Chinese slurp up latest on the menu
Western-style restaurants have mushroomed in Chinese cities in
the past two years and Singapore companies are already benefiting
from the growing trend. The last of a five-part series examines
this phenomenon.
By Lee Su Shyan - Jan 26, 2004
The
Straits Times
SINGAPORE-LISTED companies operating in the restaurant and food
services sector are making a killing - in China.
Food groups such as Thai Village Holdings and Apex Pal are taking
rapid strides in a market that has been growing at a 15-per-cent
annual rate since 1998, nearly doubling from US$33 billion (S$56.7
billion) to an estimated US$60.4 billion in 2002.
In the past two years alone, anecdotal evidence shows that more
than 200 Western-style restaurants have opened in Shanghai, and
a similar number in Beijing.
A TASTE FOR EATING OUT
Apex-Pal
- Opened one Sakae Sushi outlet in Beijing last month, with
plans for two more there. An outlet is also set to open
in Shanghai
- Scouting for possibilities in other major cities
In future, it is likely that China will contribute a large
part to our numbers as it is one of the largest emerging markets.
The restaurant scene in China is a lot more vibrant. Even
in run-down places, you can find good restaurants.
Many people who have gone overseas to study have come
back and set up new concept restaurants.'
- CEO Douglas Foo |
That's just one sign that the Chinese - whose country managed to
post 8-per-cent GDP growth every year this new century - have a
lot of spending power.
PROOF OF THE PUDDING
ONE factor that has helped the industry is that banquets have
become a standard feature of business and government relationships
these days, market players say.
At the same time, in the main cities, white-collar workers are
increasingly dining out.
Another plus point is the upcoming 2008 Olympics, which is expected
to propel the upscale restaurant market forward.
For example, the State Tourism Bureau has announced a 200-billion
yuan (S$42-billion) budget for new facilities and services ahead
of the Beijing Olympics.
But more than anything else, observers say that more and more people
are eating out because that is seen as the best way to proclaim
one's status in society.
Says Thai Village chairman and managing director Lee Tong Soon:
'People are getting richer now. In the Jiangsu and Zhejiang region,
there are many privately-owned enterprises.'
And 'the trend now is to take a guest to the restaurant and buy
him a bowl of sharks' fin. It is a delicacy so they look upon it
as a status symbol'.
Sesdaq-listed Thai Village can charge up to 30 per cent more for
its sharks' fin in its China restaurants than in Singapore.
Thai Village benefits from the higher food prices and also from
the copious amounts of alcohol the Chinese drink at dinners, Mr
Lee said.
Thai Village owns and operates seven outlets in China and has another
14 franchised outlets which sell its trademark sharks' fin dishes.
Sixty per cent of its revenue comes from China, but he sees it
going up even more with time.
Meanwhile, Apex-Pal - the food group behind the Sakae Sushi chain
- has opened a franchised outlet in Beijing with plans for another
two there and one in Shanghai soon.
'The Chinese are very open to trying new tastes. They like new
things from Singapore, from the West,' says its chief executive
Douglas Foo.
Echoing Mr Lee's views, Mr Foo said: 'People generally like Japanese
food as it's healthy and perceived to be an expensive food. It's
enjoying something that is more high class.'
Apex Pal targets those between the ages of 20 and 35 as its customers,
principally because this segment enjoys 'better living and better
food'. And Sakae Sushi benefits because 'they spend a lot of time
outside the home, it's a social thing, they want to go to clubs
and want to be 'cool'
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