I came across an interesting research piece this week  from global advertising agency, Y&R, about the new young Chinese consumer in Tier 1 and Tier 2 cities.  (Chinese Whispers (Y&R) 2013)  If true, there are some significant implications for restaurant chains that are doing business in these markets.

Y&R found 5 key trends.  First, 61% of the respondents are happy and want to slow down and keep things the way they are now.  They want a break from all the rapid change  Second, they want to stay home and enjoy time with family and friends.  Third, they place more value on earning money then just inheriting it. Fourth, they are looking for an adventure not just a boring experience.  Fifth and final trend – they want to get close to their brands and want a down to earth relationship with them.  They do not want to be shouted to but like to be whispered to.  Education about the brand is key.

The implications for restaurant chains are clear to me.

(1) “Delivery” will become an even bigger part of the business.  Our projects in China all suggest that the delivery business is Tier 1 & Tier 2 cities are growing rapidly, not just for Pizza Hut, McDonald’s and KFC but for Chinese restaurants as well.  All Chinese QSR chains are now ramping up for delivery in trade areas where there is demand.  New delivery and call center services are available at affordable prices compared to 5 years ago. In short, consumers want convenience.  Do you have a “delivery” strategy?

(2) “Take-away” meals will also boom. Both parents usually work and nobody is around to cook.  Looks to me like a great opportunity for a Chinese food version of Marks & Spencer mini-markets you see all over London.

(3) The customer experience will become even more crucial to keep customer loyalty.  Are you tracking customer loyalty?  Are you using technology to make the customer experience better and train your workforce?  Great customer experience leads to great word of mouth which is the greatest whisper marketing there is!

(4) Finally, how much information are you providing your customer about the ingredients you are using?   Chipotle  in the USA with their focus on sustainable agriculture is a great example of this. I have not seen anything similar in China.  Where does your beef come from?  Where are the vegetables grown?  Organic or natural?  What separates you from your competitors?

Are you prepared for this new young Chinese consumer?






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