SUBSCRIBE

Breaking News on Industrial Baking & Snacks

Trends > Emerging Markets

Hong Kong’s Swire to double down on Chinese bakery investment

Post a commentBy RJ Whitehead , 14-Feb-2017

Hong Kong’s Swire to double down on Chinese bakery investment

Cathay Pacific’s parent plans to nearly double the size of its retail bakery business by 202, to become one of the biggest bakers in China.

Over the next three years, Swire Pacific will increase the number of its bakery shops in Chongqing, Chengdu and Guiyang to 1,000 through its wholly owned Swire Foods subsidiary.

 

According to South China Morning Post, the conglomerate believes the benefits from stable, long-term growth from the food market outweigh the small scale of the business, compared with Swire’s aviation and property businesses. 

Last year, Swire Foods took full ownership of Qinyuan, a leading bakery chain, for HK$1.4bn (US$200m). Selling Chinese and Western-style pastries, it added over 500 retail outlets in Southwest China to Swire’s portfolio. The deal also included a 65,000 square-metre factory producing bakery goods in Chongqing. 

Bakery is a very market fragmented market in China. We have not yet seen any player dominating the market [so] there a a big opportunity there,” said Max Lau, managing director of Swire Foods, told SCMP. 

He said that the demand was due to rise because Chinese per-capita consumption was currently low, with an average spend on bakery goods of around just 140 yuan (US$20) per person per year. 

This is half the amount spent in Singapore, while Hongkongers spend three times as much as the mainland, and Japanese spend close to seven times as much for their baked goods.

Food still serves a basic need for everyone despite the economic slowdown in China,” Lau added.

[Moreover] the retail business is being challenged by the rise of e-commerce in China these days, but food retail cannot be replaced by e-commerce just yet,” he said. 

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Key Industry Events

 

Access all events listing

Our events, Shows & Conferences...