Limited-Service Restaurants in Hong Kong, China

PROSPECTS

100% takeaway and delivery on the rise

Due to high outlet rental and labour costs, the number of outlets and sales revenue for 100% takeaway and delivery restaurants grew quickly during the review period. These stores specialise in offering a very limited menu and target busy working professionals, who have only limited time to order and eat.

Product innovation flourishes in health and wellness

The health and wellness trend is widespread across many types of restaurants. Due to the high frequency of dining out, local consumers are increasingly seeking healthier dining options on the street.

Third-party order apps gear towards pick-up model

While Deliveroo, Uber Eats and Foodpanda are the three largest online food order apps providing delivery services in Hong Kong, the high cost of hiring drivers represents a significant burden to profit margins. Emerging players such as Oopsie (founded in 2018) and Plum Food (2017) offer a different business model by providing an online food order app like the aforementioned companies, but requiring consumers to pick-up the order by themselves.

COMPETITIVE LANDSCAPE

More burger chains join premiumisation trend

Under the premiumisation trend, chained burger restaurants such as McDonald’s and Beef & Liberty are capturing broader consumer groups with new products using premium food selection. Followed by the success of The Signature Collection offered by McDonald’s featuring Angus beef in 2017, the brand recently launched a new series under the name of Nicholas Tse, a famous local celebrity.

Traditional Chinese chains innovate and diverge

Two of the largest Chinese fast food giants, Café de Coral and Fairwood, both recorded a healthy same-store growth rate during the review period thanks to continuous strong demand driven by the mass market. Fairwood continues to expand its outlets, providing a well-rounded menu to cater to different consumer groups.

Convenience stores invest in ready-to-drink coffee

The trend of coffee drinking has now spread to 7-Eleven, the largest chained convenience store in Hong Kong. The company recently launched a multimillion-dollar campaign, introducing a premium coffee blend in its 260 Daily Café kiosks.

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