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September 21, 2016

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Home » Opinion » Foreign Views

Eating at home poised to become next big thing for China’s tech-savvy consumers

By Kunal Sinha | September 21, 2016, Wednesday | Print Edition

ONE of the consequences of the explosion in China’s middle-class — which now accounts for 68 percent of the urban population — has been the overwhelming desire amongst families to eat out. By offering convenience and variety, the restaurant business boomed. Last year, the China Cuisine Association reported sales equaling nearly US$500 billion.

As someone who likes to keep an eye on trends both global and local, I’ve picked up some early signs that things are about to change.

The first sign of disruption happened thousands of kilometers away: since last year in the United States, sales at restaurants and bars dropped below food sales at grocery stores for the first time ever. Not just that, prices of food items at grocery stores have dropped by 1.6 percent since last year, while restaurant prices rose by 2.8 percent, according to a report by the US Bureau of Labor Statistics.

Closer to home, we heard our ayi bemoan how her son, who had invested over 300,000 yuan (US$44,922) in opening a restaurant in Anhui Province had to shut it down within three months. He wasn’t simply getting enough customers to generate a profit.

I believe that many Chinese families, and young people are discovering the economic savings, as well as the joy, of eating at home. China’s millennials exhibit some rather unique behavioral traits, one of which is the rise of a homebody culture, popularly called zhai.

Inhabiting an online world, they socialize, play and shop from within the confines of their homes. Consumption that formerly took place outside has how moved indoors. A whole industry has developed to deliver groceries and meals, and is now also bringing chefs into people’s homes.

China’s online food delivery business was worth 45.78 billion yuan last year, and is expected to multiply five times to 245.5 billion yuan by 2018, according to projections by Analysys International.

It isn’t a matter of convenience alone. In Shanghai, Beijing and Hangzhou, you can connect with local chefs on the Hao Chushi (“Good Cook”) app and have them come over to prepare and serve a home-cooked meal. Depending on whether dinner is for the family, or for entertaining guests, the app allows you to choose from six price tiers, starting at 99 yuan for four people, 139 yuan for six, 229 yuan for eight to ten people; all the way up to 689 yuan for 17 guests. There is a choice of cuisines too — Shandong, Guangdong, Sichuan and Hunan — but you are expected to provide all ingredients and kitchen utensils. The service has already attracted nearly 50 million yuan in venture funding.

Not too long ago, the most common way of experimenting with different cuisines was to go to a restaurant. No longer. The runaway popularity of the TV show “A Bite of China” has led to a phenomenal revival of interest in China’s diverse, sometimes hidden, cuisines. This was supported by Taobao vendors, who seemed to have all the ingredients ready to ship right after an episode featuring them was aired.

With pre-packaged ingredients readily available, the barriers for home cooks are tumbling down. This, combined with inspiration from programs such as “MasterChef” — which my family watches together — is a recipe for curious minds.

In our own home, the just-concluded summer vacation offered my own children — aged 13 and 8 — the opportunity to learn baking. One of the promotions Carrefour has been running in its stores in China is to give away MasterChef-branded knives to customers who rack up loyalty points. They are tipping their hat to a growing legion of home cooks. Maybe, the survival strategy for restaurants would be to throw open their kitchens to diners, and allow their chefs to become mentors.

 

Kunal Sinha has over 25 years of unearthing and commenting on consumer and cultural trends. Based in Shanghai for over a decade, he is the author of two books about creativity in business: “China’s Creative Imperative,” and “Raw – Pervasive Creativity in Asia,” and has taught at some of the world’s leading business schools.

Foreign Views


 

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