Abstract:With the continuous improvement of domestic consumption level, people's demand for leisure and entertainment is also increasing. As a place to socialize, entertain and relax, bars are gradually gaining traction among more and more consumers. Consumption upgrades have promoted the development of the bar industry, and from 2017 to 2019, the number of bars has been increasing. However, due to the impact of the epidemic in 2020, offline consumption was hindered, and the company's operating performance was seriously damaged, so it had to close stores to reduce losses. The number of bars in China continued to decline in 2021. In 2022, under the guidance of relevant national policies, the bar industry will gradually recover, and the number of bars will reach 60,200 in 2022.
1. Definitions and Classification
A bar is a place where alcoholic beverages such as beer, wine, liquor, and cocktails are served. Bars can be a place for entertainment and relaxation, as well as a place for socializing and exchanging information. There are various styles and types of bars, which can be divided into main bars, entertainment bars, leisure bars, clubs, salon bars, service bars, banquet bars, and multi-purpose bars.
Second, industry policies
1. Competent authorities and regulatory system
The administrative departments in charge of the bar industry include the National Development and Reform Commission, the Market Supervision and Administration Bureau, etc. The National Development and Reform Commission (NDRC) is mainly responsible for formulating and organizing the implementation of national economic and social development strategies, medium- and long-term plans, and annual plans, and proposing overall goals, major tasks, and relevant policies for accelerating the construction of a modern economic system and promoting high-quality development. The Market Supervision and Administration Bureau is mainly responsible for drafting draft laws and regulations related to market supervision and management, formulating relevant rules, policies and standards, organizing the implementation of the strategy of strengthening the country with quality, food safety strategy and standardization strategy, formulating and organizing the implementation of relevant plans, standardizing and maintaining market order, and creating a market environment of honesty and trustworthiness and fair competition.
2. Industry-related policies
In order to further strengthen the supervision of the mainland bar industry and ensure the healthy development of the industry, the mainland policy has introduced a series of policies and measures. For example, in the Decision of the Ministry of Culture and Tourism on Amendments issued in April 2022<娱乐场所管理办法>, it is proposed that entertainment venues should hang entertainment business licenses, signs prohibiting or restricting minors from entering in a conspicuous position, and the signs should indicate the telephone number for reporting. This will help to enhance the compliance of bars and ensure that bars operate legally, while also protecting the physical and mental health of minors. In addition, the state has also actively introduced incentive policies, such as the "Measures for the Recovery and Expansion of Consumption" issued in July 2023, which proposes to expand the consumption of catering services. Advocate healthy catering consumption, oppose catering waste, support food festivals in various places, create special food streets, and carry out catering activities to promote consumption. This will be conducive to the expansion of consumption, which will indirectly drive the growth of the bar industry.
Third, the development process
From the perspective of development history, the development process of China's bar industry can be divided into the initial stage, the development stage and the mature stage. Chinese bars first appeared in the 90s of the 20th century, mainly concentrated in developed cities and regions. At the time, bars were primarily Western cultural symbols, appealing to the younger generation and fashionistas. In the 21st century, China's bar industry has begun to develop rapidly, and more and more bars have emerged in various places. These bars have their own characteristics in terms of décor, music selection, drinks, etc., to meet the needs of different consumers. For example, in 2009, a new type of economic tavern represented by Helens came out, and in 2014, Hutaoli created a precedent for music taverns. Since 2019, with the upgrading of consumption and changes in consumer demand, China's bar industry has gradually matured. The variety of bars is more abundant, the level of service is improved, and at the same time, it also attracts more consumers of different ages and spending power. For example, in 2019, Nai Xue's tea entered the new format of "catering + wine" as a pioneer, and the "X+ wine" model emerged.
Fourth, industry barriers
1. Financial barriers
The bar industry requires a large capital investment. On the one hand, the initial investment cost of the bar industry is high, including the cost of venue rental, decoration, equipment purchase, personnel recruitment and training, etc., on the other hand, the bar also needs to continue to invest funds in the process of operation, including staff salaries, alcohol procurement, equipment maintenance, marketing and promotion costs. In addition, there may also be some emergencies or unexpected situations, such as equipment failures, emergencies, etc., which require entrepreneurs to invest funds in time to deal with them. For entrepreneurs with weak financial strength, financial barriers can be an obstacle to entering the industry.
2. Brand barriers
In the bar industry, some well-known brands have established a high level of market recognition and reputation, which makes new brands facing greater competitive pressure. Consumers tend to be more inclined to choose brands they know and trust, which can be a challenge for new brands. In addition, the differentiation between brands is not obvious, and many bars are more similar in the products and services they offer. This makes it necessary for new brands to find their niche in the market and create a unique brand image and characteristics to differentiate themselves from their competitors. However, achieving brand differentiation requires a significant investment of time and effort, and comes with a certain amount of risk. As a result, new entrants will face high brand barriers.
3. Talent barriers
The bar industry requires certain professional skills, such as bartending technology, customer service, and alcohol knowledge. These skills require professional training and hands-on experience to master, and constitute a certain barrier to entry for new entrants. And the bar industry is more competitive, and businesses often need to spend more time and money to attract and retain good talent. Therefore, for new bar companies entering the market, they need to build their own talent reserves from scratch, and enterprises face high talent barriers.
Fifth, the industrial chain
1. Analysis of the industry chain
From the perspective of the industrial chain of the bar industry, the upstream mainly includes alcoholic beverages (beer), catering equipment (ice machines), electronic products (audio), etc., the midstream refers to the bar industry, and the downstream refers to consumers. From the upstream point of view, the price changes of upstream suppliers will directly affect the operating costs of midstream bars, and the changes in operating costs play a vital role in the changes in the price of bar products.
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