The scale of China's chain catering industry has recovered quickly from the impact of the COVID-19 pandemic, with the market value expected to reach 4.7 trillion yuan ($737.4 billion) this year, boosted by the rapid growth of takeout orders and the adoption of digital technologies to reach more younger consumers.

According to the 2021 China Chain Catering Industry Report, the market value of the country's catering sector is on track to reach 6.6 trillion yuan in 2024 from 4 trillion yuan last year.

The report, jointly conducted by finance institution China Renaissance and China Chain Store &Franchise Association, looked at data from 21 listed catering enterprises and the other 60-odd chain catering companies and pointed out that China's catering market has grown in a healthy manner.

The market scale increased to 4.7 trillion yuan in 2019 from 2.9 trillion yuan in 2014, with an annual compound growth rate of 10.1 percent.

China's catering industry can be divided into three sub-markets, it said. They are Chinese food, Western food and other dishes, accounting for 79.4 percent, 15.2 percent and 5.4 percent, respectively, in 2019, the report said.

The scale of Chinese food has increased to 3.7 trillion yuan in 2019 from 2.3 trillion yuan in 2014, with an annual growth rate of 9.2 percent. The scale of the Western food market has grown to 700 billion yuan in 2019 from 300 billion yuan in 2014, with an annual growth rate of 12.8 percent.

By 2020, the number of catering stores in China had reached 6.53 million, a year-on-year decline of 11 percent, mainly due to the closure of small and medium-sized catering enterprises caused by the COVID-19 pandemic.

Among many cuisines, hotpot is the largest category in the market among all Chinese restaurants, with Sichuan cuisine ranking second among all categories.

When it comes to consumption, dinner catering takes the major part. The gathering of friends, colleagues and classmates, the pursuit of pleasure in dining, and the needs of daily catering are the three main scenarios for daily dining, accounting for 31.2 percent, 17 percent and 16.3 percent, respectively.

The proportions of those eating out at noon in the middle of the week and at night on the weekend are even higher.

Spicy food remains a favorite of Chinese consumers, with 41.8 percent of those interviewed choosing spicy taste as their top selection in the flavor of their cuisine. Some 23.7 percent like a light taste and 20.3 percent prefer a fresh taste in their dishes.

Takeout has become a new driver for the catering industry, the report said.

Inspired by the online consumption trend of younger consumers, the takeout sector continues to grow rapidly. In 2020, the scale of China's takeout catering market reached 664.6 billion yuan, a year-on-year increase of 15 percent.

In 2020, except for the period between February and April seriously affected by COVID-19, the other months logged positive year-on-year growth. The growth of orders basically remained at more than 70 percent in the fourth quarter of 2020, and even doubled by 107.9 percent in December.

The takeout sector may continue to develop strongly. The hefty growth of takeout orders gives catering stores an opportunity to expand their income and reach more consumers. The proportion of takeout in some traditional catering stores has already reached 50 percent or even higher.

Investors have shown more interest in the catering industry due to robust gains on the takeout segment of catering outlets, and more applications in the sector contributing to sales and easier standardization of the catering process.

By August 2021, the investment and financing in China's catering industry reached 43.91 billion yuan, twice that of 2020. Transactions in the catering sector in 2021 have already topped the level in 2020. However, the growth in the number of transactions is limited, indicating that investors have shown a preference for larger catering operators.