| | Exploring New Opportunities in Macao’s Food and Beverage Industry to Guide Upgrading and Transformation of Enterprises As the saying goes, “Food is the most basic necessity of the people”, the food and beverage (F&B) industry plays a decisive role in a prospering economy, enhancing consumption and promoting market development. The upstream and downstream of the traditional industrial chain of the F&B industry are catering enterprises and consumers respectively. With the continuous updating of consumption scenarios, changes in supply and demand have brought new development opportunities to different segments of the F&B industry, and food delivery platforms are the important carriers connecting the different segments. Under the wave of big data, food delivery platforms have a huge advantage in website traffic. Generally speaking, traffic is divided into public traffic and private traffic. The essential difference between the two is that the property right of public traffic belongs to third-party food delivery platforms, while that of private traffic to catering enterprises. Different to public traffic, catering enterprises can analyse data of private traffic according to their own needs, so as to formulate business strategies to acquire repeat customers, and seize the initiative of the market. | |
| | | Macao, as the “Creative City of Gastronomy”, has a variety of catering enterprises. Driven by economic recovery, various tourism events and festivals have been staged in Macao one after the other. Investors expect that such visitor arrivals will sustainably boost the development of Macao’s F&B industry. Therefore, starting up business in Macao through the Investor’s “One-stop” Service and the Investment Committee’s cross-departmental co-operation mechanism of IPIM will help explore more opportunities and development space. In addition, the “healing economy” has also become a new economic phenomenon that can bring new growth momentum to the F&B industry. For example, the rise of low-sugar and ketogenic diets in Macao’s bakery industry reflects the market demand and concern for healthy diets and special diets. In view of this development trend, we invite brand founders to share their insights into business operations. In a word, the F&B industry is ushering in a new era, and catering enterprises are taking proactive steps to start a new chapter. | |
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| Managing “Private Traffic” and Taking Initiative The “lazy economy” boosts the rapid development of the food delivery industry, and enables catering enterprises, major food delivery platforms and consumers to jointly string together the whole industrial chain of the F&B industry. Major food delivery platforms in the middle range can provide not only a wide customer base for upstream catering enterprises, but also front-end recommendation rankings for downstream consumers. For this reason, major food delivery platforms have inherent advantages in public traffic. |
| | | The “public traffic” refers to the collectively shared data that all catering enterprises obtain according to the rules of major food delivery platforms. Catering enterprises using major food delivery platforms must effectively facilitate consumers’ transactions to reduce the cost of obtaining public traffic. As the property right of public traffic belongs to major food delivery platforms, catering enterprises cannot directly use the data generated by public traffic to accurately analyse market trends and development. Therefore, catering enterprises can shift their resources from public traffic to private traffic. The “private traffic” refers to brand-operated data that catering enterprises obtain according to their own needs. Specifically, catering enterprises have invested their operating costs in mini apps and official accounts to gradually attract consumers’ secondary consumption by building private traffic platforms. After accumulating a large enough number of users, the platforms can open to other seller enterprises to achieve the multi-role use of consumers, seller enterprises and food delivery platforms. Compared to public traffic, private traffic is more stable and controllable for sellers, which is the key to helping catering enterprises acquire repeat customers. |
| | | Moreover, catering enterprises can tailor and launch cross-industry marketing campaigns for different consumer groups, creating a fresh experience for consumers and eliciting deeply-held brand associations, and exchange each other’s own private traffic pools, thus covering more consumer groups. Recently, a famous sauce-flavoured Daqu baijiu brand and a well-known coffee chain jointly rolled out a sauce-flavoured latte, which went viral quickly and topped the trend charts of social networks. This cross-industry marketing campaign has helped the baijiu brand reach young customers of the coffee brand, and also enabled the coffee brand to interact with high-end customers of the former. The move has successfully brought new vitality to the private traffic of both enterprises. As we can see, by enhancing the appeal of brands in different consumption groups, the short-term co-branded traffic is converted into users’ viscosity to brands, thus realising the long-term release of brand energy. |
