Potsticker Foods (Shanghai) Co., Ltd. (Stock Code:2517.HK) on2023year11month2The company successfully listed on the main board of the Hong Kong capital market on [date]. It is a leading and rapidly growing home-cooked food brand in China, offering ready-to-eat, ready-to-heat, ready-to-cook and ready-to-portion ingredients, and focusing on home hot pot and barbecue products. With a carefully planned product portfolio and a wide network of neighborhood stores, consumers can enjoy convenient, affordable and delicious meals at home. Frost & SullivanFrost & Sullivan,Frost & Sullivan, hereininafter referred to as 'Frost & Sullivan', provides exclusive industry advisory services for the listing of Potouquan Food (Shanghai) Co., Ltd. We hereby extend our warmest congratulations on its successful listing.
Potsticker Foods (Shanghai) Co., Ltd. (hereinafter referred to as 'Potsticker') was established on2023year11month2The company was successfully listed and issued shares6,880.2810,000 shares, of which90%For international distribution,10%For public offering, there are also15%Excess rights issue. Issue price per share5.98HK$, with the net amount of raised funds being approximately3.565HK$10 billion.
During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), facilitating communication between the issuer and the Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Exchange.
Investment highlights
The company is a leading and rapidly developing home dining food product brand in China, meeting people's needs for home dining;
The company has successfully implemented a store network expansion strategy;
The company offers delicious, convenient, affordable meals with a wide variety of options, improving kitchen meal preparation efficiency for home dining;
The company's ability to continuously procure high-quality ingredients and raw materials, expand product portfolio, and improve operational efficiency;
The company has the largest home-cooked meal retail network in China;
The company has an efficient supply chain management and operation, achieving cost optimization while ensuring product quality and safety;
A digital management system that enables the company to achieve excellent operational efficiency;
The company is led by a visionary management team with rich industry experience, which drives the vigorous development of the company's business and corporate culture.
According to a report by Frost & Sullivan, in2022year:
Ranked first among all retailers in China by retail sales of home-cooked meal products,
Ranked as the largest home hotpot and barbecue brand in China by retail sales;
In terms of retail sales of its own-branded products, the company is the largest retailer of home dining products among Chinese own-brands;
As of2022year12month31Today, in terms of the number of retail stores, the company has established the largest retail store network in China that offers one-stop home dining products.
Overview of the Chinese Catering Market
Based on various factors such as the increasing degree of urbanization, changes in lifestyle, and increased disposable income, China's catering market has developed rapidly over the past few years. With the steady increase in per capita annual disposable income and per capita food expenditure, the market scale of the catering market, measured by retail sales, has2018Renminbi in [year]69,037RMB 10 billion steadily grew to2022Renminbi in [year]93,151yuan, with a compound annual growth rate of7.8%In terms of retail sales, the market size of China's catering market is expected to be2027RMB reached136,380yuan, since2022The compound annual growth rate for the year is7.9%Currently, people mainly dine in four ways, namely(i)Buy groceries and cook at home,(ii)Dining in a restaurant(iii)Using catering delivery services, and(iv)Choose meal products for dining at home.
Market Overview of Eating Out at Home
In recent years, the trend of dining at home in China has been growing increasingly. Dining at home has become mainstream in all dining scenarios in China, accounting for a market share of the catering market that, by retail sales,2018year47.1%Grew to2022year60.3%.
Source: Frost & Sullivan report
With the continuous improvement of living standards in China, consumers are paying increasing attention to healthy diets and the raw materials used in food. Eating at home helps better control the quality and freshness of ingredients, thereby ensuring food safety and promoting health. In addition, eating at home also provides the space to customize meals according to personal taste and preferences. These advantages are driving the rapid development of the entire at-home dining market. According to a Frost & Sullivan report, the market size of China's at-home dining market has experienced strong growth in retail sales, from2018Renminbi in [year]32,482RMB billion growth to2022Renminbi in [year]56,156yuan, with a compound annual growth rate of14.7%.
atCOVID-19 pandemicDuring the pandemic, due to restaurant closures, infection risks, and pandemic control measures, people began to dine more at home, resulting in2020Year-end2022The market for home dining has surged during the year. This has had a lasting impact on people's lifestyles and habits, especially after the pandemic. As a result, home dining products have gradually become favored by consumers who pursue healthy diets in fast-paced life, as a dining option that reduces the time and skill requirements for starting from scratch cooking. According to a Frost & Sullivan report, China's home dining product market is expected to grow at the fastest rate in terms of retail sales in the future, driven by2022Year-end2027The compound annual growth rate for the year reached20.7%.
