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Fast Food - China - October 2016

“For fast food brands, embracing the trend of healthy and experiential dining is the key to growth in the near future. In the meantime, getting more innovative can help to win over young consumers.”

– Summer Chen, Research Analyst

This report looks at the following areas:

  • Rise of experiential-driven dining: posing a challenge yet creating an opportunity
  • What makes a healthy menu?
  • Get innovative to win over young consumers

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What's included

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
        • Included
          • Exclusions
            • Definitions
              • Figure 1: Definition of low/mid/high MHI groups, by city tier
          • Executive Summary

              • The market
                • Seeing gradual recovery
                  • Figure 2: Best- and worst-case forecast for fast food and takeaway market value, China, 2011-21
                • Key players
                  • Competitive landscape experiences few changes
                    • Figure 3: Leading chains in the Chinese fast food and takeaway market, by market volume (number of outlets), 2014-15
                  • Leading companies reposition themselves as more casual
                    • International giants seek further localisation
                      • The consumer
                        • Although relaxing, fast food restaurants are not seen as good venues for socialising
                          • Figure 4: Perceptions of fast food restaurants, May 2016
                        • Long waiting time is the top issue to be resolved
                          • Figure 5: Unhappy fast food experience, May 2016
                        • Healthy menu innovations are in great demand
                          • Figure 6: Attitudes towards healthy menu innovations, May 2016
                          • Figure 7: Awareness of superfoods, August 2016
                        • Consumers are replacing fast food with food delivery service
                          • Figure 8: Sources of food delivery business, May 2016
                        • What we think
                        • Issues and Insights

                          • Rise of experiential-driven dining: posing a challenge yet creating an opportunity
                            • The facts
                              • The implications
                                • What makes a healthy menu?
                                  • The facts
                                    • The implications
                                      • Get innovative to win over young consumers
                                        • The facts
                                          • The implications
                                          • The Market - What You Need to Know

                                            • Recovery seen in 2016
                                              • Fast food brands seek growth under fierce competition and rising costs
                                                • Independent brands see a faster growth than chains
                                                • Market Size and Forecast

                                                    • Figure 9: Sales value and growth of fast food and takeaway market, China, 2011-16
                                                    • Figure 10: Best- and worst-case forecast for fast food and takeaway market value, China, 2011-21
                                                    • Figure 11: Best- and worst-case forecast for fast food and takeaway market volume, China, 2011-21
                                                • Market Factors

                                                  • Eating out becomes a key spending area
                                                    • Figure 12: Revenue from food service, China, 2011-16
                                                  • Brand repositioning creates more occasions for fast food restaurant visits
                                                    • Healthy menu innovations can meet a real need
                                                      • Competition from other categories stiffens
                                                        • Rising costs pose a challenge
                                                        • Market Segmentation

                                                          • Chains are growing, but under pressure
                                                            • Figure 13: Value sales of fast food and takeaway market, by market segment, China, 2011-16
                                                            • Figure 14: Best- and worst-case forecast for chained fast food and takeaway market value, China, 2011-21
                                                          • Independent stores continue to see robust growth
                                                            • Figure 15: Best- and worst-case forecast for independent fast food and takeaway market value, China, 2011-21
                                                        • Key Players - What You Need to Know

                                                          • Competitive landscape experiences few changes
                                                            • Major companies make moves to reposition themselves as more casual
                                                              • International giants Yum! Brands and McDonald’s seek further localisation
                                                                • Innovation highlights
                                                                • Market Share

                                                                  • Yum! Brands takes the lead
                                                                    • Figure 16: Leading chains in the Chinese fast food and takeaway market, by market volume (number of outlets), 2014 and 2015
                                                                  • Hua Lai Shi follows closely on the list
                                                                    • McDonald’s reports unsatisfactory results but ambitious growth plans
                                                                      • Zhen Kungfu faces difficulty in expansion
                                                                        • Subway enjoys high growth thanks to a healthy brand image
                                                                        • Competitive Strategies

                                                                          • New store format improves in-store experience
                                                                            • Healthier ingredients attract wealthy consumers
                                                                              • ‘Make your own’ service model enriches personalised experience
                                                                                • International brands seek further localisation
                                                                                • Who’s Innovating?

