Chinese Food and Beverage Industry


Chinese Food and Beverage Industry Introduction

Most of China’s Food and Beverage (F&B) revenue is generated by non franchised establishments. Quick Serve Restaurants (QSR) of the U.S. has secured a strong foothold within China. Although, indigenous brands in China have been providing stiff competition against the U.S-based QSR. The franchisors have observed that the Chinese F&B market could expand in Tier 3 and Tier 4 cities (not-so-developed cities) since the competition is low.

According to the market database, an annual increase in new franchised stores in China will cause the formal dining segment to have the highest growth dynamics within Tier 1 and Tier 2 cities. The leisure drinks (82%) and local flavor snacks (67%) have showcased marginal growth within the Tier 3 and Tier 4 cities.

One of the key challenges experienced by this market is the ongoing pandemic. The first quarter of 2020 experienced a sharp decline in revenue for the F&B industry. The bakeries & desserts market is one of the key industrial growth prospects within China.

Popular food rating applications within China

Dianping, Koubei, and Meituan are some of the popular food review applications present in China. According to the market database in 2018, Chinese food delivery service Meituan-Dianping reported an online transaction volume of over USD 41 billion. These applications have been providing a concise review of the F&B outlets present within the sector. The number of food outlets within this country has increased due to the rising disposable income within China. The number of working-class people within this country has increased due to the rise in employment opportunities.

The F&B industry also favors the economy through both direct as well as indirect means. China instated as the second-largest F&B economy on a global scale. This is primarily due to the rising demand which is directly proportional to the increasing population within this country. The growth dynamics associated with the F&B market have been studied through Global Market Database.

According to the market database, this industry is one of the leading market segments in the Chinese economy. The organic foods sector is one of the budding segments within this industry. The rising trade associated with the export of naturally produced crops is another factor that supports expanding the market size. The rising number of startups and food-based establishments within this market is one of the key factors that propel its growth segment.

Market contribution to retail sales

The F&B industry accounted for 11% of the retail sales. Moreover, the industry also contributed to 11% of the consumer products sector. The snacks and fast food segments accounted for the largest market share within the industry. The growing consumption of packaged products is one of the factors that propel market growth. The change in consumer behavior and their eating habits are added factor that accelerates growth. Hot pot meals are the most popular sales item within this market.

According to the market database, packaged consumer products are majorly purchased by the population under 40 years. Concerning gender, it is seen that the number of female consumers for the packaged foods sector is greater than the male population.

Between 2011 to 2017, the F&B market expanded by a value of roughly USD 44 Billion. The end-user penetration within this market is recorded to be 21.4% for this industry. The number of users for this market is expected to attain a value of 309.2 Million in the year 2020. Moreover, the average revenue generated per user is accounted to be USD 493.03 for the Chinese F&B market.

It is assumed that the Chinese Food and Beverage Industry will reach a value of USD 152,445 Million by the year 2020. It is likely to further expand in terms of trade and global standing. China is poised to become the largest food and beverage-based economy by the year 2024.