During the China Catering Industry Summit 2018, in Beijing, a report, entitled ‘China’s Catering Industry Development Report 2018’, was released by the China Cuisine Association (CCA). Data from this report shows that the catering industry in China accounted for 10.8 percent of total retail sales in terms of consumer goods in 2017 and was responsible for 11.3 percent of the consumer market’s growth.
For this reason, China has become the world’s second largest catering market after recording revenue figures of 3.96 trillion RMB (the US $616 billion) in 2017. Second, only to the US, the Chinese market is nearly 700 times the size of 40 years ago when China adopted its ‘reform and opening-up policy’.
The online force
With the development of online-to-offline commerce (or O2O), a business strategy that encourages potential online customers to make purchases in physical stores, ‘online meal ordering’ has become the third option for consumers after cooking at home and dining out.
As a result, revenue in the online takeaway market exceeded 300 billion RMB (around the US $47 billion) in 2017, that is 13.6 times higher than the 20.37 billion RMB (around the US $3 billion) recorded in 2011.
Chinese food and condiments as the columns
CCA(China Cuisine Association) President Jiang Junxian noted that the growth of China’s catering industry has been maintained within a reasonable range, predicting revenue of over 5 trillion RMB in 2020.
According to the report, the dining environment was selected by 19.2% of the consumers as the most important factor that influenced their choices of restaurants. A total of 17.8% of them considered taste as the most important. Chinese cuisines took 57% of the catering market, possessing a dominant position. In addition to the dominant Chinese cuisines, condiments were another major contributor to catering industry growth in 2017, accounting for 16% of the sector. The proportion was even 18% in major cities
A sweet moment for soy sauce
The global soy sauces market is expected to post a CAGR of close to 7% during the period 2019-2023, according to the latest market research report by Technavio.
A key factor driving the growth of the market is growing focus on expanding production capabilities. Manufacturers are finding tremendous growth opportunities in all global markets, owing to the rising consumer preference for soy sauce products. The increase in the production capacity ensures that manufacturers are well-positioned to cater to the customers’ growing demands across the markets. For instance, JONJEE HI-TECH INDUSTRIAL & COMMERCIAL HOLDING, a leading condiment company in China, is expanding its soy sauce production facility in Yangxi, China. The new expansion adds 200,000 tons of soy sauce production to the plant, and by 2020 it is expected to reach full production capacity.
The contribute of dining-out
With the growing demand for business entertaining, many people are going to restaurants, pubs, tea houses and other eateries for everyday meals and gatherings with friends. This has urged development of catering services. As the spending power of households of middle-income and above increases, the frequency of eating out also rises
So as Chinese consumers dine out more, Soy sauce’s profits have been growing. For example, the firm Haitian has registered net income growth of more than 20 percent for seven straight quarters and the figure is expected to grow 25 percent this year and 26 percent in 2019. The soy sauce maker’s heady growth isn’t without risks. In its interim report, Haitian noted that its business would suffer if the prices of soybeans and sugar, the main raw materials in the condiment’s production, increase. Higher tariffs levied by China on U.S. soybeans amid escalating trade tensions may boost domestic soy prices
Private label brands are emerging
The emergence of private label brands is one of the positive trends that can influence the growth of the global soy sauces market during the forecast period. The private label products are priced lesser than mainstream brands and this makes private label products a popular option among consumers who are budget conscious. The market share of private label players is increasing in all the segments of packaged foods.
How to stand out from the crowd?
Whether we are talking about catering or food products like condiments, doing business in China is always an opportunity. The competition is strong so it is necessary to have a good marketing plan. One of the best strategies is to choose social media as a channel to market your product and your service.
Promotion through social media: Weibo
Weibo is the main Chinese “one-to-many” microblog platform: it is the most used social network for celebrities, companies, and organizations wishing to establish direct communication with final consumers.
Chinese users love to look for information on Weibo, they use it as a real search engine and then follow the innovations that are launched from this platform.
Weibo is often compared to Twitter but is actually different and much richer: with 140 characters in Chinese, you can write more than the Western languages. The features are also different, for example, you can create polls and share multiple photos, videos and files at the same time. Weibo also gives the opportunity to launch ADV campaigns and promote themselves in the post or in dedicated sectoral forums
To effectively promote your brand on Weibo it is necessary to:
- Open an official account to get the “v” of “verified”, which is essential to create trust in users.
- Publishing new content and frequent updates: like Twitter, news circulates very quickly and it’s important to keep up.
- Manage the community and interact with users and with Key Opinion Leaders.
- Do cross-marketing with other platforms such as website and WeChat
Promotion through social media: WeChat
WeChat is one of the most widely used platforms: it is a messaging app that is used exclusively by mobile and that contains within it Social Network, Customer Care, Newsletter, E-commerce with an integrated payment system and highly profiled analytics. In China, where it was born, i
t has become a real work tool, with 1 billion users and more than 13 million business accounts.
WeChat offers companies the ability to create corporate mini-sites and offer various services. Thanks to official accounts, companies and brands have the opportunity to interact with their followers by providing them with a “one-on-one” service by sending direct messages, news, and promotions.
As for Weibo, even on WeChat, it is important for companies to activate a verified account: only in this way can you make a big deal in an environment that unfortunately still today presents numerous “fake accounts”.
One of the main functions of this platform, for which it has played a revolutionary role in China, is that it can create and scan QR codes. they are the highest expression of O2O marketing (online-to-offline). So, to promote yourself to the best, you can also add a QR code on the labels, if you offer a product, which allows Chinese consumers to be redirected to WeChat where they can find all the information on what they intend to buy.
In addition, the “Wechat Wallet” feature allows consumers to purchase products online by paying directly through the App. It is already possible to integrate e-commerce services both within WeChat and connected to external platforms.
GMA: F&B Digital Marketing Agency
Gentlemen Marketing Agency is a digital marketing agency based in Shanghai. We help you to develop the best marketing solution for your business. If you need more information about how to do business in China, please visit our website.