Alex Chen from the organizing committee of the China International Vending Systems & Commercial Self-Service Products Exhibition 2006 has revealed a number of fascinating facts about China's growing vending industry.
The past few years have seen an upsurge in the development of China’s automatic vending machines market.
Vending machines in China are rapidly spreading all over the country, migrating from the affluent coastal areas and mega and second-tier cities to hinterland and sub-developed areas, from star hotels, subway stations, airports and other high-end venues to lower-level communities.
Industry experts predict that the potential for China’s vending market is capable of one machine for every 500 people, against currently one for every 23 in Japan, 40 in the US, and 60 in Europe, as China is still some way from the developed markets.
China’s urban population of 360 million in 1996 represents a market potential of 730,000 vending machines, with an estimated annual sales of RMB50bn on the basis of RMB200 per machine per day.
Industry experts foresee an installation of at least 100,000 vending machines for the launch period, with an annual gross output value of RMB1bn; 500,000 vending machines for the development period, with an annual gross output value of RMB10bn, and three million vending machines for the mature period with RMB6bn.
China’s vending machines market is poised to boom during 2004-08 on the back of opportunities brought by Beijing’s claim to the 2008 Olympic Games and Shanghai’s entitlement to the World Expo 2010.
The sector will enter into the development phase since 2008, when vending machines will stand to trigger the third retailing revolution in China after department stores and supermarkets.
According to estimates, the market has attracted the attention of 10 domestic developer-manufacturers and 40-plus operators. Nankai Guard and Qingdao Aucma have invested RMB160m and RMB60m on R&D, manufacturing, marketing, sales and operation, respectively since 2000 and 2001.
Giants such as Haier have also set their sights on this niche. Nonetheless, the market is still dominated by Nankai Guard and Qingdao Aucma.
Overseas firms have also begun to secure footholds. Fuji Electric, Japan’s leading AVM manufacturer, and Japan’s beverages companies, the world’s largest vending machines operators, are both bullish in the China market. Meanwhile, US firms De Amertek and Hengxin Group have also begun blazing trails.
China’s large and mid-level cities have reached the stage of rapid growth for vending machines.
Shanghai’s 2,000-plus high-end office buildings, with a vast white-collar consumer base, are capable of vending machines on a large number of floors, though it is unrealistic for the buildings to house many shops. Shanghai’s rapidly growing rail system entails constant flux of instant consumers, enabling vending machines to be installed along the rail lines.
With tourist and consumer sites increasing, these sites are also premier places for vending machines. It is widely believed among industry authority that now is the prime time to plunge headlong into the Chinese vending market.