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Fast Food - China - November 2015

Fast Food - China - November 2015

“Online food ordering and delivery service represents an opportunity for fast food restaurants to drive revenue. By offering customised dishes, using healthier and more premium ingredients and extending the brands, the leading fast food chains will revive from the temporary downturn.”

– Terra Xu, Senior Research Analyst

This report looks at the following areas:

Revival of international brands against competition
Growing fast food business via food for delivery – targeting breakfast and snacking occasions
Recovering from the impact of food safety issues


OVERVIEW
What you need to know
Definition
Market segmentation
Demographic classification
EXECUTIVE SUMMARY
The Market
Figure 1: Total China fast food and takeaway market, by value sales, 2010-20
Figure 2: Total China fast food and takeaway market, by market volume, 2010-20
Key Players
Figure 3: Leading chains in the Chinese fast food and takeaway market, by market volume (outlets), 2013-14
The Consumer
Figure 4: Habits of ordering food for delivery, August 2015
Figure 5: Penetration of eating fast food in different occasions, August 2015
Figure 6: Fast food brand penetration, August 2015
Figure 7: Fast food brand image perception, correlation analysis, August 2015
Figure 8: Important factors leading to higher visit frequency to food restaurants, August 2015
What we think
ISSUES & INSIGHTS
Revival of international brands against competition
Growing fast food business via food for delivery – targeting breakfast and snacking occasions
Recovering from the impact of food safety issues
THE MARKET
What you need to know
China’s fast food market is expected to see gradual recovery
Consumers’ increasing income and willingness to pay for service, the development of the online ordering
platform and mobile payment are driving growth
Food safety issues and the rise of casual dining restaurants are potential barriers
Individual fast food brands see faster growth than chained brands
Market size and forecast
Figure 9: China fast food and takeaway market, value sales and volume, 2010-20
Figure 10: Total China fast food and takeaway market, by value sales, 2010-20
Figure 11: Total China fast food and takeaway market, by market volume (number of outlets), 2010-20
Market factors
Market drivers
Market challenges
Market segmentation
Chains generate larger proportion of market value with fewer outlets
Figure 12: China fast food and takeaway market, by market segments, 2010-15
Individual fast food brands see faster growth than chained brands
Figure 13: Independent fast food and takeaway market, by value sales, 2010-20
Figure 14: Chained fast food and takeaway market, by value sales, 2010-20
KEY PLAYERS
What you need to know
Fragmented fast food market with close competition between international and domestic brands
Fast growing domestic chains penetrating into lower tier cities
Leading chains making efforts to develop franchise outlets
Key players embracing the mobile internet and online food ordering and delivery platforms
Innovation highlights
Market share
Fragmented fast food market
Close competition between international and domestic players
Figure 15: Leading chains in the Chinese fast food and takeaway market, by market volume (number of outlets), 2013-14
Competitive strategies
Winning the lower tier cities
Developing the franchise outlets
Embracing the mobile internet
Strengthening food delivery services
Who’s innovating?
McDonald’s launches “Create Your Taste” program
Figure 16: Customised burgers in the McDonald’s “Create Your Taste” program
Figure 17: Ordering machine for the McDonald’s “Create Your Taste” program
Fun Box allows order and pick-up service at vending machines
Dadong opens Dadong Duck outlets offering roast duck burgers
KFC and McDonald’s foraying into the fashion world
Burger King gives away Peace Day Burgers
THE CONSUMER
What you need to know
Eat-in is as popular as take-out for fast food restaurants
Ordering for food for delivery has become a habit for consumers
When ordering food for delivery, consumers prefer using online food delivery platforms and ordering from
chained restaurants
Lunch and breakfast see growth potential, while dinner may face a challenge
Casual dining and snacking are emerging occasions to drive growth
Western-style fast food brands are more popular, while non-western style brands appeal to consumers aged 25
or above
McDonald’s and KFS share similar brand image, Subway is considered innovative and trendy; Zhen Kungfu and
Yoshinoya are perceived as safer
Clean environment is key to attract repeat visits
Dining habits
Eating out and ordering food for delivery are both common ways of dining
