FOCUS: China franchise market

More documents

Recommendations

Info

Franchise Sectors Food. Demand for higher quality imported food is on the rise due to consumer economics and recent food scares. There is a trend of specialty import shops opening and supermarkets are looking to differentiate themselves by offering a wider range of imported foods. In addition, Chinese consumers perceive international brands as higher quality products and the status of eating imported food outwardly portrays a certain level of lifestyle. Food Forward Trends 2014 reports that 42% of Chinese consumers shop at specialty foreign supermarkets, confirming that consumers are open to trying new foreign foods. Consumers are more knowledgeable than before and better quality produce or ingredients are held in high regard. This has resulted in a marked rise in organic foods and produce with advertised provenance. Global foods are expected to have a big impact in lower tier cities as consumers are exposed to new products and their tastes adapt. Mintel expects higher premium goods to lead the growth in this sector but other global foods such as cheese, pasta, sweet bakery and bread products have grown at a rate of over 30% from 2008 to 2013. In summary, the general trend for success is for foreign foods that have high quality ingredients and are authentic to their countries of origin. Ready-meals are another interesting food sector worth a quick mention. Very much an emerging sector it is difficult to predict the future growth. The base consumer trend is there and the change in retailers, particularly convenience stores who now offer a range of ready-meals, would support the trend but has to be balanced against the Chinese culture which has little experience of ready-meals and value cooking at home. Assuming the market follows the pattern in other countries combined with purchase drivers of lack of time and the need for convenience, this sector will flourish. To reduce the risks of this emerging market make sure a qualified franchise consultant is employed.
Location, Location Where to open your China franchise. Similiar to our article on choosing a region in Japan, for China it may be wise to view Tier 2 and 3 cities as the best option to open the first store. The reasons for this assumption are as follows: City and consumer growth potential. A workable infrastructure. Lower real estate costs. Available human resources at a lower wage. Lower competition. Increased customer lifetime value. These are all important factors but the primary opportunity to create a well-respected brand and tie in consumers from an early stage means these cities have superior market potential. Being such an large country you would expect diversity across regions. These diverse regional markets make franchise development a more meticulous task. It is rare to offer a whole country agreement to one regional SME company as their expertise are honed to their area. A better way The better strategy is to find experienced partners within each region or a large domestic player-your golden goose! This does require more time to control multiple licenses but do not lose the fact that the size of each regional market can bring in more profit than the total of your domestic market, so it is well worth the extra effort to guarantee your products are correct for each step of your China expansion. Basically, be open-minded and flexible, do not be afraid to rotate or change products rapidly in the early stages if they are not doing well. When choosing location bear in mind: China has been proactive in removing tariff and non-tariff barriers through regional free trade agreements. The Government’s inward investment incentives and Shanghai’s Free-Trade Zone.
Page 1 and 2: Franchisemeets.com Think Life. Thin
Page 3 and 4: China Market Overview of the Market
Page 5 and 6: China Market Finding a China Partne
Page 7 and 8: China Market Franchise Law. In conn
Page 9: Franchise Sectors Overview. Althoug

FOCUS: China franchise market

Create successful ePaper yourself

Delete template?

Save as template?