China's Fast-Food Industry: Foreign Franchisers Influence Industry Development

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After nearly a decade of strong revenue growth, the Fast-Food Restaurant industry in China shows no signs of stopping, according to IBISWorld, America’s largest publisher of industry research. Fast-food revenue in China is forecast to increase by an average annualized 14.5% to reach US$147.0 billion in 2016. Growth in the number of Chinese enterprises is expected to slow considerably, however, due to increasing competition and expected saturation in the most developed markets.

IBISWorld Market Research

IBISWorld Market Research

Western-style fast-food outlets are growing much faster than Chinese-style outlets, in terms of operating revenue and network establishment numbers.

After nearly a decade of strong revenue growth, the Fast-Food Restaurant industry in China shows no signs of stopping, according to IBISWorld, America’s largest publisher of industry research. Fast-food revenue in China is forecast to increase by an average annualized 14.5% to reach US$147.0 billion in 2016. Growth in the number of Chinese enterprises is expected to slow considerably, however, due to increasing competition and expected saturation in the most developed markets.

Lifestyle changes and reduced leisure time have contributed to consumers shifting from eating in traditional full-service restaurants toward eating in fast-food restaurants. Increased Western influences in China and higher incomes have seen increased demand for fast-food. Western-style fast-food outlets are growing much faster than Chinese-style outlets, in terms of operating revenue and network establishment numbers. With the rapid development of fast-food service providers and new brands and food styles, industry growth has been very strong in the past decade.

IBISWorld estimates that the Fast-food Restaurant industry in China will generate revenue of US$74.8 billion in 2011, up 16.0% from 2010. This is slower growth than in 2010, due to the curbed inflationary levels. Fast-food restaurants are forecast to spend an estimated US$11.5 billion in wages in 2011.

IBISWorld estimates that there will be nearly 2.0 million establishments operating in the industry in 2011, including franchise and chain operators of all sizes and independent Chinese-style fast-food facilities throughout the country.

In 2010, China's economy gradually recovered from the global recession and food prices increased rapidly under the rising inflationary level, resulting in revenue growth of 17.0%.

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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Jordan Ho
IBISWorld
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