Suspended Dining-in Encourages Take-out Services

By Liu Xinwei

It is the third year since the outbreak of the COVID-19 epidemic， and the catering industry which once was hit hardest now is recovering. Facing uncertain future and changing consumption trends， the catering industry is constantly seeking breakthroughs in product categories or cross-industry business.

Catering industry is maturing， and ushering in a new era of consumption

Currently， the catering industry in China is maturing. Stimulated by undiminished growth momentum， the industry is improving year-on-year as a whole， developing comprehensively and in high quality. At the same time， after years of development and market competition， the catering industry in China has entered a new stage， meaning it has diversified investment sources， developed various business models and chain operation， and realized industrialized development.

“Under the impact of the epidemic， the catering industry is ushering in a new era of consumption，” said Xiao Mingchao， trend marketing expert and Founder and CEO of Trendforesee Consulting.

First come the new food materials. Today， the decisive core of catering brands lies in high-quality local ingredients. The so-called local ingredients refer to the highest quality， original and green ingredients through the supply chain. The guaranteed source and quality of ingredients are key to the product competitiveness of a brand， as green， fresh and safe food is the common concern of the industry and the whole society.

The second is the new business models， meaning its important for catering brands to create a sense of social ritual， as nowadays more and more consumers like to share food and drink on social media that they believe are attractive.

The third is the new culture， namely attracting consumers by constructing the storefronts into well-known IPs with cultural features.

The fourth is the new business. According to the White Paper for Chain Operation and Franchise in Catering Industry 2021， the number of chain restaurants in China in 2021 topped 40，000， up by 8.9% from 2020. The epidemic made chain operation more attractive， and many chain catering brands have developed a business model of catering + new retail.

As described in the White Paper， “In recent years， policies have been introduced to promote the development of restaurant chains， which simplify the application procedures for and encourage chain operations. Unlike small enterprises with weaker risk resistance， large restaurant chains are actively seeking opportunities to further expand their market share in adverse circumstances based on stronger financial capabilities and better cost control.”

The fifth is the new technology. With the rapid development and popularity of Internet-related technology，“Internet+” has become a trend， while the emergence of one-stop platform for Internet+catering business model causes changes in traditional catering industry： offline transactions move online， boosting industrial circulation and the popularity of services.

“Catering services are closely related to peoples lives， and its quite normal to see a rising consumer demand for food safety and nutrition， as well as higher requirements for a sense of experience and value in consumption. Strengthening the brand， creating values， applying new technologies and reaching users is a must for catering brands in the new consumer era，” Xiao Mingchao said.

According to a survey by iiMedia Research， most consumers are optimistic about the development prospects of catering industry. Specifically， up to 27.4% of respondent were very optimistic， 51.0% were optimistic， while 19.7% were generally optimistic. Only 1.8% and 0.1% were not optimistic and not at all. The survey concluded that although the impact of the epidemic has shocked catering industry severely， the positive outlook means that the catering industry in China still has great potential for development.

Take-out replaces dine-in， while pre-made dishes get popular

Due to the “surprise attack” by this wave of epidemic， local governments in several regions in China issued the epidemic prevention and control measures to “suspend dine-in”. In a situation of normalized epidemic prevention and control measures， to maintain store operation， take-out and pre-made dishes become new choices for the catering industry.

“Previously， takeout and online orders together contributed at most a quarter of store sales. Now with the suspension of dine-in， restaurants shift focus to take-out and online orders， and online take-out and the counters along the entrance lobby are main sources of revenue at the moment，” said Guo Suhong， Deputy Manager of the food and beverage department of Beijing Tongheju Yuetan Store.

After the suspension of dine-in， how to secure high-quality food supply to home quarantining residents？ Many restaurants turn to pre-made dishes or semi-finished dishes. For example， through Jingdong， Tmall， Hema， Walmart and other channels Quanjude sells individual set of hand-sliced roast duck， which can be ready after simply being heated up in a microwave.

Besides， the takeout platforms also enriched the category and increase the stock of pre-made dishes. Elemes e-supermarket urgently launched special plans for pre-made dishes to put on more than 100 pre-made dishes online market in May. Meituan Maicai （meaning “buy vegetables”） also added the pre-made dishes to nearly 100， including cooked pot-stewed food， common ready-toeat dishes， restaurant special dishes， Western dishes and hot pot packages and so on. Meanwhile， the service time for delivery is extended to 24：00.

Since there may be a surging demand for various restaurants and eateries to do businesses through online platforms during the suspension of dinein， Meituan and Eleme developed a convenient and quick review procedure for applicants the Beijing， which can give approvals in just one hour at the soonest， to allow qualified restaurants in urgent need to carry out takeout business.

According to Development Status and Market Research Analysis Report of Chinas Catering Industry in 2022 （the Report） by iiMedia Research， in 2021 the size of Chinas catering industry was RMB 4.69 trillion， marking an increase of 18.6% year-on-year， and meaning the market basically recovered to the level before the epidemic. In 2022， the catering industry is still seriously affected by the epidemic， but the booming business of pre-made dishes has helped the catering industry deal with the impact of dine-in business and provide the industry with new profitability models. The catering industry is expected to grow slowly in a short term， with a projected market size of RMB 5.56 trillion in 2025.

In terms of dining types， the Report indicated that more consumers choose take-out than dine-in： up to 37.2% of respondents had 5 to 8 takeouts per week and 25.1% had 9 to 12， and it believed that consumers may order take-out more frequently due to the epidemic and the more convenient online consumption.

Catering industry gets smarter

With an increasing Internet penetration in catering industry， online life service platforms have become a major channel for consumers to learn restaurant information and select restaurants， and also a main way to book tables when dining out for the convenience and rich information. Among those who have booked tables in restaurants， over 80% of respondents have used online life service platforms. In terms of queuing up for tables， the most popular method is still to take a number in stores， but 51.7% of respondents would like to queue up online via cell phones if they can choose.

According to Analysis Report of Operating Model and Investment Strategy Plans for Internet Catering Industry in China in 2022-2028 （the analysis report） by Zhiyanzhan Industrial Research Institute， China is currently in an era of data and networking. For the catering industry， it should also consider dealing with development challenges with the thinking mode of interconnection and sharing， so it becomes particularly important for the collection， organization and sharing of data. In the future， it may be a major trend for the catering industry to establish mutually beneficial shared one-stop online and offline services and promote online and offline integration.

“The application of new technologies and the Internet is becoming an effective way to educate new consumption and develop new retail business. In the future， the catering industry might be developed into a networked and digitalized retail business，” the analysis report stated.

At the same time， the development of related sectors also brings more convenience to the catering industry. The analysis report expected that in the future restaurants would outsource more non-core functions， making themselves smaller， more specialized， leaner and faster， to effectively respond challenges.

The Report concluded： “Today， more and more consumers are accustomed to meeting their various needs for food and beverage through online channels， and selecting restaurants and booking tables through online life service platforms regularly. Besides， a major consumer group for the catering industry， represented by the new middle class， pays attention to the efficiency and experiences of the whole catering process， in addition to the quality and safety of food as always， meaning catering industry should focus on new technology and new experiences for future development. in other words， the catering industry should develop intelligent and digital business models to adopt to the preferences of young consumers， while mobile， selfservice and intelligent new catering experience is an important direction for future development.”

“To attract consumers in the digital era， catering brands have to take the product as the basis， the content as the carrier and the digital technology as the engine， in order to continue to lead the catering industry and create consumption trends，” Xiao Mingchao said.