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| | Seeking Innovative Market Models Based on Macao’s F&B Industry By the Haojiang River, you can enjoy the ancient and modern stories, and taste Chinese and foreign delicacies. Dubbed as the Creative City of Gastronomy designated by UNESCO, Macao’s cuisine has become a vivid model for exchanges and mutual learning between Eastern and Western civilizations, and harmonious integration of diverse cultures. Tea restaurants and Portuguese native cuisine with Macao characteristics were born in the fusion of Chinese and Western F&B cultures, while congee, noodles, snacks and Cantonese Yum Cha in the “offshore catch-and-eat” Dan food culture have become the foundation of traditional Chinese cuisine. It can be seen from Figure 1 that the top three in terms of the number of catering enterprises in Macao between 2019 and 2021 were tea restaurants and congee & noodle houses, Chinese-style hotel restaurants, and Western-style restaurants. |
| | Source: Statistics and Census Service Note: Data of street food stalls not applicable. Under the wave of capital involvement and technological penetration, the F&B industry not only relies on the attractive appearance of food as well as aroma and taste to attract customers, but also endeavours to appeal to a wider customer base by providing better experience of sales channels. As consumers’ eating behaviour changes substantially, home consumption scenarios increase. The F&B industry has officially entered a new era of breaking through restaurants with retail products. In order to assist catering enterprises in digital management, the Macao SAR government launched the “Back Office Electronic Funding Scheme for the Food and Beverage Industry of Macao” in 2021 and 2022 to help enterprises install or update their F&B back office electronic system to co-ordinate online and offline market needs as well as facilitate their business development. Through the back office electronic system, catering enterprises can achieve more effective order management and inventory control. The system can record and track the details of each order, including dish selection, special requirements and payment methods, hence provide a personalised experience that allows consumers to pay a premium for a quality service. |
| | It is worth noting that a malfunction might occur in the back-office system in specific scenarios. For example, consumers may hoard and snap up goods due to potential unexpected events. This pattern of consumer behaviour can often be viewed as emotional healing, that is, stockpiling and snapping up reduce the stress and anxiety of modern life. In this context, the “healing economy” has become a new economic phenomenon that can bring new growth momentum to the F&B industry. Emotional eating in the healing economy has attracted industry attention. On the one hand, emotional eating can uplift consumers’ mood by focusing on pleasure from the perspective of “sensibility”; on the other hand, emotional eating can improve their health with herbal ingredients added from the perspective of “rationality”. Enterprises can use data analysis and forecasting technologies to think about the emotional needs of target customer groups and adjust inventory levels, in an effort to address supply chain pressures and inventory management challenges. |
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| | Known as the Creative City of Gastronomy, Macao further expands and better develops its F&B industry, providing the driving force to sustain the future development of this industry. In recent years, the low-sugar and ketogenic diet trends have emerged in Macao’s bakery industry. This development trend reflects the public’s demand for and concern about healthy diets and special diets. The homogeneity and competition of similar products in the market are becoming more obvious. Those who intend to engage in the F&B industry should first understand the demand trend of the target market, identify target groups, and develop products that meet the core needs of consumers, so as to stand out in the fiercely competitive market. In this issue, we interviewed a Macao bakery featuring low sugar and ketogenesis to analyse its business methods before and after the COVID-19 pandemic: |
| Enterprise profile: Se Tong Co. Ltd. was established in 2018. The brand founder is a former nurse with expertise and professional understanding of the impact of sugar on the human body. The enterprise mainly sells low-sugar and ketogenic desserts, bread, snacks and natural sugar substitutes, with its target groups being individuals who pay special attention to fat reduction and blood glucose control, pursue health and fitness. The enterprise has about 15 employees. |
| | Business Insights: - Publicity channels: In addition to social media such as WeChat and Facebook, you can also join food delivery platforms in response to the change of the consumption pattern, make word-of-mouth publicity through online comments and so on, and actively join industrial associations to obtain the relevant authentication.
