most severe impact on self-service cafeterias in China's overall foodservice industry, given the prolonged lengths of lockdowns and direct person to person virus spread. According to Euromonitor International, even though self-service cafeterias resumed as early as March, ongoing concerns over social distancing and the hands-on element of this channel, resulted in a dramatic drop in consumer traffic. Thus, this channel is facing a more severe and uncertain future in the aftermath of the pandemic.Footnote 11 As such, fewer options, good taste, freshness and health will become the mainstream for self-service cafeterias moving forward.Footnote 11

Retail value sales of China's self-service cafeteria restaurants by type, in US$ millions, historic and forecast, fixed 2020 exchange rate
Category 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Self-Service Cafeterias 596.4 563.3 −1.4 659.3 945.8 9.4
Chained Self-Service Cafeterias 497.7 478.9 −1.0 560.2 802.8 9.4
Independent Self-Service Cafeterias 98.6 84.4 −3.8 99.1 143.0 9.6

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Inter IKEA Systems BV was the largest company in retail value sales with their accompanying brand Ikea Restaurant, within the self-service cafeteria restaurant category in China representing a 34.4% market share in 2020, increasingly in CAGR by 4.0% from a 29.4% market share held in 2016. Country Style Cooking Restaurant Chain Co Ltd and their brand Mr Rice, experienced the largest increase in CAGR of 18.7% from a 5.9% market share in 2016 to its most recent market share of 11.7% in 2020.

Retail value sales of China's top self-service cafeteria restaurant companies and brands, market share %, historic
Brand Company 2016 2017 2018 2019 2020 CAGR* % 2016-2020
Self-service cafeteria restaurant brand total Self-service cafeteria restaurant company total 100.0 100.0 100.0 100.0 100.0 0.0
Others Others 32.9 33.8 38.6 27.1 29.5 −2.7
Ikea Restaurant (Inter IKEA Systems BV) Inter IKEA Systems BV 29.4 28.8 29.2 35.4 34.4 4.0
Shun Wang Ji (Ningbo Shun Wang Ji Catering Management Co Ltd) Ningbo Shun Wang Ji Catering Management Co Ltd 11.6 10.5 9.0 10.9 12.9 2.7
Mr Rice (Country Style Cooking Restaurant Chain Co Ltd) Country Style Cooking Restaurant Chain Co Ltd 5.9 10.0 11.3 12.2 11.7 18.7
Xin Si Fang Restaurant (Ningbo Xin Si Fang Restaurant Co Ltd) Ningbo Xin Si Fang Restaurant Co Ltd 8.1 5.9 4.4

4.0

3.8 −17.2
Lai Bi Bao (LB Peoples Restaurant Management Co Ltd) LB Peoples Restaurant Management Co Ltd 5.2 4.6 2.8 3.7 3.2 −11.4
Jin De Li Min Fast Food (Shandong Jin De Li Fast Food Chain Co Ltd) Shandong Jin De Li Fast Food Chain Co Ltd 4.8 4.9 3.3 4.6 3.2 −9.6
Hua Bi He (Ningbo Hua Bi He Catering Management Co Ltd) Ningbo Hua Bi He Catering Management Co Ltd 2.1 1.6 1.4 1.9 1.4 −9.6

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

China's consumer foodservice outlets and transactions

In the historic period, China's overall consumer foodservice outlets increased in CAGR of 1.7% from 9.5 million consumer foodservice outlets in 2016 to 10.1 million outlets in 2020 (−5.7% from 10.7 million outlets in 2019), and is expected to increase in CAGR by an additional 2.3% as total consumer foodservice outlets reach 12.0 million by 2025. The total number of transactions in all consumer foodservice categories declined slightly by 1.2% from 172.3 billion transactions in 2016 to 164.2 billion transactions in 2020 (−16.2% from 195.9 transactions in 2019).

Full-service restaurants had the largest amount of outlets (7.2 million), followed by limited-service restaurants (1.7 million) and street stalls/kiosks (1.2 million) in 2020, while limited-service restaurants had the largest amount of transactions (91.7 billion) in 2020, representing a decline in growth rate of 1.5% from 97.3 billion transactions in 2016 (−13.9% from 106.5 billion in 2019). Of note, street stalls/kiosks had the largest increase in CAGR (6.0%) in terms of amount of outlets in the historic period while cafés/bars is expected to attain the largest increase in CAGR (10.7%) in amount of outlets and attain 12.1% in CAGR as transactions increase from 2.4 billion in 2021 to 3.9 billion by 2025.

