Everything's bigger in ... China?
China's restaurant industry is one of the nation's main economic growth drivers, according to a report released by Meituan-Dianping, a foodservice-focused e-commerce platform. The industry expanded 11.3 percent last year to reach 3.5 trillion yuan (more than $514.6 billion USD), a news release said. That's up from 2.3 trillion yuan or more than $338.2 billion just four years earlier.
The report is based on the company's data from 260 million active users across the sprawling nation. To put that number in perspective, remember that the entire current U.S. population is just over 320 million people at the moment.
The industry's growth is actually significantly higher than the entire nation of China's, which is currently at 6.7 percent GDP growth, according to the report, and the restaurant industry is expected to see double-digit annual growth continue into the foreseeable future, presenting lots of dining industry opportunities.
But the report warned that this is an ultra-competitive and rapidly changing industry in China and said that brands must use technology to get an edge on the huge and ever-growing number of competitors. Other findings in the report about his key global restaurant market include:
- High failure rate among high number of new brands with limited offerings: Every day in top tier Chinese cities, 100 new brands open, and more than 70 percent of them do not make it to the end of the year.
- Top five new restaurant categoriesare fast food, bakery, hot pot, Sichuan cuisine and barbecue.
- On-demand food delivery tripled last year alone to 130 billion yuan ($19.1 billion USD) with expectations of growth to 300 billion yuan ($44.1 billion) in the next two years.
- Huge delivery service opportunities with 79 percent of Chinese consumers order multiple times a week, with average orders of 40 yuan each ($5.88).
- The length of the peak lunch hour continues to expandas a result of on-demand ordering
- And more than 70 percent of diners are middle-class millennial consumers, who also pay more for quality, health, food safety, design and new social experiences.
The company, which operates an online delivery platform, said the report highlights that these services are key to growing efficiencies and increasing orders in a highly competitive environment. As an example, the company said just one restaurant in Beijing, Jinbaiwan Wangjing, reports that average revenue from delivery-focused employees is now five times that of their in-store dining-focused equivalents.
Meituan-Dianping's on-demand delivery platform itself handles more than 13 million delivery orders daily from more than 6.5 million restaurants across China.