As global markets have continued to evolve, one region has stood out as an increasingly significant player in the food industry: Southern China.
With its burgeoning consumer base, rapidly expanding food sector, and evolving market dynamics, this region has attracted the attention of local and international stakeholders.
From its catering industry to its food manufacturing and raw material supply, Southern China has become one of the most promising and lucrative markets for food-related businesses worldwide.
Southern China has demonstrated resilience in recent years despite setbacks like the global pandemic. The region’s food market size has been substantial, and its ongoing growth underscored the emerging potential.
In 2022, Guangdong's catering revenue reached RMB 455.6 billion. Despite a minor decline due to the pandemic, the recovery trajectory has been clear. This highlighted a significant rebound, particularly with innovative food models such as prefabricated food and new consumer trends driving demand.
Notably, in 2022, Guangdong’s catering revenue accounted for over ten percent of the national total, an impressive figure considering the global challenges the food industry faces.
Further adding to the region's momentum, Guangdong's food and beverage manufacturing market reached RMB 841.3 billion in 2022. Growth rates in various segments, such as wine, beverages, and food manufacturing, show substantial promise.
While the impact of the pandemic was felt in regions like Hong Kong and Macao, their food and beverage manufacturing sectors still showed notable growth and are projected to continue their recovery in 2023.
One of the most remarkable aspects of the Southern China food market was the emerging consumer trends.
The Gen Z demographic in Southern China has redefined consumption patterns. These young consumers have been particularly keen on experiences, quality, and sophistication—traits shaping the catering and food industries profoundly.
Their preference for freshness, premium products, and new dining experiences opened up new avenues for international food brands to enter the market and establish a foothold.
Another key driver was the rise of synthetic biological materials and innovative packaging. As national policies push for low-carbon packaging solutions and companies explore alternatives like plant-based PET bottles and cellulose protective coatings, there has been ample room for innovation. This evolution in packaging technology is expected to play a pivotal role in the food industry, allowing companies to cater to environmental and consumer preferences for sustainable products.
Southern China’s food market is highly competitive, with various players across several catering segments—brands like Mixue Ice Cream and Tea and YH.TANG have dominated the fresh-made tea drink segment.
Coffee chains like Luckin Coffee have also grown in market share, although they still lag behind global players like Starbucks in urban penetration.
With a core price range of RMB 90 - 110, the hot pot segment remained a staple in Southern China, with Haidilao maintaining a high urban penetration. Similarly, local cuisine, especially Yunnan Crossbridge Rice Noodles, has grown significantly.
Brands like Mengziyuan and KFC have continued to compete in this dynamic segment, where price sensitivity and consumer convenience are key.
Retail channels also experienced rapid changes, with convenience stores and supermarkets continuing to thrive while specialised centralised stores gained ground.
The rise of snack shops in county-tier markets has been another critical trend, driven by improved infrastructure and logistics, allowing for higher turnover and more affordable consumer pricing.
Several companies have been at the forefront of this transformation, with Jiumaojiu Group, Guangzhou Restaurant, and Eastroc Beverage leading.
Southern China’s expanding food market has offered many opportunities for international players. Navigating this complex landscape requires understanding consumer behaviour and local competition.
Businesses looking to expand into Southern China will find a market full of untapped potential and dynamic competition, making it one of the most critical regions to watch in the coming years.
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