Swire plans to double Qinyuan bakery China network

Qinyuan bakery - credit photo SwireSwire plans to nearly double the size of its Qinyuan bakery chain by 2020.

Over the next three years, Swire Pacific plans to grow the number of its bakery shops in Chengdu, Chongqing and Guiyang to 1000 through its wholly owned subsidiary Swire Foods.

The Hong Kong conglomerate believes the benefits from stable, long-term growth from the food market outweigh the small scale of the business compared with its aviation and property businesses, reports the South China Morning Post.

Swire Foods last year paid HK$1.4 billion (US$200 million) for bakery chain Qinyuan. Selling Chinese and Western­-style pastries, it added more than 500 retail outlets in southwest China to Swire’s portfolio. The deal also included a 65,000 sq­m bakery goods factory in Chongqing. “Bakery is a very fragmented market in China,” says Swire Foods MD Max Lau. “We have not yet seen any player dominating the market, so there a big opportunity there.”

He says the demand is set to rise because Chinese per-­capita consumption is currently low, with an average spend on bakery goods of around 140 yuan (US$20) a person annually. This is half the amount spent in Singapore, while people in Hong Kong spend three times as much as the mainland, and Japanese spend close to seven times as much.

Lau says that while retail is being challenged by the rise of e­Commerce in China, “food retail cannot be replaced by e­Commerce just yet”.

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