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China is one of the largest countries in the world with an area of about 9.6 million square kilometers, which comprises about 6.5 per cent of the world’s total land area. China has more than 5,000 years of history and a population close to 1.4 billion. This accounts for 23 per cent of the world’s population. With a consumer population this large, this Eastern giant will become the number one marketplace in the world.
The size of the Chinese economy is likely to climb in the world rankings from its current position as the sixth largest to the second largest by 2030, said economists with global investment bank Lehman Brothers. There are a multitude of trade and investment opportunities for exporters here. China’s real gross domestic product (GDP) has grown 8.0, 9.3 and 9.5 percent over the past three years, according to the World Bank. China’s GDP ranks second in the world only to the United States. The current Chinese pizza market is close to one billion (U.S. dollars). “Pizza” is a new word in the Chinese dictionary, with Pizza Hut being the first restaurant chain to introduce pizza in China in 1990. Today, Pizza Hut is the number one casual dining brand there with 201 stores located in more than 40 cities in mainland China. I was born and raised in China. If you go back 20 years, pizza could be found only at luxurious hotels and expensive Western restaurants. The only things we knew about pizza was: Pizza was a type of Italian food and we sometimes saw it on TV. I still remember my first pizza eating experience when I was a student in college in Tianjing in 1996. At that time, Pizza Hut was the newest and most well-known restaurant in that city. Their price was expensive compared to the Chinese standard income, but for occasional events it was still affordable. There was a long line snaking around at the Tianjing Pizza Hut every day. Even now, with so many stores, the waiting line is still just as long as it was 10 years ago. It is amazing just how much the pizza business has grown in China. “China is an opportunity that can’t be ignored. The consequences would be ignoring one of the highest growth opportunities in the history of business. You do the math…with the number of people and the rapid growth in the economy, there is an opportunity to really make a lot of money,” says David McIntyre (CEO of YUM) in an article for USA TODAY. Papa John’s Pizza is another world pizza chain in China. They opened their first store in Shanghai on October 2003. Even though they were not the first restaurant, they are moving swiftly to grab a much bigger slice of a market now dominated by Pizza Hut. Papa John’s Pizza has 20 stores now and plan to open 40 restaurants by the end of next year in China and as many as 250 within the next five years. “China is going to be the best market in the world for the next 20 years,” said founder John Schnatter, CEO of Papa John’s Pizza. California Pizza Kitchen just opened their first restaurant in Shanghai in July 2005. China has almost 1.4 billion people, 500 million live in city and urban areas and half of the population is younger than 29. The Chinese Family Plan has been a very important government policy since late 1970’s. The future of a new generation becomes the number one concern in their families. They were well educated and open-minded. They like to try new things and like to chase a Western living style. College students, office workers and businessmen between age 17 and 35 are the main consumers for the Chinese pizza market. The children are another important consumers group as well with the taste and choice of family dining lead by the children. Influencing their eating habits is a way to get a lifetime customer while creating additional consumers within the family group as well. Western culture has been very accepted by the youth in China, and China’s fast food market is being spurred by a growing taste for Western style food. Beijing and Shanghai are the national economic centers and biggest international cities in China. They are the most popular and a target for the launching of pizza shops by business operators. FHC 2005, China’s leading international food & hospitality trade event, took place at the Shanghai New International Expo Centre in Pudong. First time exhibitor with the Canadian pavilion, Davinci Foods, had a great outing at FHC 2005. “This has surpassed our expectations! We cooked and demonstrated over 30 cases of different types of pizzas and they were so well received,” shared Mr. McGraw who is in charge of DaVinci’s business development in China. “We spoke to distributors, chain stores, catering companies, restaurants and all of them sampled our products. We are convinced China is ready for DaVinci Pizza now.” (Source from FHC 2005) Beijing, China will host the 2008 summer Olympics. China and the world will be bound closer together than ever. This event will deliver a powerful business opportunity for world pizza industry. The journey begins here; it’s a journey toward unbounded opportunities, toward the best economic and most promising marketplace in the world. China provides us with a huge opportunity for growth and restaurant development. It also brings the best chance for a global pizza industry such as food distributor, equipment supplier and pizza operators etc. We are going to share our China market study with you in future PMQ issues, which includes resources, marketing, government policy, the Chinese culture and eating habits. We also will introduce to you these successful pizza operators in China. To learn more about the Chinese pizza market, please contact PMQ China Dept. at weihua@pmq.com . Visit PMQ China at www.pmq.cn. A sponsorship opportunity for PMQ China is also available; please go to www.pizzamagazine.com for details. – PMQ – |