Revenue growth back on the menu for catering industry

After suffering a drop in revenue in 2020 due to the outbreak of the COVID-19 pandemic, China's catering industry showed strong growth momentum in 2021, bringing insiders hope of recovery.

According to the National Bureau of Statistics, the revenue of China's catering industry was 3.95 trillion yuan ($620 billion) in 2020, down 15.4 percent from 2019, the first decline in nearly a decade. From January to December 2021, the industry's revenue was 4.69 trillion yuan, growing 18.6 percent year-on-year and reaching the similar scale of 2019.

Behind the recovery are the innovative measures adopted in the catering industry, as the pandemic changed people's consumption habits. The changes feature sales of more semifinished dishes and the growth in takeout services, among others.

"Digital technologies have changed the way of catering for people," Li Jingfei, founder of restaurant chain Yuxiang Spicy Grandma, told Guangzhou Daily based in Guangzhou, Guangdong province. He said that more catering enterprises are going online for sales, using social media apps such as Microblog, Douyin, WeChat and Kwai.

Li has developed a habit of livestreaming on Douyin－the Chinese version of TikTok－every Friday, promoting dishes. He often uploads his short videos of making dishes to interact with young consumers. His Douyin account has more than 110,000 followers.

To cope with the pandemic, a number of catering enterprises began to accelerate the pace of digitalization and diversification. These measures include expanding online channels to increase sales, increasing delivery services to meet the challenges of the pandemic and building outlets with an immersive customer experience, according to the same Guangzhou Daily report.

It said favorable governmental policies were also in place to relieve the difficulties for enterprises, including a reduction in taxes and fees, provision of credit loan support to small and micro enterprises, and issuance of consumption vouchers for the catering and retail industries.

According to a report on the development of China's catering industry in 2021 released by the World Federation of Chinese Catering Industry, because of the continuous pressure of the pandemic, the confidence in the Chinese catering industry is still fragile due to public health and safety concerns, and its recovery is slower than other commercial sectors.

It said the catering industry also faces other challenges, such as rising labor costs and high rental pressure.

"In recent years, the short supply of laborers has become more and more prominent," said Yi Hongjin, founder of Beijing-based New Century Youth Catering Management, adding that there is an urgent need for professionals in research and development, marketing, planning and other fields.

He admitted that society still thinks of the catering sector as a "low end" in the industrial chain, and many highly educated professionals are reluctant to engage themselves in the catering industry.

Insiders pointed out that despite the large scale of the domestic catering industry as a whole, the industrial scene is represented by many small brands. In addition, the industry features homogenized operations and comparatively low added value, so it has a long way to go to achieve high-quality development.