China's consumer foodservice outlets[1] and transactions[2] by category, historic and forecast
Category Outlets and transactions 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Total Consumer Foodservice by Type Outlets 9,468,693 10,130,464 1.7 10,922,512 11,964,577 2.3
000 transactions 172,330,884.7 164,174,021.6 −1.2 183,230,648.1 222,461,232.3 5.0
Cafés/Bars Outlets 36,622 45,996 5.9 52,983 79,511 10.7
000 transactions 1,367,514.0 1,877,613.0 8.2 2,437,030.3 3,853,075.7 12.1
Full-Service Restaurants Outlets 6,752,201 7,119,039 1.3 7,745,897 8,355,593 1.9
000 transactions 54,313,826.7 50,787,075.6 −1.7 60,163,368.2 74,068,461.4 5.3
Limited-Service Restaurants Outlets 1,699,832 1,727,189 0.4 1,825,728 2,130,283 3.9
000 transactions 97,288,328.5 91,650,172.7 −1.5 99,610,903.1 120,784,357.5 4.9
Self-Service Cafeterias Outlets 1,978 2,022 0.6 2,100 2,246 1.7
000 transactions 150,934.9 147,701.3 −0.5 168,351.8 213,574.6 6.1
Street Stalls/Kiosks Outlets 978,060 1,236,218 6.0 1,295,804 1,396,944 1.9
000 transactions 19,210,280.7 19,711,459.0 0.6 20,850,994.6 23,541,763.1 3.1

Source: Euromonitor International, 2021

1: Outlets - The number of eating establishments.

2: Transactions (definition according to Euromonitor International) - Transaction data corresponds to the number of meals/snacks purchased or number of receipts issued by the outlet.

*CAGR: Compound Annual Growth Rate

China's consumer foodservice sales per transactions and sales per outlet

In the historic period, China's overall consumer foodservice sales per transactions increased in CAGR by 0.7% from US$3.5 in 2016 to $US3.6 in 2020 (−5.3% from US$3.8 in 2019), and is expected to increase in CAGR by an additional 3.1% as consumer foodservice sales per transaction reach US$4.4 by 2025. The sales per outlet in all consumer foodservice categories declined slightly by 1.8% from US$63,715.6 in 2016 to US$59,141.7 in 2020 (−13.6% from US$68,452 in 2019).

Cafés/Bars had the largest sales per transactions (US$8.4), followed by full-service restaurants (US$8.3) and self-service cafeterias (US$3.8) in 2020, while cafés/bars had the largest sales per outlet (US$341,190.6) in 2020, representing a slight decline in growth rate of 2.4% from US$376,541.1 in 2016 (−10.6% from US$381,492 in 2019). Of interest, street stalls/kiosks had the largest increase in CAGR (9.8%) in sales per transactions in the historic period while self-service cafeterias are expected to attain the largest increase in CAGR (7.6%) in sales per outlet and attain 3.1% in CAGR as sales per transactions increase from US$3.9 in 2021 to US$4.4 by 2025.

China's consumer foodservice sales per transactions (US$) and sales per outlet (US$) by category, historic and forecast, fixed 2020 exchange rate
Category Sales per Transaction and Outlet 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Total Consumer Foodservice by Type Sales per transactions 3.5 3.6 0.7 3.9 4.4 3.1
Sales per outlet 63,715.6 59,141.7 −1.8 65,397.8 81,859.2 5.8
Cafés/Bars Sales per transactions 10.1 8.4 −4.5 8.4 9.0 1.7
Sales per outlet 376,541.1 341,190.6 −2.4 381,031.3 430,423.7 3.1
Full-Service Restaurants Sales per transactions 8.2 8.3 0.3 8.5 9.6 3.1
Sales per outlet 65,696.4 59,495.6 −2.4 66,196.6 85,054.4 6.5
Limited-Service Restaurants Sales per transactions 1.3 1.4 1.9 1.5 1.6 1.6
Sales per outlet 72,826.6 74,248.5 0.5 80,257.3 88,305.8 2.4
Self-Service Cafeterias Sales per transactions 4.0 3.8 −1.3 3.9 4.4 3.1
Sales per outlet 301,510.0 278,563.4 −2.0 313,934.9 421,103.8 7.6
Street Stalls/Kiosks Sales per transactions 1.1 1.6 9.8 1.6 1.9 4.4
Sales per outlet 22,011.7 25,143.9 3.4 26,377.9 32,531.7 5.4

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Eat-in, home delivery versus takeaway foodservice channels

China's consumer foodservice channels retail value sales (eat-in, home delivery and takeaway) attained US$599.1 billion (y-o-y exchange rates) in 2020, declining in a CAGR of 1.2% from US$629.5 billion (year-over-year exchange rates) in 2016 (− 18.8% from US$738.0 billion in 2019). The eat-in, home delivery and takeaway channels are expected to recover in CAGR by 5.6% as retail value sales increase to US$874.6 billion by 2025.

