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Fast Food - China - November 2015

“Online food ordering and delivery service represents an opportunity for fast food restaurants to drive revenue. By offering customised dishes, using healthier and more premium ingredients and extending the brands, the leading fast food chains will revive from the temporary downturn.”
– Terra Xu, Senior Research Analyst

This report looks at the following areas:

  • Revival of international brands against competition
  • Growing fast food business via food for delivery – targeting breakfast and snacking occasions
  • Recovering from the impact of food safety issues

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Table of contents

  1. Overview

    • What you need to know
      • Definition
        • Inclusions
          • Exclusions
            • Market segmentation
              • Chained fast food restaurants
                • Independent fast food restaurants
                  • Demographic classification
                    • Household income
                    • Executive Summary

                        • The Market
                          • China’s fast food market is undergoing gradual recovery
                            • Figure 1: Total China fast food and takeaway market, by value sales, 2010-20
                            • Figure 2: Total China fast food and takeaway market, by market volume, 2010-20
                          • Individual fast food brands see faster growth than chained brands
                            • Key Players
                              • Fragmented fast food market with close competition between international and domestic brands
                                • Figure 3: Leading chains in the Chinese fast food and takeaway market, by market volume (outlets), 2013-14
                              • Penetrate into lower tier cities
                                • Key players embrace the mobile internet
                                  • Innovation trends in customisation, delivery, cross-category strategy and ethical marketing
                                    • The Consumer
                                      • Ordering food for delivery becomes a habit for consumers
                                        • Figure 4: Habits of ordering food for delivery, August 2015
                                      • Lunch and breakfast see growth potential, while dinner may face challenges
                                        • Casual and snacking occasions may drive business growth
                                          • Figure 5: Penetration of eating fast food in different occasions, August 2015
                                          • Figure 6: Fast food brand penetration, August 2015
                                        • McDonald’s and KFC share similar brand image
                                          • Subway is perceived to be trendy and innovative
                                            • Food safety and variety may drive Zhen Kungfu and Yoshinoya to grow.
                                              • Figure 7: Fast food brand image perception, correlation analysis, August 2015
                                            • Clean environment is the most important to attract repeating visit
                                              • Figure 8: Important factors leading to higher visit frequency to food restaurants, August 2015
                                            • What we think
                                            • Issues and Insights

                                              • Revival of international brands against competition
                                                • The facts
                                                  • The implications
                                                    • Growing fast food business via food for delivery – targeting breakfast and snacking occasions
                                                      • The facts
                                                        • The implications
                                                          • Recovering from the impact of food safety issues
                                                            • The facts
                                                              • The implications
                                                              • The Market – What you need to know

                                                                • China’s fast food market is expected to see gradual recovery
                                                                  • Consumers’ increasing income and willingness to pay for service, the development of the online ordering platform and mobile payment are driving growth
                                                                    • Food safety issues and the rise of casual dining restaurants are potential barriers
                                                                      • Individual fast food brands see faster growth than chained brands
                                                                      • Market Size and Forecast

                                                                          • Figure 9: China fast food and takeaway market, value sales and volume, 2010-20
                                                                          • Figure 10: Total China fast food and takeaway market, by value sales, 2010-20
                                                                          • Figure 11: Total China fast food and takeaway market, by market volume (number of outlets), 2010-20
                                                                      • Market Factors

                                                                        • Market drivers
                                                                          • Recovery of foodservice industry and continuous increase of disposable income
                                                                            • Rapid development of online food ordering and delivery platforms
                                                                              • Mobile pre-order and payment apps may help to drive purchase
                                                                                • Market challenges
                                                                                  • Food safety issues – chicken products are losing trust
                                                                                    • The rise of casual dining restaurants
                                                                                    • Market Segmentation

                                                                                      • Chains generate larger proportion of market value with fewer outlets
                                                                                        • Figure 12: China fast food and takeaway market, by market segments, 2010-15
                                                                                        • Figure 13: Independent fast food and takeaway market, by value sales, 2010-20
                                                                                        • Figure 14: Chained fast food and takeaway market, by value sales, 2010-20
                                                                                      • Individual fast food brands see faster growth than chained brands
                                                                                      • Key Players – What you need to know

                                                                                        • Fragmented fast food market with close competition between international and domestic brands
                                                                                          • Fast growing domestic chains penetrating into lower tier cities
                                                                                            • Leading chains making efforts to develop franchise outlets
                                                                                              • Key players embracing the mobile internet and online food ordering and delivery platforms
                                                                                                • Innovation highlights
                                                                                                • Market Share

                                                                                                  • Fragmented fast food market
                                                                                                    • Close competition between international and domestic players
                                                                                                        • Figure 15: Leading chains in the Chinese fast food and takeaway market, by market volume (number of outlets), 2013-14
                                                                                                    • Competitive Strategies

                                                                                                      • Winning the lower tier cities
                                                                                                        • Developing the franchise outlets
                                                                                                          • Embracing the mobile internet
                                                                                                            • Strengthening food delivery services
                                                                                                            • Who’s Innovating?

