May 26, 2024
China Dark Kitchens Market

China Dark Kitchens Ghost Kitchens Cloud Kitchens Market is Expected to be Flourished by the Rising Demand for Convenient Food Delivery Services

Dark kitchens, also known as ghost kitchens or cloud kitchens, are commercial spaces dedicated solely to the preparation of delivery-only meals. They allow restaurants to focus on optimizing their operations for delivery without incurring costs related to dining areas or front-of-house services. In China, dark kitchens have experienced rapid growth driven by the expansion of food delivery platforms and the increasing popularity of online food ordering among Chinese consumers. Major delivery platforms such as Meituan and have partnered with restaurant chains and invested in dark kitchen facilities to manage food preparation and fulfillment more efficiently.

The global China Dark Kitchens Ghost Kitchens Cloud Kitchens Market is estimated to be valued at US$ 4.03 Billion in 2023 and is expected to exhibit a CAGR of 25.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Rising Demand for Convenient Food Delivery Services: China boasts one of the largest online food delivery markets globally, with annual transactions exceeding RMB 100 billion as of 2020. Chinese consumers today are increasingly time-pressed and value the convenience of home delivery services. The popularity of food delivery platforms has spurred demand for dark kitchen infrastructure that can maximize efficiency in fulfilling online orders.

Another key driver of the dark kitchens market is the emergence of virtual restaurant brands. Several food companies have launched delivery-only restaurant brands which operate exclusively through dark kitchen facilities. This allows restaurant operators to launch new concepts or expand existing ones at lower costs, without the capital expenditure related to dining space development. The rise of delivery-focused restaurant brand portfolios has further bolstered the demand for commercial kitchen rentals optimized for online food delivery business models.

Segment Analysis

The China dark kitchens/ghost kitchens/cloud kitchens market is dominated by independent contractor-owned kitchens sub segment. Over 60% of the kitchens in China are owned and operated by independent contractors who either lease kitchen space or operate out of rented facilities. These independent kitchens have lower operating costs which allow them to be highly competitive on pricing and profitable even at low volumes. Many of them also specialise in niche cuisines or produce private label food brands.

PEST Analysis

Political: The government is pushing for modernization of China’s large food service sector to improve hygiene standards and supply chain efficiency. New regulations have raised compliance costs for small kitchen operators.

Economic: China enjoys strong economic growth and rising incomes. However, inflation is also rising rapidly increasing operating costs. Labor shortage in some cities is pushing up wages. Growing health consciousness has increased demand for cleaner, healthier foods prepared in dedicated facilities.

Social: Younger Chinese consumers are increasingly embracing online food ordering platforms and prefer variety and convenience. 36% of China’s population lives in cities contributing to demand for delivery and take-out foods from centralized kitchens.

Technological: Advanced GPS, IoT sensors and data analytics help kitchen operators streamline delivery logistics, monitor orders, manage inventory and optimize operations. Online platforms integrate payments, ordering and marketing in a unified system facilitating operations.

Key Takeaways

The Global China Dark Kitchens Ghost Kitchens Cloud Kitchens Market Growth is estimated to be valued at US$ 4.03 Billion in 2023 and is expected to exhibit a CAGR of 25.9% over the forecast period 2023 to 2030.

The market is driven by growing demand for convenience foods and rising preferences of time-strapped consumers for online food delivery options. The southeast region dominates the market currently accounting for over 35% share owing to high population densities in cities like Shanghai, Guangzhou and Shenzhen with booming online delivery businesses. The eastern region in China is expected to witness highest growth during the forecast period. Cities like Hangzhou, Nanjing, Ningbo are witnessing fast economic growth and urbanization. Young working population has higher rates of online ordering driving demand for centralized kitchen facilities.

Key players: Major players operating in the China dark kitchens/ghost kitchens/cloud kitchens market include Panda Selected, Dimin & Co, Cloud Kitchen and Kitchen United. These players are adopting technologies like AI, IoT and data analytics to optimize supply chains and delivery logistics. They are also exploring new cuisine categories and private label products.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it