Chinese food brands going global:Policy-led, culture-driven, supply chain winning

Time: 2024-04-09 16:41

In recent years, with the increasing influence of Chinese culture worldwide, the status of Chinese cuisine in the international market has become increasingly prominent.From policy support to consumer environment optimization, from branding to supply chain security, Chinese food enterprises are leveraging multiple forces to seek better internationalization development.

Policy Support for Internationalization of Chinese Cuisine

On March 28, 2024, with the approval of the State Council, the Chinese Ministry of Commerce and nine other departments jointly issued the "Guiding Opinions on Promoting the High-Quality Development of the Catering Industry". This policy document mentions the need to "expand international exchanges and cooperation in Chinese cuisine and promote the high-quality development of the catering industry".

This policy means that Chinese catering enterprises, especially Chinese catering enterprises, will accelerate their own internationalization layout and go global.

In China, the competition in the catering market is intense.

In 2023 after the epidemic, the number of newly registered catering enterprises in China reached 3.19 million, an increase of 24.3% year-on-year.

The threshold for entry into the catering industry is low, and small and medium-sized catering enterprises emerge in an endless stream. Even big brands have to participate in price wars, resulting in high costs and narrow profit margins in the domestic catering industry.

The overseas Chinese food market development is relatively scattered, there is still great potential for development, the number of overseas Chinese restaurants is only 600,000, there is great potential for going abroad.

The overseas consumption environment is favorable

First, the increasing number of overseas Chinese provides a stable consumer group for the Chinese catering industry.

From the 22 million in the early 1980s to today's 60 million, nearly half of the new overseas Chinese population comes from new Chinese immigrants, and the consumption base of overseas Chinese cuisine has also continued to expand.

It is foreseeable that with the development of economic globalization, the overseas Chinese population is expected to continue to increase, providing strong support for the Chinese food consumer group.

Second, Chinese food culture and overall culture are becoming increasingly popular, injecting new vitality into Chinese food consumption.

The influence of Chinese culture overseas is constantly increasing, and Chinese cuisine, as its main carrier, is increasingly favored by local consumers and is no longer limited to serving overseas Chinese communities.

Therefore, many Chinese food brands are actively adopting differentiation strategies to carry out local layout and development overseas.

Unlike the previous model that focused on serving Chinese people, the brand has begun to create a new image of Chinese cuisine that is more in line with the local market based on the taste and aesthetic characteristics of local consumers.

At the same time, Chinese cuisine has gradually begun to pay attention to the taste buds of young local consumers abroad, rather than satisfying the homesickness needs of Chinese people in the past.

Third, the credibility endorsement of well-known Chinese food brands also helps to enhance their awareness and consumption conversion rate in overseas markets.

Strong branding and communication capabilities can bring higher per customer transactions and brand value to enterprises. Through in-depth communication and cooperation with the local market, brand Reputation will also be further enhanced.


Supply chain construction is key

The challenges faced by catering companies in "going global" mainly focus on supply chain construction.
For catering companies that are actively expanding into overseas markets, establishing a robust and flexible global supply chain procurement system is key.
The key factors that need to be considered in supply chain construction include the consistency of the overall supply chain layout, the corresponding operation mode, and the rationality of value distribution.
At the same time, it is necessary to comprehensively consider tax-related issues, such as the distribution of bonded zones, customs clearance convenience, tariff rates, transfer pricing, foreign exchange controls, etc.
In addition, a stable food supply chain is also the core of overseas operations for catering companies.
In the catering industry, the cost of raw material procurement is as high as 41.8%, so supply chain construction and optimization are key areas of concern for companies going global.
Some well-known domestic catering brands are actively implementing localization strategies.
For example, Haidilao established a central kitchen in Singapore, responsible for food manufacturing and processing; Mixue Bingcheng established an operating company in the Philippines and invested in building a processing and production base locally, trying to solve the problem of loss during raw material transportation.
Overall, supply chain construction is the key to the successful "going global" of catering enterprises. Enterprises need to plan and implement carefully from multiple dimensions to ensure the smooth landing and operation of overseas business.

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