                                                                                                              • McDonald’s launches “Create Your Taste” program
                                                                                                                • Figure 16: Customised burgers in the McDonald’s “Create Your Taste” program
                                                                                                                • Figure 17: Ordering machine for the McDonald’s “Create Your Taste” program
                                                                                                              • Fun Box allows order and pick-up service at vending machines
                                                                                                                • Dadong opens Dadong Duck outlets offering roast duck burgers
                                                                                                                  • KFC and McDonald’s foraying into the fashion world
                                                                                                                    • Burger King gives away Peace Day Burgers
                                                                                                                    • The Consumer – What you need to know

                                                                                                                      • Eat-in is as popular as take-out for fast food restaurants
                                                                                                                        • Ordering for food for delivery has become a habit for consumers
                                                                                                                          • When ordering food for delivery, consumers prefer using online food delivery platforms and ordering from chained restaurants
                                                                                                                            • Lunch and breakfast see growth potential, while dinner may face a challenge
                                                                                                                              • Casual dining and snacking are emerging occasions to drive growth
                                                                                                                                • Western-style fast food brands are more popular, while non-western style brands appeal to consumers aged 25 or above
                                                                                                                                  • McDonald’s and KFS share similar brand image, Subway is considered innovative and trendy; Zhen Kungfu and Yoshinoya are perceived as safer
                                                                                                                                    • Clean environment is key to attract repeat visits
                                                                                                                                    • Dining Habits

                                                                                                                                      • Eating out and ordering food for delivery are both common ways of dining
                                                                                                                                        • Figure 18: Dining Habits, August 2015
                                                                                                                                      • Eat-in is as popular as take-out for fast food restaurants
                                                                                                                                        • Figure 19: Dining Habits when eating out, August 2015
                                                                                                                                      • Mobile apps are the most commonly used way of ordering food for delivery
                                                                                                                                        • Figure 20: Ways to order food for delivery, August 2015
                                                                                                                                    • Food for Delivery

                                                                                                                                      • Ordering food for delivery becomes habit for consumers with busy lifestyles
                                                                                                                                        • Figure 21: Habits of ordering food for delivery, August 2015
                                                                                                                                      • Consumers prefer to order from online food delivery platforms
                                                                                                                                        • Figure 22: Mostly used ways of ordering food for delivery, August 2015
                                                                                                                                      • Chained restaurants are preferred when consumers order food for delivery
                                                                                                                                        • Figure 23: Preferred restaurants when ordering food for delivery, August 2015
                                                                                                                                      • Target consumers for food delivery service from fast food chains
                                                                                                                                          • Figure 24: Attitude and habit of ordering food for delivery (% agreeing with the statements), August 2015
                                                                                                                                      • Trend in Eating Fast Food

                                                                                                                                        • Lunch is the most popular fast food occasion, and still growing
                                                                                                                                          • Consumers are lowering fast food visiting frequency for dinner purpose
                                                                                                                                            • Breakfast shows growth potential for fast food consumption
                                                                                                                                              • Figure 25: Penetration and trends of eating fast food in breakfast, lunch and dinner, August 2015
                                                                                                                                            • Casual and snack occasions are opportunities for fast food
                                                                                                                                              • Figure 26: Penetration and trends of eating fast food on casual and snacking occasions, August 2015
                                                                                                                                              • Figure 27: Percentage of consumers who have eaten fast food more often for casual dining and snacking, by demographics, August 2015
                                                                                                                                          • Fast Food Brand Penetration