Prior to COVID-19's occurrence in 2020, the 'eat-in' option was the predominant channel for the Chinese consumer foodservice by type, as retail value sales increased in CAGR of 5.4% from US$535.9 billion in 2016 to US$595.4 billion in 2019. The presence of COVID-19 and its accompanying government imposed retail and foodservice restrictions throughout 2020, contributed to the decline of the eat-in channel option by a CAGR of 23.7% as retail values sales decreased to US$454.5 billion in 2020. Further, during the historic period and COVID-19, the 'home delivery' option was the second largest consumer foodservice by type category experiencing an increase in CAGR of 21.8% from US$34.1 billion in 2016 to US$75.1 billion in 2020, especially for both the full and limited-service restaurants who experienced increases in CAGR's of 8.5% and 14.7% from 2019 to 2020, while the takeaway option remained popular for street stalls/kiosks during the same period. All consumer foodservice channels are expected to experience positive growth in the forecast period, with the home delivery option provided by cafés/bars forecast to increase by 13.1% by 2025.

Retail value sales of China's consumer foodservice by channel: eat-in, home delivery vs takeaway, in US$ millions, historic and forecast, year-over-year exchange rates
Category Channel 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Total Consumer Foodservice by Type 629,499.0 599,132.4 −1.2 702,457.5 874,605.8 5.6
Consumer Foodservice by Type Eat-in 535,873.9 454,472.4 −4.0 545,413.4 674,589.5 5.5
Home Delivery 34,101.8 75,103.7 21.8 82,133.5 113,089.7 8.3
Takeaway 59,523.3 69,556.3 4.0 74,910.7 86,926.6 3.8
Full-Service Restaurants Total 462,856.4 423,551.1 −2.2 504,245.4 634,631.5 5.9
Full-Service Restaurants Eat-in 430,919.3 370,268.4 −3.7 445,702.5 559,173.8 5.8
Home Delivery 12,034.3 27,573.2 23.0 31,364.1 47,343.5 10.8
Takeaway 19,902.8 25,709.6 6.6 27,178.8 28,114.2 0.8
Limited-Service Restaurants Total 129,168.2 128,241.2 −0.2 144,097.0 167,986.4 3.9
Limited-Service Restaurants Eat-in 93,896.2 74,801.1 −5.5 88,221.9 98,440.0 2.8
Home Delivery 17,579.8 33,086.2 17.1 36,398.5 46,196.3 6.1
Takeaway 17,692.2 20,353.9 3.6 19,476.6 23,350.1 4.6
Street Stalls/Kiosks Total 22,463.6 31,083.3 8.5 33,613.5 40,582.1 4.8
Street Stalls/Kiosks Takeaway 18,195.5 18,516.3 0.4 21,243.7 24,280.2 3.4
Home Delivery 4,268.1 12,567.0 31.0 12,369.8 16,301.8 7.1
Cafés/Bars Total 14,388.4 15,693.4 2.2 19,853.2 30,561.3 11.4
Cafés/Bars Eat-in 10,594.1 9,033.9 −3.9 11,057.3 16,398.4 10.4
Takeaway 3,614.5 4,845.3 7.6 6,864.2 10,999.7 12.5
Home Delivery 179.9 1,814.2 78.2 1,931.7 3,163.1 13.1
Self-Service Cafeterias Total 622.3 563.3 −2.5 648.3 844.6 6.8
Self-Service Cafeterias Eat-in 464.2 368.9 −5.6 431.6 577.2 7.5
Takeaway 118.2 131.2 2.6 147.3 182.3 5.5
Home Delivery 39.8 63.1 12.2 69.4 85.1 5.2

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Offline versus online ordering of consumer foodservice in China

China's consumer foodservice was predominantly ordered offline (79.5% market share) in 2020, representing a decline in CAGR of 4.2% from a 94.3% market share held in 2016. The advantages and benefits of online food delivery and e-commerce platforms however, have prompted many full-service restaurants to incorporate and expand their digital channels and optimize their delivery by cooperating with third-party platforms. For instance, Xibei, an established Asian full-service restaurant provider, sold semi-finished dishes, offered discounted eat-in coupons and invited chefs to teach audiences to cook improving consumer engagement and sales.Footnote 6 As such, China's overall online ordering of consumer foodservice increased at a CAGR of 37.7% from a 5.7% market share in 2016 to a 20.5% market share in 2020 (+50.7% in CAGR from a 13.6% market share held in 2019 due to the prevalence of COVID-19 and accompanying restrictions).

Of interest, China's cafés/bars online ordering experienced the largest increase in CAGR of 50.7% as market share in 2016 increased from 5.7% to 29.4% in 2020 (+56.4% in CAGR from a 18.8% market share in 2019), followed by full-service restaurants online ordering increasing in a CAGR of 43.4% (+74.0% in CAGR from a 7.3% market share in 2019) and limited-service restaurant online ordering increasing by a CAGR of 32.9% also from 2016 to 2020 (+27.5% in CAGR from a 31.6% market share in 2019).