Source: Frost & Sullivan report
Overview of the Home Meal Market in China
In China, home-cooked meal products refer to ready-to-eat foods, ready-to-heat foods, ready-to-cook foods, or ingredients supplied to consumers to improve cooking efficiency in daily home cooking scenarios. A subset of home-cooked meal products includes home hot pot and barbecue products, which refer to ready-to-eat foods, ready-to-heat foods, ready-to-cook foods, or ingredients used for hot pot and barbecue at home, including beef and mutton products, meatballs, seafood balls./Sauce, hot pot base, seasonings, and barbecue seasonings.
Source: Frost & Sullivan report
According to a Frost & Sullivan report, the market size of the home dining food product market in China, measured by retail sales, has experienced strong growth, from2018Renminbi in [year]1,479RMB billion growth to2022Renminbi in [year]3,673yuan, with a compound annual growth rate of25.5%As consumers increasingly prefer convenient and healthy dining options that do not require complex cooking skills, it is expected2027The market scale will reach RMB in [year]9,400yuan, since2022The compound annual growth rate for the year is20.7%.
Source: Frost & Sullivan report
The competitive landscape of the home meal market in China
The meal delivery market in China is highly fragmented, with the majority of online food delivery platforms operating in tier-2 and tier-3 cities, according to a Frost & Sullivan report.2022In terms of retail sales of food products at home for the year, the top five retailers accounted for the market share11.1%Yu2022In [year], ranked by retail sales of home-cooked meal products, KFC is the largest retailer of home-cooked meal products among all retailers in China, accounting for3.0%Market share. In addition, calculated based on the retail sales of home hot pot and barbecue products, Yu2022Nian Guolian is the largest home hot pot and barbecue product supplier among all Chinese suppliers, accounting for12.7%market share.
Source: Frost & Sullivan report
According to a report by Frost & Sullivan, in2022In 20XX, ranked by retail sales of its own-brand products in China, Kuaishou is the largest retailer of home dining products among China's own-brand brands.
Source: Frost & Sullivan report
According to a report by Frost & Sullivan, in2022Year, as of2022year12month31Today, Koubei has the largest offline retail store network in China that offers meal delivery products for home dining.
Source: Frost & Sullivan report
Market trends in the home-cooked meal products market in China
· One-stop home meal delivery product suppliers face growing demand
One-stop meal delivery service providers offer comprehensive solutions to meet consumers' meal needs. These suppliers have become popular shopping destinations for Chinese consumers seeking a convenient and fast way to buy all their food in one place. In addition, one-stop meal delivery service providers offer a variety of meal options to satisfy different tastes and dietary requirements, allowing consumers to mix ingredients and create their favorite meals from a single source. Therefore, we can expect that the demand for one-stop meal delivery service providers will continue to grow in the future.
- Product category expansion and improved taste fidelity
Consumers are increasingly seeking different styles of food options, and their demand for diverse and innovative home-cooked meal products is also on the rise. To meet this demand, suppliers of home-cooked meal products are continuously expanding their product range to offer more choices, allowing these companies to capture a wider range of food options for consumers and expand market share. Advances in food science and technology have facilitated the manufacturing of food comparable to fresh produce, bringing a more satisfying dining experience.
- Adapts to diverse catering scenarios where meals are consumed at home
Home-cooked meals offer easy-to-prep options to maintain flavor, making them suitable for various dining experiences. As a result, consumers of home-cooked meals are beginning to explore more off-site dining scenarios, such as camping and corporate catering.
- Online and offline sales channels are accelerating their integration.
In addition to strengthening offline sales channels, major suppliers of home-cooked meal products are also investing in the development of online sales channels to provide a perfect shopping experience. Due to the convenience and accessibility of online shopping, online sales channels are growing at a rapid pace. Home-cooked meal product suppliers will continue to use online sales channels to promote their brands and products, while expanding from offline to online models and integrating offline and online resources.
