“The industry of quick service restaurants is expected to keep growing with even fiercer competition. Full service restaurants and street booths are additional competitors for businesses. Brands must maintain their competitive edge in convenience, keep an eye out for chances to extend and premiumise their offerings, and secure the mindshare of youngsters with more humanized marketing.”
Yifan Gu, Associate Director
Key Issues covered in this Report
- Market value and forecast of the total value of quick service restaurants.
- Brands’ marketing activities.
- New product development updates.
- The consumption frequency and price range for quick service restaurants.
- New trial triggers, food and drink preferences, and health optimisations.
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Overview
- What you need to know
- Key Issues covered in this Report
- Covered in this Report
- What you need to know
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Executive Summary
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- The Market
- Figure 1: Retail market value of quick service restaurants, China, 2017-27
- Companies and brands
- Western-style brands have a higher level of concentration
- Figure 2: Store numbers and volume share of the top brands, China, 2022
- Fun marketing and continuous innovation are both essential
- The consumer
- Western brands should secure mind share among youngsters
- Figure 3: Consumption frequency – selected items, high frequency, by age, China, 2023
- The boundary with full service restaurants is blurring
- Figure 4: Upper price limit, China, 2023
- Menu remains the primary attraction
- Figure 5: New trial triggers, China, 2023
- Tea drinks see channel potential in quick service restaurants
- Figure 6: Food and drink preference, China, 2023
- Ingredients and cooking methods are vital to health perception
- Figure 7: Health optimisations, China, 2023
- Ready meals are acceptable but on-site cooking can get a premium
- Figure 8: Attitudes and behaviours – selected items, China, 2023
- What we think
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Issues and Insights
- Western-style brands should prioritise the connection with youngsters
- Figure 9: Example of co-branding events appealing to youngsters
- Business extension to drinks can be included in the plan
- Figure 10: Example of business extension to drinks
- Brands can consider exploring higher-end markets
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- Figure 11: Example of brands exploring higher-end markets
- Western-style brands should prioritise the connection with youngsters
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Market Size and Forecast
- The industry sees high maturity and fierce competition
- Figure 12: Retail market value of quick service restaurants, China, 2017-27
- Chinese-style restaurants have greater market potential
- Figure 13: Quick service restaurants value market share, by segment, China, 2021-22
- The industry sees high maturity and fierce competition
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Market Factors
- Consumption-encouraging and food safety policies are introduced
- Blurred boundaries make cross-category competition imminent
- Figure 14: Example of full service restaurants providing quick service
- Rapid rise of ready meals helps taste standardisation and cost reduction
- Figure 15: Example of ready meals
- Consumption-encouraging and food safety policies are introduced
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Market Share
- Western-style brands have a higher level of concentration
- Figure 16: Store numbers and volume share of the top brands, China, 2022
- Western-style brands have a higher level of concentration
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Marketing Activities
- Social media becomes an important vehicle for brand marketing
- Figure 17: Example of brands’ social media marketing
- Interactive marketing satisfies youngsters’ need for fun
- Figure 18: Example of interactive marketing
- Co-branding helps expand brands’ consumer base
- Figure 19: Example of co-branding events
- Continuous menu innovation is essential to maintain brand recognition
- Figure 20: Example of menu innovation
- Social media becomes an important vehicle for brand marketing
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New Product Trends
- Western-style innovation consolidates Westerns-style brand positioning
- Figure 21: Example of Western-style innovation
- Small-portion dishes are welcomed by consumers
- Figure 22: Example of small-portion dishes
- Drinks are essential for brand extension
- Figure 23: Example of drinks in quick service restaurants
- Store design drives brand image communication
- Figure 24: Example of store design
- Western-style innovation consolidates Westerns-style brand positioning
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Consumption Frequency
- Western foods are yet to be everyday diets
- Figure 25: Consumption frequency, China, 2023
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- Figure 26: Consumption frequency, China, 2023
- Western brands should secure mind share among youngsters
- Figure 27: Consumption frequency – selected items, high frequency, by age, China, 2023
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- Figure 28: Example of Pizza Hut’s cobranding with Genshin Impact
- Finetune brands’ positioning to recruit more regulars
- Figure 29: Consumption frequency – high frequency, by monthly household income, China, 2023
- Figure 30: Consumption frequency – high frequency, by education, China, 2023
- Western foods are yet to be everyday diets
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Upper Price Limit
- The boundary with full service restaurants is blurring