                                                                                                                                            • KFC and McDonald’s remain the most popular brands
                                                                                                                                              • Figure 28: Fast food brand penetration, August 2015
                                                                                                                                            • Non-western style brands appeal to consumers aged 25 or above
                                                                                                                                              • Figure 29: Fast food brand penetration, by age, August 2015
                                                                                                                                            • User profile of leading fast food brands
                                                                                                                                              • KFC, McDonald’s
                                                                                                                                                • Dicos
                                                                                                                                                  • Burger King
                                                                                                                                                    • Hua Lai Shi
                                                                                                                                                      • Subway
                                                                                                                                                        • Yonghe
                                                                                                                                                          • Zhen Kungfu
                                                                                                                                                            • Daniang Dumpling
                                                                                                                                                              • Jill Wonton
                                                                                                                                                                • Malan Ramen
                                                                                                                                                                  • Yoshinoya
                                                                                                                                                                  • Fast Food Brand Image

                                                                                                                                                                    • KFC and McDonald’s perceived brand image is similar
                                                                                                                                                                      • Subway may attract affluent consumers with a ‘healthy’ proposition
                                                                                                                                                                        • Emphasising food safety and variety may drive growth for Zhen Kungfu and Yoshinoya
                                                                                                                                                                          • Figure 30: Fast food brand image perception, correlation analysis, August 2015
                                                                                                                                                                      • Important Factors in Attracting Repeat Visits

                                                                                                                                                                        • Clean environment is the most important factor
                                                                                                                                                                          • Taking advantage of technology to serve food faster
                                                                                                                                                                            • Figure 31: Important factors leading to higher visit frequency at fast food restaurants, August 2015
                                                                                                                                                                          • Location is more important to young consumers
                                                                                                                                                                            • Figure 32: Important factors leading to higher visit frequency at fast food restaurants, by age, August 2015
                                                                                                                                                                          • Home delivery services can attract high earners
                                                                                                                                                                            • Figure 33: Important factors leading to higher visit frequency to fast food restaurants, by income, August 2015
                                                                                                                                                                          • Households with kids look for large menus
                                                                                                                                                                            • Figure 34: Important factors leading to higher visit frequency to fast food restaurants, by household composition, August 2015
                                                                                                                                                                        • Meet the Mintropolitans

                                                                                                                                                                          • Mintropolitans are more used to ordering food for delivery
                                                                                                                                                                            • Figure 35: Dining Habits, by consumer classification, August 2015
                                                                                                                                                                            • Figure 36: Ways of ordering food for delivery, by consumer classification, August 2015
                                                                                                                                                                          • Mintropolitans are more likely to have fast food for casual and snacking occasions
                                                                                                                                                                            • Figure 37: Penetration of eating fast food in different occasions, by consumer classification, August 2015
                                                                                                                                                                          • Mintropolitans show preference towards non-western style brands
                                                                                                                                                                            • Figure 38: Fast food brand penetration, by consumer classification, August 2015
                                                                                                                                                                          • Subway, Yoshinoya and Burger King attract more Mintropolitans
                                                                                                                                                                            • Figure 39: Comparison of fast food brand penetration, by consumer classification, August 2015
                                                                                                                                                                          • Mintropolitans pay more attention to the variety of dishes, organic ingredients and whether there are delivery services or not
                                                                                                                                                                            • Figure 40: Important factors leading to higher visit frequency to food restaurants, by consumer classification, August 2015
                                                                                                                                                                        • Appendix – Market Size and Forecast

                                                                                                                                                                            • Figure 41: Total China fast food and takeaway market, by value sales, 2010-20
                                                                                                                                                                            • Figure 42: Total China fast food and takeaway market, by market volume, 2010-20
                                                                                                                                                                        • Appendix – Market Segmentation

                                                                                                                                                                            • Figure 43: China fast food and takeaway market value, by market segments, 2010-20
                                                                                                                                                                            • Figure 44: China fast food and takeaway market volume, by market segments, 2010-20
                                                                                                                                                                        • Appendix – Methodology and Abbreviations

                                                                                                                                                                          • Methodology
                                                                                                                                                                            • Fan chart forecast
                                                                                                                                                                              • Consumer research
                                                                                                                                                                                • Mintropolitans
                                                                                                                                                                                  • Why Mintropolitans?
                                                                                                                                                                                    • Who are they?
                                                                                                                                                                                      • Figure 45: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
                                                                                                                                                                                      • Figure 46: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
                                                                                                                                                                                    • Abbreviations

                                                                                                                                                                                    Companies Covered

                                                                                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                    Fast Food - China - November 2015

                                                                                                                                                                                    US $3,990.00 (Excl.Tax)