Haidilao and many other Chinese catering companies are launching ‘half-cooked’ food products amid the coronavirus outbreak. Will this be a new opportunity or just a flash in the pan?
A nation-wide campaign of ‘cooking at home’ triggered by the epidemic in China has brought the half-cooked food into the spotlight.
Kaifanle is a ‘ready to eat’ series of products, including 12 dishes and four kinds of soup. The ingredients have been processed and cooked in advance so that consumers can enjoy the meal after heating (most of the time, stir-frying) for three to five minutes. The products contain meals for one and meals for multiple people, priced between CNY 36 to CNY 125.
At present, the products are only for sale in Beijing. With more workers on Haidilao’s supply chain returning to work, their offerings will shortly be available in cities such as Shenzhen, Guangzhou, Shanghai and Xi’an.
The sudden rise of the half-cooked meal during the epidemic season unlocked a surprising surge of sales for many catering companies. Jin Ding Xuan (金鼎轩), a Beijing-based chain restaurant, saw a 300% jump in its online sales of half-cooked dishes in February, soaring over the previous month, scoring nearly 30 times higher than the same period last year.
“During the coronavirus quarantine, we found that people had tremendous interest in cooking and actively participated on social media to show their skills,” said Qiu Bing, the CMO of Jin Ding Xuan, “Clearly, the troublesome of processing ingredients and the time spent stopped many people from trying before.”
Qiu believed that, after the epidemic period, the cooking habit of many customers would become a routine. However, due to their limited time and the convenience-driven lifestyle, they would be more likely to buy some easy-cooked dishes, promoting the growth of the half-cooked food market.
Nevertheless, opinions are divided in the catering industry.
“Currently, half-cooked food is beneficial to both catering enterprises and consumers under this special period. But this will not become the mainstream. It will only be a supplementary category,” said Zhu Danpeng, a catering industry analyst.
Su Jun, head of China Association of Trade in Services, commented that the lack of price advantage would be a considerable obstacle to the sales in the half-cooked food sector. Since most of the consumers shopping online are price-sensitive, they will naturally compare the cost of the prefabricated ingredients with what they can purchase from the online grocery platforms and the mom and pop stores in their community. Therefore, a strong differentiation in seasoning, knife skills and brand-added value will be crucial for the company, which has its half-cooked food production line to stand out.
However, the sector has started to become crowded these days. Freshippo, the online fresh grocery store under Alibaba, has been incubating its own half-cooked food brand, ‘Hema Workshop.’ It has already become a national brand and got a rather high repurchase rate among consumers, which intensifies the game even at the very beginning.