China ripe for fast food chains

China’s fast food industry is set for massive growth with new research from Mintel revealing 44 per cent of Chinese consumers plan to spend more on fast food in the coming year.

The study also concluded that breakfast is still the least serviced menu offer for foreign fast food outlets, with just 21 per cent of urban Chinese consumers eating at fast food restaurants in the morning as opposed to 75 per cent during lunchtime.

“To increase consumption of foreign fast food, more has to be done to unlock opportunities in the breakfast market where usage is the lowest,” said Tan Heng Hong, senior research analyst at Mintel.

Chinese food holds the largest share of the fast food market. In the past year, 86 per cent of respondents had eaten at Chinese fast food restaurants, 68 per cent at foreign ones.

However, this gap could be bridged by including local menu items. Nearly three quarters (76 per cent) of consumers expressed an interest to see more foreign fast food options with local flavours on the menu.

“The challenge for foreign fast food chains is to come up with new innovative products that can meet the demand for a more localised taste,” added Heng Hong.

When it comes to attitudes, foreign fast food chains have edged out local fast food chains. Foreign fast food outlets win out on speed of service with 19 per cent of Chinese consumers saying that they perform a lot better. Just one per cent rated Chinese outlets better on speed.

Foreign outlets also have the advantage in terms of hygiene perception with 18 per cent of Chinese consumers saying foreign fast food outlets perform a lot better in this area compared to just one per cent nominating Chinese outlets.

Mintel’s research shows 71 per cent of women claim to eat at foreign fast food restaurants and 66 per cent of men. This is due to women’s dining out occasions being social, with children and friends, colleagues and other family members present.

In addition, slightly more women (25 per cent) than men (19 per cent) eat at fast food restaurants when there is a promotion such as meal vouchers or coupons.

“To increase traffic among women, promotions such as vouchers and coupons can be a useful marketing tool. Women are interested in deals because they enjoy the thrill of not paying full price for an item,” said Heng Hong.

Mintel forecasts the foreign fast food sector in China will increase to RMB171 billion (US$26.88 billion) by 2017, growing by about 95 per cent on the expected value for 2012 or a compound annual growth rate of 14.3 per cent.


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