                                                                                  • McDonald’s
                                                                                    • Creative hosting of food banquet to present healthy concepts
                                                                                      • Targeting young consumers through social media
                                                                                        • Serving alcoholic drinks in South Korea
                                                                                          • KFC
                                                                                            • Engaging robots in taking orders
                                                                                              • Introducing fun cross-category products to attract attention
                                                                                                • Burger King
                                                                                                  • Movie trailer-style advertisement rising in UK
                                                                                                  • The Consumer - What You Need to Know

                                                                                                    • Although relaxing, fast food restaurants are not seen as good socialising venues
                                                                                                      • Long waiting time is the top issue to be solved
                                                                                                        • Healthy menu innovations are in great demand
                                                                                                          • Consumers are replacing fast food with food delivery service
                                                                                                          • Perceptions of Fast Food Restaurants

                                                                                                            • Fast pace and relaxing are top perceptions
                                                                                                              • Figure 17: Fast food restaurant perceptions, May 2016
                                                                                                            • The young generation in particular see fast food as suitable for them
                                                                                                              • Figure 18: Percentage of consumers who associate fast food restaurants with being suitable for young, May 2016
                                                                                                            • Not innovative or modern, fast food restaurants are a less good venue for socialising
                                                                                                              • Differences between genders
                                                                                                                • Figure 19: Perceptions of fast food restaurants, by gender, May 2016
                                                                                                            • Most Frequently Visited Restaurant

                                                                                                              • KFC retains an unassailable lead, followed by McDonald’s
                                                                                                                • Figure 20: Most frequently visited fast food restaurant, May 2016
                                                                                                                • Figure 21: Selected most frequently visited fast food restaurant, by city tier, May 2016
                                                                                                              • Difference across cities
                                                                                                                • Figure 22: Selected most frequently visited fast food restaurant, by city, May 2016
                                                                                                              • Casual dining restaurants and coffee houses also on the list
                                                                                                                • Figure 23: Most frequently visited fast food restaurant, other categories, May 2016
                                                                                                            • Problems to Be Solved

                                                                                                              • Long waiting times are least tolerable issue
                                                                                                                • Figure 24: Unhappy fast food experiences, May 2016
                                                                                                              • Difficulty in finding tables can also be annoying
                                                                                                                • Young consumers are more sensitive over unhappy experiences
                                                                                                                  • Figure 25: Top unhappy fast food experiences encountered and are annoying, by demographics, May 2016
                                                                                                              • Healthy Menu Innovations

                                                                                                                • Consumers demand meal sets with balanced nutrition the most
                                                                                                                  • Figure 26: Attitudes towards healthy menu innovations, May 2016
                                                                                                                • Women appear more health-conscious than men
                                                                                                                  • Figure 27: Percentage of consumers who believe healthy menu innovations as absolutely necessary, by gender, May 2016
                                                                                                                • Consumers in Shanghai prefer more and better beverages
                                                                                                                  • Figure 28: Percentage of consumers who believe healthy menu innovations as necessary (absolutely and somewhat), by city, May 2016
                                                                                                              • Superfood Awareness

                                                                                                                • Blueberries and Goji berries enjoy high awareness amongst majority of public
                                                                                                                  • Figure 29: Awareness of superfoods, August 2016
                                                                                                                • Blueberries are particularly popular among young females aged 25-29
                                                                                                                  • Figure 30: Blueberry awareness among females, August 2016
                                                                                                                • Other superfruits, vegetables and ancient grains better-known among high income earners
                                                                                                                  • Figure 31: Selected superfood awareness, by income, August 2016
                                                                                                              • Food Delivery Occasions

                                                                                                                • High penetration for lunch on working days
                                                                                                                  • Figure 32: Food delivery occasions, May 2016
                                                                                                                • Food delivery on days off is more favoured by young consumers
                                                                                                                  • Figure 33: Food delivery occasions, by age, May 2016
                                                                                                              • Sources of Delivery Business

                                                                                                                • Fast food restaurants are likely to lose share in the popularity of food delivery
                                                                                                                  • Figure 34: Sources of food delivery business, May 2016
                                                                                                              • Meet the Mintropolitans

                                                                                                                • Stronger desire for a healthy diet
                                                                                                                  • Figure 35: Percentage of consumers who believe healthy food innovations absolutely necessary and somewhat necessary, by consumer classification, May, 2016
                                                                                                                • More effort needed to satisfy Mintropolitans
                                                                                                                  • Figure 36: Unhappy fast food experiences encountered that are annoying, by consumer classification, May 2016
                                                                                                                • Ordering food delivery for workday lunches more often
                                                                                                                  • Figure 37: Food delivery occasions, by consumer classification, May 2016
                                                                                                                  • Figure 38: Sources of food delivery business, by consumer classification, May 2016
                                                                                                              • Appendix: Methodology and Abbreviations

                                                                                                                • Methodology
                                                                                                                  • Fan chart forecast
                                                                                                                    • Abbreviations

                                                                                                                    Fast Food - China - October 2016

                                                                                                                    US $3,990.00 (Excl.Tax)