- Figure 31: Upper price limit, China, 2023
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- Figure 32: Upper price limit, by monthly household income, China, 2023
- Figure 33: Example of Starbucks Curbside
- Student discounts can be better leveraged
- Figure 34: Upper price limit, by age, China, 2023
- Figure 35: Example of student discount offered by restaurants
- Extra menus for the elder population help market expansion
- Figure 36: Example of seniors’ canteen
- The boundary with full service restaurants is blurring
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New Trial Triggers
- The menu stays the primary attraction
- Figure 37: New trial triggers, China, 2023
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- Figure 38: Example of menu innovation
- Figure 39: New trial triggers – rich set menus, by city tier, China, 2023
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- Figure 40: Example of set menus
- Rating apps are the most essential marketing tools
- Figure 41: New trial triggers – selected items, by age, China, 2023
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- Figure 42: New trial triggers – selected items, by upper price limit, China, 2023
- Overseas brands attract consumers with higher budgets more
- Figure 43: New trial triggers – selected items, by upper price limit, China, 2023
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- Figure 44: Example of well-known overseas brands
- The menu stays the primary attraction
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Food and Drink Preference
- Desserts can better help Western-style brands localise
- Figure 45: Food preference, China, 2023
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- Figure 46: Example of localised desserts
- Chinese-style restaurants can provide all-day breakfast food
- Figure 47: Food preference – Chinese-style breakfast foods, by region, China, 2023
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- Figure 48: Example of Chinese-style breakfast foods in quick service restaurants
- Tea drinks see channel potential in quick service restaurants
- Figure 49: Drink preference, China, 2023
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- Figure 50: Example of freshly made tea drinks in restaurants
- Figure 51: Drink preference – freshly made tea drinks, by region, China, 2023
- Desserts can better help Western-style brands localise
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Health Optimisations
- Ingredients and cooking methods are vital to health perception
- Figure 52: Health optimisations, China, 2023
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- Figure 53: Example of emphasising high-quality ingredients
- Figure 54: Health optimisations – higher quality ingredients, by age, China, 2023
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- Figure 55: Health optimisations – higher quality ingredients, by age and gender, China, 2023
- Adjustable taste can function as a point of differentiation
- Figure 56: TURF Analysis- Health optimisations
- Figure 57: Health optimisations – adjustable taste, by living status, China, 2023
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- Figure 58: Example of menus specifying the scales of taste
- Calorie-displayed menus bring price-up opportunities
- Figure 59: Health optimisations – display calories on the menu, by monthly household income, China, 2023
- Figure 60: Health optimisations – display calories on the menu, by upper price limit, China, 2023
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- Figure 61: Example of menus with calorie counts
- Ingredients and cooking methods are vital to health perception
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Attitudes and Behaviours
- Ready meals are acceptable but on-site cooking can get a premium
- Figure 62: Attitudes and behaviours – selected items, China, 2023
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- Figure 63: Attitudes and behaviours – selected items, by monthly household income, China, 2023
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- Figure 64: Example of on-site cooking brands
- Niche or classical? Consumers want both
- Figure 65: Attitudes and behaviours – selected items, China, 2023
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- Figure 66: Attitudes and behaviours – selected items – % of ‘agree’, by age, China, 2023
- Street snacks can make a main meal for youngsters
- Figure 67: Attitudes and behaviours – selected items, China, 2023
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- Figure 68: Attitudes and behaviours – selected items, by age, China, 2023
- Ready meals are acceptable but on-site cooking can get a premium
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Food Personas
- Who are they?
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- Figure 69: Food personas, China, 2023
- Figure 70: Food personas, by age, China, 2023
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- Figure 71: Food personas, by monthly household income, China, 2023
- Popular trend followers are ready to spend more
- Figure 72: Upper price limit, by food personas, China, 2023
- Figure 73: Attitudes and behaviours – selected items, by food personas, China, 2023
- Emotional eaters expect more roasted/deep-fried foods
- Figure 74: Food preference – Roasted/deep-fried foods, by food personas, China, 2023
- Who are they?
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Appendix – Market Size and Forecast
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- Figure 75: Total market value of quick service restaurants, China, 2017-27
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Appendix – Methodology and Abbreviations
- Methodology
- Methodology
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