Justin Ko, (whom I take to be a student) attached to the Harvard University – Harvard Law School; University of Macau, Faculty of Law has noticed China’s local F&B champions are breaking out.
In more of a monograph than a paper he wonders why and how this is occurring? Unlike with more well established multinational F&B pioneers China’s offerings could not be described as especially ‘aspirational’
Haidilao (hotpot, HK: 06862) and Mixue (tea, HK: 02097) have become big names in Asia now with the latter especially popular in Indonesia and have clearly been able to grow beyond the ‘sinosphere’. Most in the region doesn’t speak Chinese and are not especially interested in Chinese culture. In the way, say, many are with Korea.
Moreover, it can’t be price that’s driving the brands popularity as the two mentioned (and others from China) are neither staples nor daily necessities.The author suggests the ability to tailor to local tastes and a background of already operating at home over a vast geography with very different climates, conventions and preferences must have been helpful.
Other advantages like already operating in a cutthroat market, managing long supply chains and being on top of quality issues will be beneficial. Then, for the profitable ones there’s the benefit of a domestic profits fountain to fund the expansion and undercut locals in the process. Finally, all China operators are digital-natives. App-ordering and accepting payment via multiple platforms is already in their DNA.
The paper concludes noting that it’s unlikely that any of the China F&B operators will be able to replicate domestic China success overseas. \
This probably won’t stop them trying though!
You can read the work in full via the following link Luckinomics: The Global Expansion of Chinese F&B Chains.
Happy Sunday.