SHANGHAI: Digitalisation is key to improving efficiency and reducing costs for China’s food and beverage (F&B) industry, as well as driving its high-quality development, amid a period of rising revenue but declining profits, say business leaders and experts.
According to data from the National Bureau of Statistics, China’s catering sector recorded total revenue of 3.06 trillion yuan or about US$429.6bil from January to July, up 7.1% year-on-year.
However, the latest half-yearly earning reports released by several leading F&B companies, including hotpot chain Xiapuxiapu and Japanese-style noodle chain Ajisen (China) Holdings, show a fall in profits.
Despite the challenges, business leaders and experts present at the Meituan Catering Industry Conference on Sept 3 were still positive about the future prospects of China’s F&B industry, fixing their eyes on digitalisation.
“F&B is an industry that has long-term resilience, but it requires changes to keep thriving.
“We are witnessing a transformation that we have never seen in the past three decades, making us go deeper into the industry for long-term development,” said Wang Puzhong, chief executive of the core local commerce business at Meituan, a leading food delivery company and popular on-demand service platform in China.
Wang pointed out that people’s demand for F&B services is constant.
Meituan’s data show that the demand for F&B among people living in Chinese towns will continue to expand.
By the end of 2030, each person in a town is expected to eat out five to six times per week.
On the digitalisation of China’s F&B sector, food delivery platforms now form a critical part of people’s daily lives.
An increasing number of consumers are seeking out restaurants, ordering, eating and providing reviews on online platforms.
According to the company, 275 million consumers use Meituan for F&B every week.
This in turn makes it a crucial battlefield for F&B brands to expand both online and offline.
While it can be expensive to open an physical restaurant chain with dine-in services, cost-effective “satellite restaurants” have mushroomed on online platforms.
Basically, a satellite restaurant refers to a small shop affiliated to chain brands that specialises in food-delivery services.
With much lower operational costs, these restaurants still boast the advantage of guaranteed food products and services, which have made them popular on online platforms.
To date, a total of 150 F&B brands have launched over 1,000 satellite restaurants on platforms, according to Meituan. — China Daily/ANN
