2012-09-14 12:49:19 - Chinese home delivery market boost benefiting McDonalds
The Chinese home delivery market recorded healthy value growth in 2011, to reach a market value of RMB144 million, however, the rate of growth was significantly lower than in 2010.The main reason for the slower performance was the reduced rate of opening new outlets. Only eight establishments were opened in 2011, while the figure stood at 25 and 19 in 2009 and 2010 respectively.Home delivery saw fierce competition from full-service restaurants and fast food operators, and even chained convenience stores providing ready meal products. Other types of restaurant launched home delivery services, which took some share from 100% home delivery players.Pizza Hut Express, operated by Yum! Restaurants China, is a dominant player in the Chinese home delivery market, with a
value share of almost 93% in 2011. The company had 135 outlets in 13 cities across the country by the end of the year. In 2011 the company put a strong focus on new launches and promotional activities. In addition, the company continued to expand its delivery service in second tier cities in order to boost sales.McDonalds and KFC are two companies thriving thanks to the growth in the Chinese home delivery market. Delivery is becoming an important part of the growth strategy at McDonald´s Corp. and Yum Brands Inc.´s KFC chain in parts of the world where cities are too crowded and real estate costs too high to justify building drive-throughs.In cities like Beijing, Seoul and Cairo, armies of motorbike delivery drivers outfitted in colorful uniforms and bearing food in specially designed boxes strapped to their backs make their way through bustling traffic to deliver Big Macs and buckets of chicken wings.McDonald´s Asia/Pacific, Middle East and Africa division, which accounts for more than a fifth of the company´s revenue and showed same-store sales growth of 8.1% in November, is planning to add delivery service to many of the new restaurants it builds.Growth is expected to remain active to 2016, with an outlet volume compound annual growth rate (CAGR) of 10% and a constant value CAGR of 12%. However, growth rates are expected to slow down compared with the 2006-2011.The Chinese home delivery market will continue to record double-digit growth through to 2016, with sales driven by the on-going expansion of chained pizza home delivery operators. Growth in demand for convenience is expected to support home delivery operators.For more information on the Chinese home delivery market, see the latest research: Chinese Home Delivery Market ReportFollow us on Twitter @CandMResearch
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