- Business model: All branches have food produced at a central kitchen. This model can save rent, human resources and other expenses, and ensure a centralised supply with stable production for brands to continuously expand retail outlets in the future.
- Purchasing method: For commonly-used ingredients, efforts are made to actively seek affordable raw material wholesale suppliers, thus reducing the costs of wholesale and agency. However, purchasing directly from manufacturers generally requires a large volume. Therefore, it is necessary to regularly evaluate sales and profitability, raw material consumption and costs, and properly adjust the procurement and distribution strategies in due course.
- Business expansion: For expanding business outside Macao, enterprises need to assess their current situation and consider the advantages and disadvantages of business expansion for themselves, including transportation costs, and customs declaration. For enterprises of a specific type or size, it is more profitable to make wise use of the B2B business negotiation model than the B2C sales model.
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| | In line with the major development positioning of Macao as a World Centre of Tourism and Leisure and the “1+4” appropriate diversified development strategy, Macao has adopted a government-led and market-orientated model to continuously explore the innovative pattern of “Tourism+”, further promote cross-sectoral integration of tourism, delicacies, big health, technology, events, among others, improve tourism service facilities, as well as facilitate the qualitative development of integrated tourism and leisure enterprises that provides the “food, accommodation, transportation, sightseeing, shopping and recreation” packages. Since the designation as the “Creative City of Gastronomy” by UNESCO in 2017, Macao has been providing visitors with a food experience of rich and diverse delicacies. As the visitor arrivals to Macao surge in 2023, visitors are introduced to local communities for consumption, the turnover of F&B establishments are expected to increase accordingly. Looking ahead to the second half of the year, Macao will gradually hold a variety of MICE events, tourism events, and festival activities, so that the increasing visitor arrivals will sustain the development of Macao’s catering industry. Foreign investors remain upbeat about the future opportunities in the catering industry in Macao, and this issue will tell the story of another enterprise’s start-up in Macao through the IPIM services. |
| Enterprise Name: Macau Yakiniku Service Usage: Investor’s “One-stop” Service and the Investment Committee’s cross-departmental co-operation mechanism Service Content: Provide whole-process follow-ups, including company incorporation, licence application, procedures for recruiting local workers and importing non-resident workers. The enterprise has successfully obtained the licence for food and beverage establishments issued by the Municipal Affairs Bureau (IAM) and officially put into operation. |
| | According to the Statistics and Census Service (DSEC), the turnover of F&B outlets in June 2023 doubled year on year, with significant increase in Western-style restaurants (+1.6 times), Chinese-style hotel restaurants (+1.5 times), and tea restaurants and congee & noodle houses (+90.1%). Macu Yakiniku is a grilled meat restaurant designed to attract young consumers. Covering 11,000 square feet, it can accommodate 148 customers. The enterprise is funded by Macao and Hong Kong investors who are optimistic about Macao as a destination for tourism and MICE with a large number of tourists and high-quality customer groups such as MICE trade visitors. The restaurant, which offers high-quality Japanese grilled meat, caters to the characteristics and the needs of the market. For investors unfamiliar with Macao’s administrative procedures, it is the most convenient way to speed up the start-up and operation of enterprises by providing whole-process follow-ups through the Investor’s “One-stop” Service of IPIM, such as licence application. |
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Macao Trade and Investment Promotion Institute Address: 1/F and 2/F of the office building of the Complex of Commerce and Trade Co-operation Platform for China and Portuguese-speaking Countries in Rua Sul de Entre Lagos, Macao Website: https://www.ipim.gov.mo E-mail: ipim@ipim.gov.mo Tele: (853) 2871 0300 Fax: (853) 2859 0309 © copyright 2023 IPIM.All rights reserved (Disclaimer) If you want to stop receiving these emails, please click here to unsubscribe. |
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