Dining-out market continues to grow, technology innovation to reshape the industry’s ecosystem

24 November 2015

According to AlixPartners’ 2015 China Restaurant & Foodservice Review

(November 24, 2015) – AlixPartners, the global advisory firm, today released the findings of its 2015 China Restaurant & Foodservice Review. The study, based on interviews with more than 1000 Chinese consumers over 18 across China, highlights the state of current consumer behavior, dining preference as well as growth opportunities for restaurant operators in China.

Strong Growth Potential 
Alongside the rapidly evolving restaurant scene in China, the growth potential remains strong. According to the study, 77% of surveyed has dined or purchased meals outside of home at least once a week over the last 12 months. Over half of them (55%) said that they had dined or purchased meals outside more than once a week. On average, consumers who live in Tier 1 1 cities tend to visit restaurants or purchase outside more frequently than those living in Tier 2 and 3 cities.

Despite the continuous growth of the dining-out market in China, average spend per meal is lower than western counterparts. However, the average spend is comparable to the S. Korea and Japan markets which AlixPartners has also conducted surveys, where the average spend is around RMB69 and RMB88 for S. Korea and Japan respectively. Based on the study, this dining and purchase pattern is expected to stay the same over the next 12 months in China.

Change of eating habits and fast-paced lifestyle have spurred high growth of fast food sector, thus China remains a lucrative market. The study also says over 35% of respondents would choose fast food (37%) or fast casual (38%) at least once a week. While fast food remains a popular food category in China, the study has indicated that demand on take out and food delivery has grown. In terms of delivery efficiency, consumers show little tolerance on waiting time. 83% of respondents said that they are unwilling to wait for more than 30 minutes for food delivery.

Be Consistent and Be Healthy 
Despite increasing demand on convenience, consumers are unwilling to compromise with quality. The AlixPartners’ study also reveals that consumers increasingly choose food consistency and quality over variety. According to the survey, nearly 55% of the Chinese respondents express their preferences over restaurant chains, while only 8% of respondents strongly support independent restaurants. People prefer chain restaurants over local establishments for a number of reasons. Most of those reasons are related to fear of the unknown. Chain restaurants follow certain standards and offer a sense of normalcy. They are the "safe" choice when traveling, and the easy choice when dining locally.

While food quality is the most important factor for consumers when selecting restaurants, healthy options are also important as consumers become more health conscious. 89% of consumers believe that healthy menu is the key consideration when they decide to dine out. Meanwhile, 92% of Chinese consumers express the importance of nutritional information, particularly those in Southern China and Tier 1 cities. Almost all Chinese consumers are willing to pay 10-15% premium for a healthy menu option.

Mobile Technology as the New Norm 
With the boom of m-commerce, mobile has become the most popular channel for diners to decide where to eat and what to spend money on. According to the study, 70% of Chinese consumers follow their favorite restaurants on Weibo and WeChat to learn about new menus (71%) and restaurant deals (66%), especially in Tier 1 cities. Most Chinese consumers use mobile devices to search restaurants nearby (65%), coupon deals (59%), food delivery (50%) and food reviews (50%), but less for payments (41%) and reservations (37%).

Commenting on the recent trend of mobile tech developments, Steve Maurer, Managing Director of AlixPartners said, "China has become the world’s largest mobile phone market. Mobile technology is revolutionizing the way diners interact with restaurants. This new trend requires restaurant operators to take a holistic approach to engage with its customers and tap into a digital ecosystem. Companies will need to experiment to figure out what strategies should be used to most effectively engage target customers and extend their most valuable customer relationships."

About the AlixPartners 2015 China Restaurant & Foodservice Review 
The "AlixPartners 2015 China Restaurant & Foodservice Review" was designed and orchestrated by AlixPartners in September 2015. It polled 1000 adults (18+) nationwide to measure frequency of dining out, dining budget, preferred type of restaurant and food, key criteria for restaurant selection. The purpose of the study is to understand the state of current consumer behavior, dining preference as well as growth opportunities faced by restaurant operators in China.

About AlixPartners 
AlixPartners is a leading global business advisory firm of results-oriented professionals who specialize in creating value and restoring performance. We thrive on our ability to make a difference in high-impact situations and to deliver sustainable, bottom-line results. The firm’s expertise covers a wide range of businesses and industries whether they are healthy, challenged or distressed. Since 1981, we have taken a unique, small-team, action-oriented approach to helping corporate boards and management, law firms, investment banks, and investors to respond to crucial business issues. For more information, visit www.alixpartners.com.