The restaurant market in China has witnessed a significant rebound following the pandemic. According to iiMedia Research, China’s catering industry reached RMB 4.7 trillion in 2021, marking an 18.6% year-on-year increase, and essentially returning the market scale of the catering industry to pre-pandemic levels. In the near future, we anticipate the growth rate of the catering sector to stabilize, with a projected market size of RMB 5.6 trillion by the year 2025.
As society changes, restaurants in China also evolve and adapt to meet the changing needs of their customers. In order to respond to a rising trend of solo diners, they are now offering menu options tailored for single individuals. These options allow solo diners to enjoy a full meal without having to order large portions meant for groups. Furthermore, some restaurants in China are providing comfortable seating arrangements for single guests. For instance, at Haidilao hot pot restaurant (海底捞), if a person is dining alone, the staff will place a stuffed toy on the opposite side of the table.
Social media significantly influences the restaurant market in China
In China’s restaurant market, Generation Z has emerged as a dominant consumer group, constituting around 40% of the total consumers by 2020. This digitally-savvy generation relies heavily on social media platforms like Douyin, Kuaishou, Xiaohongshu, and Weibo for obtaining information.
Download our report on the She Economy in China
Restaurant operators have recognized the significance of these platforms and turned them into competitive arenas to attract Gen Z consumers. Social media plays a pivotal role in how people discover, evaluate, and choose restaurants, elevating consumer awareness and fostering loyalty. Restaurants now prioritize creating visually appealing dining experiences, from beautifully presented dishes to stylish interior designs.
Positive reviews and recommendations from influencers or regular users hold substantial sway over a restaurant’s reputation. Consequently, many restaurants actively engage with review apps and social media platforms, encouraging customers to leave positive feedback. Some even hire rating companies to orchestrate queues and generate positive reviews on various Internet platforms through free dining experiences.
The rise of cutting-edge technology in the restaurant market in China
Chinese restaurant market has experienced a significant rise in cutting-edge technology, transforming the way businesses operate and enhancing the dining experience for customers. For example, robotics and automation have found their way into Chinese restaurants, from robotic chefs flipping dumplings to automated sushi conveyors. Moreover, food delivery robots have already been adopted on a large scale in restaurants in big cities like Beijing. These robots are being fine-tuned continuously, such as including glass covers to the trays to ensure food safety. In short, the robotics and automation technologies can reduce labor costs and provide unique dining experiences for customers in China. According to icspec, the market size of food delivery robots in China reached RMB 1.2 billion at the end of 2020.
Furthermore, the restaurant industry in China is also taking measures to provide consumers with an aesthetic dining atmosphere. For instance, some restaurants use light and shadow technologies including holographic projection to project particular image onto the walls or tables, creating a visually pleasing experience. In Beijing, Quanjude (全聚德，a Chinese restaurant chain known for its Peking roast duck, established in 1864) opened a restaurant with audio-visual immersive light show features. Through the utilization of light and shadow technology, Quanjude revives a traditional dining setting, providing patrons with an immersive experience that has been instrumental in attracting a large number customer base.
From canteen-style eateries to central kitchens: a new era in dining
To meet the evolving demands of modern consumers seeking convenient dining options, Chinese restaurants have introduced canteen-style eateries. These establishments have adopted a novel approach, presenting a variety of pre-cooked dishes in a cafeteria-style setting. Customers can promptly choose their preferred dishes, which are then heated before serving, eliminating the need for the traditional wait times associated with ordering and preparation.
The rise of central kitchens in China is intricately linked to this shift in the restaurant industry. Central kitchens operate as facilities dedicated to standardizing ingredient preparation for multiple restaurant locations. This centralized approach streamlines operations, guarantees consistency in the pre-cooked dishes offered in canteen-style eateries, and upholds high-quality standards. As a result, central kitchens have become essential in meeting the needs of modern consumers for convenient, efficient dining experiences. According to Zhiyan Industrial Research Institute, the market size of the domestic central kitchen industry grew to RMB 16 billion in 2021, marking a 10.34% increase over the previous year. Projections indicate that by 2026, the market size is expected to further grow to RMB 26.9 billion, highlighting the critical role of central kitchens in reshaping the restaurant landscape to cater to contemporary preferences.
Nevertheless, the pandemic has reshaped Chinese consumer perspectives on food choices, with a greater focus on health benefits and product quality in the post-pandemic era, this can poise a threat for pre-prepared food restaurants.
How delivery is reshaping the restaurant market in China
Delivery services have had a profound impact on the Chinese restaurant market, reshaping the industry and transforming the way people dine. Nowadays, Chinese consumers can order food with just a few taps on their smartphones and have it delivered directly to their doorstep. The convenience has significantly expanded the customer base for restaurants. Additionally, delivery services have enabled restaurants to reach a wider audience beyond their physical locations. By partnering with delivery platforms such as Meituan, restaurants can tap into a vast network of potential customers who may not have visited their establishment otherwise. This has facilitated the growth of smaller, independent restaurants and allowed them to compete with larger chains.
As delivery platforms continue to grow, the proportion of national catering revenue attributable to delivery increases steadily, reached about 21.4% in 2022, an increase of 4.5% year-on-year. Moreover, as a result of the pandemic, Chinese consumers have developed the habit of ordering takeaway, which has accelerated the expansion of food delivery channels. According to China Internet Information, as of June 2021, the number of online takeaway users in China has reached 469 million.
What you should know about the Chinese restaurant market?
- The restaurant market in China has experienced a significant rebound following the COVID-19 pandemic. After facing disruptions during the height of the pandemic, the industry has shown resilience and demonstrated signs of recovery.
- More an more restuarants in China are offering menu sets and seats specifically tailored for single guests.
- The Chinese restaurant market has experienced a significant rise in cutting-edge technology, transforming the way businesses operate and enhancing the dining experience for customers.
- Amidst the hustle and bustle of modern life, Chinese consumers are increasingly in search of convenient and quick food options. In response to this, restaurants in China have introduced pre-prepared food options to cater to time-conscious consumers.
- Delivery services have had a profound impact on Chinese restaurant market, reshaping the industry and transforming the way people dine. The size of Chinese food delivery market is expected to continue growing, as it matches Chinese people’s habit of ordering takeaway.