- Upstream integration intensifies
In the market for home meal delivery products, the trend of intensified upstream integration of the supply chain is becoming increasingly evident. Leading suppliers are investing in or collaborating closely with upstream providers to integrate their businesses and gain greater control over the quality and stable supply of their raw materials. Such arrangements reduce dependence on third-party suppliers and save costs by streamlining operations and reducing inefficient operations, enabling them to adopt more competitive pricing strategies.
Barriers to Market Entry for Home-cooked Food Products in China
- Brand building
As consumers' preferences shift towards mature brands with a good reputation, brand image is a key factor affecting the consumer decision-making process and differentiating them from competitors. However, for market entrants, building brand awareness and recognition can pose significant barriers, effectively becoming a barrier to entry into the market.
- product portfolio
In the home meal delivery product market, a diversified product portfolio has become a barrier to entry, demonstrating the company's strong ability to select and provide products based on an in-depth understanding of consumer needs. This diverse product portfolio enables the company to meet various needs of different customers through product differentiation and mature R&D capabilities. However, this comprehensive strength is the result of long-term accumulation, making it difficult for new entrants to establish a similar diversified product portfolio in the short term.
- sales channels
A comprehensive sales channel is crucial for the success of the home meal delivery product market. Establishing a comprehensive sales channel requires combining various strategic factors, such as leveraging established brands, building trust over time, and implementing effective management systems to ensure stability. These factors pose specific barriers to new entrants, who must establish their position in terms of the breadth and depth of the sales channels, as well as the efficiency of these channels.
- Supply Chain Management
A strong supply chain management capability can help home meal delivery product suppliers better control product quality and safety, ensure timely fulfillment of orders, and manage costs. However, establishing such a comprehensive system requires a significant amount of time, expertise, and investment. The challenge for new entrants is to build a robust supply chain management system to ensure stable and consistent raw material costs and quality control. Failure to adequately address this challenge could jeopardize their product supply and customer satisfaction, ultimately strengthening entry barriers and hindering their ability to effectively compete in the industry.
- digitization
Companies with digital core businesses can better manage quality control, improve operational efficiency, and provide high-value products and better customer service. Companies can gain a competitive advantage by leveraging digitization in operational management, making it difficult for new entrants to compete with them.
- food safety
In the home meal product market, food safety has become the most concerning issue for consumers. Ensuring food safety requires significant investment, professional knowledge and experience, as well as reliable records accumulated over time. This heightened focus on food safety poses a huge challenge to newcomers, as they must navigate and meet such stringent requirements.
- investment
The significant investments required to establish a strong brand, develop an efficient supply chain, create effective sales channels, ensure food safety, and retain top talent are considerable obstacles to entering the home meal delivery product market. Building a reputable brand requires substantial marketing efforts and resources, while implementing a robust supply chain demands specialized knowledge and investment in infrastructure and technology. In addition, establishing sales channels takes time, financial resources, and solid relationships with market participants. Finally, attracting and retaining top talent requires competitive compensation packages and favorable working environments. These factors together form high entry barriers, making it difficult for new entrants to compete successfully in the market.
Frost & Sullivan has extensive research experience in the catering and food and beverage industries, assisting well-known enterprises in successfully listing on the capital market. Recent successful listings include: Davis Commodities（ NASDAQ:DTCK), Zhenjiao Lidu 6979.HK), Dazhi Shares 1405.HK), Bai Guoyuan2411.HK), Aroma2147.HK), Weilong9985.HK), Shuangcai Zhuang2321.HK), Youran Animal Husbandry9858.HK), Jiulongwang1927.HK), Yum China9987.HK), Nongfu Spring9633.HK), Fengxiang Food9977.HK), Simore6969.HK), China Feihai6186.HK), China Tobacco International6055.HK), Premium360（2360.HK), Wugu Millhouse1837.HK), Baby Tree1761.HK), Haidilao6862.HK), sustainable agriculture8609.HK), Longhui Holdings1007.HK), Xinhong International1587.HK), Yiyuan Liquor Industry8146.HK), Jierong International2119.HK), Bingshi International1705.HK), Nissin Foods1475.HK), Asian groceries8413.HK), Zhouhei Duck1458.HK), COFCO Meatgrain1610.HK), Yihai International1579.HK), Zhongdi Dairy (1492.HK), Dali Foods3799.HK), Manor Ranch1533.HK), Wanzhou International0288.HK) etc.
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