New CGA research in China provides crucial insights into a market that is ahead of the UK on its recovery curve—and shows there is light at the end of the tunnel of COVID-19 for hospitality businesses.

The China On-Premise User research shows nine in ten consumers have now returned to bars, restaurants and KTVs (karaoke bars)—a steady rise from the half (48%) who went back in the weeks after lockdown ended in May.

While the pandemic has reduced disposable income for half (50%) of consumers in China, on-premise users have been drinking out as frequently as they did before COVID-19, though the frequency of eating-out visits has fallen. Two in five (42%) consumers plan to visit more often in 2021 than they did in 2019.

Although safety concerns remain, consumers have settled into a ‘new normal’ behaviour with a renewed appreciation of the value of bars and restaurants and fresh attitudes towards issues like health and alcohol consumption. The changes highlight the need for operators and suppliers to deepen their understanding of consumers’ needs as countries emerge from lockdown.

The research has a host more insights about the evolved habits of consumers in China that can help businesses refine their strategies, including:

  • Polarisation. Many returning consumers are making up for lost visits by trading up and increasing spend, but others are keeping a close eye on spending. With similar numbers saying they will spend more (41%) and spend less (33%), the market has polarised and brought challenges for brands playing in the middle ground.
  • Increased expectations. After months when safety was the primary concern, guests now expect more from their experiences, while nearly three quarters (72%) say their drinks choice is influenced by the desire to impress others. This makes it crucial to optimise drinks ranges.
  • Focus on health. COVID-19 may have made consumers more health conscious than ever before. Three in five (59%) say healthy drinks choices are more important to them than pre-COVID—and that opens up a big market for low-calorie, low-sugar and nutritional drinks.
  • Delivery here to stay. As in other countries, delivery and takeaway markets boomed during China’s lockdown—and those habits are here to stay. That challenges operators and suppliers to pivot brands for the in-home as well as eat-out market.
  • Late-night recovery. While concern about crowded venues lingers, confidence about visiting big venues and events has grown. Two thirds (64%) of consumers are now confident enough to visit large-capacity venues, and nearly half (47%) have visited KTVs—a positive sign for the UK’s own late-night sector.

Having emerged from COVID-19, China is now rebuilding its eating and drinking-out economy. But attitudes and behaviours have changed significantly in the wake of the pandemic. To understand more about the Chinese on-premise and consumer behaviour in this unique market, please contact managing director EMEA & APAC, Graeme Loudon at graeme.loudon@cga.co.uk, or leave us your details we we'll be in touch with further information.

     

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