While Chinese food is the first love of most Chinese consumers, much of China’s middle class has also embraced foreign restaurants. This has helped foreign food and beverage (F&B) chains to find success in the country, based on their novelty, quality, competitive prices, and air of sophistication.

Sensing opportunity, foreign restaurants have expanded aggressively across the country, and many are now fixtures at urban malls, department stores, and shopping streets in China.

This begs the question: is there a pattern to the kind of roll-out strategies unleashed by foreign F&B brands in China? If so, what lessons do they hold for others looking to deepen or establish a presence in the country in the years ahead?

In answering these questions, we partnered with retail data collection specialist LocalGravity, which catalogues the location of retail stores across every city in China at regular intervals.

In our newly released whitepaper Foreign F&B Expansion in China, we explore the recent store openings of 32 well-known international F&B brands expanding their presence in China and identify patterns in the market as well as the lessons that can be learned from these retailers. Our key insights include:

• China’s strong consumer sector means F&B remains one of the country’s most active areas of growth.
• While expansion in coastal areas and Tier 1 cities continues, foreign F&B retailers are now more active in lower tier cities though there is risk to entering the less-wealthy provincial capitals.
• Smaller café-format shops selling coffee, tea and ice cream have been a highly active category, expanding quickly at 30 percent y-o-y in 2015
• Regional bias within China is strong among most foreign chains, and they tend to flock to South China.
• Most brands have established a presence in East China, but their demographics indicate that there remains room for them to catch up in this wealthy region.

Given that capturing even a small slice of the market translates into huge absolute volumes, many foreign F&B retailers view the China market with understandable enthusiasm. Yet the road to successfully taking advantage of the China opportunity is a difficult one, as some restaurant chains have discovered too late.

F&B retailers have several critical questions to address before making their move, including: “How fast can I build out and where?” The results of our study offer direction on this and more. Download our report here.

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