Hong Kong conglomerate Swire eyes market leadership in China’s bakery market
Swire plans to increase the number of bakery shops in Chongqing, Chengdu and Guiyang to 1,000 within three years
Swire Pacific plans to almost double the size of the retail outlets of its bakery business by 2020, making it one of the biggest bakery chains in China.
As the demand for better quality food products grows in China, Swire will increase the number of its bakery shops in Chongqing, Chengdu and Guiyang to 1,000 within three years, through Swire Foods – a wholly owned subsidiary of the group launched in 2010 and encompassing the Taikoo brand.
The conglomerate sees long term stable growth in the food industry even though the business scale is small when compared with its aviation and property businesses. Swire’s Cathay Pacific Airways, has been facing pressure on passenger yields amid competition and the retail property market in Hong Kong is still challenging as fewer mainland tourists are coming to Hong Kong.
“People only buy pastries at nearby shops so we expand the number of outlets to increase market share,” said Steven Yuen, chief executive officer of Chongqing New Qinyuan Bakery.
The planned business scale will be comparable to other brands such as Holiland Bakery.
Last year, Swire Foods completed a HK$1.39 billion deal to take full ownership of Qinyuan, a leading bakery chain selling Chinese and Western-style pastries, with over 500 retail outlets in Southwest China. Qinyuan also has 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.
