China’s zero-COVID policy has negatively impacted consumer buying habits and severely weakened the food and beverage industry. Companies like Taiwan’s famous Bafang Dumpling chain hint they may withdraw from the Chinese market and divert their operations to the United States. Although Bafang has yet to confirm this, it has activated its stop-loss mechanism, closed poorly operating stores in China, and opened its first U.S. store in March of this year.
Bafang and Other Restaurant Groups May Exit China
Headquartered in Taiwan, Bafang Dumpling is a potsticker and dumpling specialty store. In its heyday, the company operated over 100 stores in mainland China, which now generate less than one percent of Bafang’s total revenues. Taiwan accounts for 81 percent of Bafang’s revenues and Hong Kong accounts for 16.9 percent.Bafang’s sluggish performance in China began three years ago when the Chinese Communist Party (CCP) began its zero-COVID policies to contain the pandemic. The ensuing city lockdowns, power restrictions, escalating prices of raw materials, and higher rents prevented consumers from shopping and devastated the profits of businesses.
