With more and more Hong Kongers spending their holidays across the border to Mainland China, many Chinese restaurants have become a big hit among the locals. These popular brands, such as Tai Er Chinese Sauerkraut Fish, HaiDiLao Hotpot, HEYTEA have seized the opportunity to extend the reach of their brands to Hong Kong, hoping to leverage the city’s distinctive edge of “strong support of the motherland and being closely connected to the world” to enter international market. Undoubtedly, the emergence of mainland brands will intensify competition in the local F&B market. Yet, the growth of the Hong Kong F&B industry has remained subdued in recent years since the pandemic. Such a challenging business landscape has led some small-and-medium restaurants in Hong Kong to closure due to high operational costs and rents. While many industry professionals are concerned about the increasingly fierce competition, some believe that healthy competition may drive innovation and improvement in the Hong Kong F&B industry. In face of all these challenges, how can the local F&B industry maintain its competitiveness?
Avoid Cut-Throat Price Competition
The costs of opening and running a restaurant are significantly high when compared to mainland China due to high wages and soaring rents. It is therefore unwise for the F&B owners to attract consumers by solely relying on continuous price-cutting approaches. Unlike the retail sector, restaurants cannot effectively apply “a small profit margin and sell more” strategy. In fact, such a strategy may pose greater risks in the long run, as restaurants may need to lower the quality of their food and services in order to reduce the operational costs for sustaining their businesses, which may eventually result in a financial loss. Such an approach may not only tarnish the reputation of the brand, but also lower competitiveness. Instead, the local F&B industry should develop cost-effective strategies and prioritize improving the quality of their offerings. By focusing on improving food quality and service standards with strengthened cost monitoring, restaurants can cultivate a strong brand image and reputation, thereby attracting and retaining loyal customers.
Enhance Operational Efficiency via Digitalization
To develop cost-effective strategies for enhancing operational efficiency, F&B owners should actively engage in the digital transformation trend by implementing various systems to reduce manual operations and strengthen cost control. Some local researchers have suggested the F&B industry adopting an electronic ordering system to replace traditional manual methods. This transformation can not only increase ordering efficiency but also enhance customer experience while minimizing labour cost and reducing workload for frontline staff. On the other hand, it is beneficial for restaurants to adopt a POS system for recording daily sales data, as well as to implement a food procurement and inventory management system specifically designed for the F&B industry like FOODIVAL to effectively manage relevant data. FOODIVAL can assist F&B owners in implementing systematic procurement and inventory management with its comprehensive functionalities and user-friendly interface design. It can not only help enhance the control over procurement costs, but also monitor actual business performance, including procurement costs, food costs, menu analysis and more, ultimately facilitating data-driven decision making and the formulation of more targeted operational strategies.
Attract Consumers with Innovations
Keeping abreast of the latest F&B market trends and consumer preferences can help F&B owners generate innovative ideas and improve their offerings, satisfying the ever-changing market demands. According to recent F&B trend research, many research institutes have pointed out that consumers will pay more attention to personalized dining experiences, fusion cuisines and local elements. It is crucial for the F&B industry to catch up with the trends by creating innovative cuisines that blend local and international features, providing a more diverse and customized favours to their customers for cultivating a stronger brand image.
In fact, while many Chinese F&B brands have actively expanded in Hong Kong in recent years, numerous brands have underestimated the costs and challenges of running a business there. Last year, some once-popular Chinese F&B brands announced their decision of closing their branches and restructuring their businesses in Hong Kong. For instance, “LMM Perfume Lemon Tea” in Mong Kok is one such example. Therefore, whether Chinese F&B brands can establish and stabilize their operations in Hong Kong still remains to be seen. Yet, the positive competition that Chinese F&B brands bring to Hong Kong's F&B industry is undeniable.
If you aim to optimize your restaurant's performance through improved procurement and inventory management, along with effective cost control strategies to boost overall competitiveness, we invite you to reach out to our system experts and reserve a complimentary consultation to explore the latest functionalities of FOODIVAL!
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