Page 314 - 2019 White Paper on the Business Environment in China
P. 314
9 White Paper on the Business Environment in China
show the sales of instant noodles, once the bedrock of an 11.3 percent contribution rate on the consumption
China’s convenience food, decline drastically in recent market in 2017. According to official statistics from
years. Industry experts credited the decline to the the provincial statistics bureaus, first-tier cities such
proliferation of choices that consumers have with the as Beijing, Shanghai and Guangzhou crawled out of
rise of online food delivery (Cheng). recession in the catering market. In 2017, the catering
income of Beijing and Shanghai reached 102.8 billion
“Today, online consumption only makes up 15 yuan and 102.5 billion yuan, growing 7.7 percent and
percent of total dining expenses. The majority of food 7.9 percent respectively. Meanwhile, the sales revenue
consumption still happens in actual restaurants,” says of Guangdong’s catering industry rose 5.9 percent to
Zhang Chuan, senior deputy president of Meituan- 368 billion yuan, ranking first in the country (Zheng).
Dianping, an on-demand service provider that
encompasses food delivery and restaurant review Data has a lot to offer when it comes to revamping
functions. Recognizing such demands, Meituan- old-school catering services. China has nearly 750 million
Dianping is leveraging its ecosystem both online where mobile internet users who now see paying by phone as
customers can search nearby restaurants, order food a way of life, according to the China Internet Network
delivery or book a restaurant, and offline where users line Information Center. Mobile payment providers such as
up, order food and pay through the company’s cashier Alipay and WeChat Pay handled 775 billion transactions
system. The systems generate a data pool, gathering last year, according to data from market researcher
information on customer behavior that covers dining Ipsos. That sheer volume indicates that the catering
in, dining out, group buying, booking and payment, industry is in a good position to take advantage of the
which in turn helps restaurants better understand what same big data services used by financial companies
customers need so as to improve sales. On line ordering and marketing departments to better understand
and QR code ordering and payment were the game- consumers, increase efficiency and even create new
changers, as they generate enormous amounts of data recipes. Internet companies have found themselves
to assess and record customer behavior. Personalized in a good position to upend the traditional dining
marketing also helps restaurants surmount geographical business, as they are well-stocked with information
constraints. A traditional restaurant typically draws in about consumers’ browsing histories, purchasing
customers within a radius of three to five kilometers, preferences and credit records. Therefore, China’s tech
but with the aid of data analytics, prospective diners can giants Alibaba Group Holding Ltd and Tencent Holdings
order food from throughout the city to try novel dishes. Ltd have wasted little time in harnessing data analysis,
Another reason for deploying data in China has roots in with Alibaba incubating Koubei and Tencent backing
the evolving habits of young consumers. Unlike their Meituan-Dianping in their fight for supremacy on the
Western counterparts who have a more straightforward catering front.
search-and-buy approach, Chinese consumers have a
penchant for exploring during the shopping process
and value online peer reviews (He and Cheng).
Companies are now laying more emphasis on
building and preserving brand image, and competition
in the market has evolved from competition between
product categories to a full-fledged brand battle, an
indication that the development of the catering industry
has come to a new stage. China’s total retail sales of
consumer goods hit 36.6 trillion yuan (US$5.80 trillion) in
2017, with the income from catering businesses taking
up 10.8 percent, which was 3.96 trillion yuan. With a
10.7-percent year-on-year growth rate, the volume of
the nation’s catering sector ranked just next to that of
the UK. The nation’s catering income has been rising
steadily year-on-year and having a positive impact on
the whole consumer market. The catering market had
314
show the sales of instant noodles, once the bedrock of an 11.3 percent contribution rate on the consumption
China’s convenience food, decline drastically in recent market in 2017. According to official statistics from
years. Industry experts credited the decline to the the provincial statistics bureaus, first-tier cities such
proliferation of choices that consumers have with the as Beijing, Shanghai and Guangzhou crawled out of
rise of online food delivery (Cheng). recession in the catering market. In 2017, the catering
income of Beijing and Shanghai reached 102.8 billion
“Today, online consumption only makes up 15 yuan and 102.5 billion yuan, growing 7.7 percent and
percent of total dining expenses. The majority of food 7.9 percent respectively. Meanwhile, the sales revenue
consumption still happens in actual restaurants,” says of Guangdong’s catering industry rose 5.9 percent to
Zhang Chuan, senior deputy president of Meituan- 368 billion yuan, ranking first in the country (Zheng).
Dianping, an on-demand service provider that
encompasses food delivery and restaurant review Data has a lot to offer when it comes to revamping
functions. Recognizing such demands, Meituan- old-school catering services. China has nearly 750 million
Dianping is leveraging its ecosystem both online where mobile internet users who now see paying by phone as
customers can search nearby restaurants, order food a way of life, according to the China Internet Network
delivery or book a restaurant, and offline where users line Information Center. Mobile payment providers such as
up, order food and pay through the company’s cashier Alipay and WeChat Pay handled 775 billion transactions
system. The systems generate a data pool, gathering last year, according to data from market researcher
information on customer behavior that covers dining Ipsos. That sheer volume indicates that the catering
in, dining out, group buying, booking and payment, industry is in a good position to take advantage of the
which in turn helps restaurants better understand what same big data services used by financial companies
customers need so as to improve sales. On line ordering and marketing departments to better understand
and QR code ordering and payment were the game- consumers, increase efficiency and even create new
changers, as they generate enormous amounts of data recipes. Internet companies have found themselves
to assess and record customer behavior. Personalized in a good position to upend the traditional dining
marketing also helps restaurants surmount geographical business, as they are well-stocked with information
constraints. A traditional restaurant typically draws in about consumers’ browsing histories, purchasing
customers within a radius of three to five kilometers, preferences and credit records. Therefore, China’s tech
but with the aid of data analytics, prospective diners can giants Alibaba Group Holding Ltd and Tencent Holdings
order food from throughout the city to try novel dishes. Ltd have wasted little time in harnessing data analysis,
Another reason for deploying data in China has roots in with Alibaba incubating Koubei and Tencent backing
the evolving habits of young consumers. Unlike their Meituan-Dianping in their fight for supremacy on the
Western counterparts who have a more straightforward catering front.
search-and-buy approach, Chinese consumers have a
penchant for exploring during the shopping process
and value online peer reviews (He and Cheng).
Companies are now laying more emphasis on
building and preserving brand image, and competition
in the market has evolved from competition between
product categories to a full-fledged brand battle, an
indication that the development of the catering industry
has come to a new stage. China’s total retail sales of
consumer goods hit 36.6 trillion yuan (US$5.80 trillion) in
2017, with the income from catering businesses taking
up 10.8 percent, which was 3.96 trillion yuan. With a
10.7-percent year-on-year growth rate, the volume of
the nation’s catering sector ranked just next to that of
the UK. The nation’s catering income has been rising
steadily year-on-year and having a positive impact on
the whole consumer market. The catering market had
314