Figure 18: Dining Habits, August 2015
Eat-in is as popular as take-out for fast food restaurants
Figure 19: Dining Habits when eating out, August 2015
Mobile apps are the most commonly used way of ordering food for delivery
Figure 20: Ways to order food for delivery, August 2015
Food for delivery
Ordering food for delivery becomes habit for consumers with busy lifestyles
Figure 21: Habits of ordering food for delivery, August 2015
Consumers prefer to order from online food delivery platforms
Figure 22: Mostly used ways of ordering food for delivery, August 2015
Chained restaurants are preferred when consumers order food for delivery
Figure 23: Preferred restaurants when ordering food for delivery, August 2015
Target consumers for food delivery service from fast food chains
Figure 24: Attitude and habit of ordering food for delivery (% agreeing with the statements), August 2015
Trend in eating fast food
Lunch is the most popular fast food occasion, and still growing
Consumers are lowering fast food visiting frequency for dinner purpose
Breakfast shows growth potential for fast food consumption
Figure 25: Penetration and trends of eating fast food in breakfast, lunch and dinner, August 2015
Casual and snack occasions are opportunities for fast food
Figure 26: Penetration and trends of eating fast food on casual and snacking occasions, August 2015
Figure 27: Percentage of consumers who have eaten fast food more often for casual dining and snacking, by demographics,
August 2015
Fast food brand penetration
KFC and McDonald’s remain the most popular brands
Figure 28: Fast food brand penetration, August 2015
Non-western style brands appeal to consumers aged 25 or above
Figure 29: Fast food brand penetration, by age, August 2015
User profile of leading fast food brands
KFC, McDonald’s
Dicos
Burger King
Hua Lai Shi
Subway
Yonghe
Zhen Kungfu
Daniang Dumpling
Jill Wonton
Malan Ramen
Yoshinoya
Fast food brand image
KFC and McDonald’s perceived brand image is similar
Subway may attract affluent consumers with a ‘healthy’ proposition
Emphasising food safety and variety may drive growth for Zhen Kungfu and Yoshinoya
Figure 30: Fast food brand image perception, correlation analysis, August 2015
Important factors in attracting repeat visits
Clean environment is the most important factor
Taking advantage of technology to serve food faster
Figure 31: Important factors leading to higher visit frequency at fast food restaurants, August 2015
Location is more important to young consumers
Figure 32: Important factors leading to higher visit frequency at fast food restaurants, by age, August 2015
Home delivery services can attract high earners
Figure 33: Important factors leading to higher visit frequency to fast food restaurants, by income, August 2015
Households with kids look for large menus
Figure 34: Important factors leading to higher visit frequency to fast food restaurants, by household composition, August 2015
Meet the Mintropolitans
Mintropolitans are more used to ordering food for delivery
Figure 35: Dining Habits, by consumer classification, August 2015
Figure 36: Ways of ordering food for delivery, by consumer classification, August 2015
Mintropolitans are more likely to have fast food for casual and snacking occasions
Figure 37: Penetration of eating fast food in different occasions, by consumer classification, August 2015
Mintropolitans show preference towards non-western style brands
Figure 38: Fast food brand penetration, by consumer classification, August 2015
Subway, Yoshinoya and Burger King attract more Mintropolitans
Figure 39: Comparison of fast food brand penetration, by consumer classification, August 2015
Mintropolitans pay more attention to the variety of dishes, organic ingredients and whether there are delivery
services or not
Figure 40: Important factors leading to higher visit frequency to food restaurants, by consumer classification, August 2015
APPENDIX
Market size and forecast
Figure 41: Total China fast food and takeaway market, by value sales, 2010-20
Figure 42: Total China fast food and takeaway market, by market volume, 2010-20
Market segmentation
Figure 43: China fast food and takeaway market value, by market segments, 2010-20
Figure 44: China fast food and takeaway market volume, by market segments, 2010-20
Methodology and abbreviations
Methodology
Mintropolitans
Figure 45: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
Abbreviations
Figure 46: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
RESEARCH METHODOLOGY
China Research Methodology
Confidence levels
Sample sizes by city
Sampling methodology and sampling structure
Our research partner - QQsurvey
QQ’s sampling and Quality control
Further Analysis
Appendix

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