China's consumer foodservice: offline versus online ordering, market share %, historic and forecast
Category Offline vs Online 2016 2020 CAGR* % 2016-2020 2021 2025 CAGR* % 2021-2025
Consumer Foodservice by Type Total 100.0 100.0 0.0 100.0 100.0 0.0
Consumer Foodservice by Type Offline 94.3 79.5 −4.2 79.4 75.5 −1.3
Online 5.7 20.5 37.7 20.6 24.5 4.4
Cafés/Bars Total 100.0 100.0 0.0 100.0 100.0 0.0
Cafés/Bars Offline 94.3 70.6 −7.0 65.8 54.1 −4.8
Online 5.7 29.4 50.7 34.2 45.9 7.6
Full-Service Restaurants Total 100.0 100.0 0.0 100.0 100.0 0.0
Full-Service Restaurants Offline 97.0 87.3 −2.6 86.0 82.8 −0.9
Online 3.0 12.7 43.4 14.0 17.2 5.3
Limited-Service Restaurants Total 100.0 100.0 0.0 100.0 100.0 0.0
Limited-Service Restaurants Offline 87.1 59.7 −9.0 62.2 53.8 −3.6
Online 12.9 40.3 32.9 37.8 46.2 5.1
Self-Service Cafeterias Total 100.0 100.0 0.0 100.0 100.0 0.0
Self-Service Cafeterias Offline 93.7 88.0 −1.6 88.9 89.9 0.3
Online 6.3 12.0 17.5 11.1 10.1 −2.3
Street Stalls/Kiosks Total 100.0 100.0 0.0 100.0 100.0 0.0
Street Stalls/Kiosks Offline 80.8 59.3 −7.4 62.7 66.2 1.4
Online 19.2 40.8 20.7 37.3 33.8 −2.4

Source: Euromonitor International, 2021

*CAGR: Compound Annual Growth Rate

Conclusion

Driven by rising disposable incomes and a stronger desire for time convenience, China's consumer foodservice maintained strong growth momentum over the past decade reaching US$599.1 billion in retail value sales in 2020.

The impact of COVID-19 and the resulting lockdowns, store closures and restricted public movement, led to a significant decline in China's economy in 2020, impacting the demand for and performance of, consumer foodservice greatly. Full-service restaurants, self-service cafeterias and cafés/bars were the most affected due to declining consumer traffic, strict social distancing policies, in addition to the anti-food waste campaign, 'Clean Plate', were some of the foodservice industries' barriers faced during their operations in 2020.

The Chinese consumer foodservice market is expected to increase in retail value sales, with continued growth into the forecasted period driven by the recovering macro-economy and the digitalization shift, and is expected to reach US$979.4 billion by 2025.

As noted by Euromonitor International, the outlook for the Chinese consumer foodservice industry may be bleak in 2020 but it provides an opportunity to reshuffle the industry. The consumer foodservice industry is likely to shift towards a more standardized and chain-orientated direction to better absorb unexpected risks in the future. Capital will favour brands with highly standardized operations and diversified restaurant portfolios. As such, there remains substantial opportunity for Canada to increase its presence in the Chinese consumer foodservice industry as reliable suppliers of high-quality ingredients and value-added products.

Canadian exporters are encouraged to work diligently with their importing partners to ensure that China's import requirements are met and that the necessary documentation is provided; and recognize that significant commitment and market development efforts are required to both preserve and grow Canadian and Chinese trade relations. The prospect remains for Canada to increase its presence and positive brand image within the Chinese consumer foodservice market and encourage trade growth based upon strong and established trade relations.

For more information

The Canadian Trade Commissioner Service:

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

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For additional information on Food & Hotel (FHC) China 2021, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and agri-food Canada
ben.berry@agr.gc.ca

Resources

  • Euromonitor International –
    • China: Country Profile, Country Report, November 16, 2020
    • Consumer Foodservice in China. Country Report, February 2021
    • Economies and Consumers Annual Data
    • Full-service restaurants in China. Country Report, February 2021
    • Income and Expenditure: China. Country Report, September 27, 2021
    • PEST Analysis: China, Country Report / April 22, 2021
    • The Impact of Coronavirus on FMCG and Service Sectors in China. page 23, March 2020
    • What's new in China's Coffee Beverages Market?, Opinion, April 1, 2016
    • Street Stalls/Kiosks in China. Country Report, February 2021
    • Self-service Cafeterias in China. Country Report, February 2021

Foodservice profile – China
Global Analysis Report

Prepared by: Laurie Bernardi, International Market Research Analyst

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