Summary of Key Points
Haidilao is no longer just the "big brother" that sells hot pot alone! In its half-year report for 2026, the revenue from its main hot pot brand decreased from 89.8% to 79.9%, yet the group's overall revenue still increased by 7.9%. This gap was made up by new businesses such as delivery (which doubled), multiple brands (like sushi and street food stalls), condiments, and franchise operations. Since Zhang Yong took over as CEO again, Haidilao has been focusing on three main areas: streamlining inefficient stores to maintain quality for the main brand, shifting from a broad expansion to a more targeted approach to new businesses to drive growth, and restructuring the organization from a system where store managers made all the decisions to one where the headquarters provides central support, with the goal of transforming from a single hot pot brand into a comprehensive food and beverage group.
1. Hot Pot Business: Focusing on Quality Rather than Quantity
Hot pot is Haidilao's core business, but this year's strategy is to streamline operations:
- Store Optimization: The number of directly-operated stores decreased by 14 (with 24 new openings and 32 closures), and 6 directly-operated stores were converted to franchises. The number of franchise stores increased from 41 to 99, resulting in a net increase of 26 stores. In other words, Haidilao is choosing to invest its resources more strategically.
- Maintaining Key Metrics: The table turnover rate (the number of customers served per table per day) increased from 3.8 to 3.9, and average customer spending remained stable at around 97 yuan. In contrast, the national average for hot pot restaurants has dropped from 87 yuan in 2023 to 58 yuan, and the closure rate for mid-range hot pot restaurants is 35% (3 out of 10). By focusing on innovative concepts (such as "Xunwei Yungui") and differentiated store formats (nighttime dining, family-friendly options), Haidilao has managed to maintain customer traffic despite a slight decrease in daily sales per store.
2. Delivery: From Occasional to Regular
Delivery revenue reached 2.05 billion yuan, a year-on-year increase of 121%, and it has doubled for two consecutive years. This is not just luck:
- Changing Consumer Behavior: Delivery was previously used for occasional hot pot consumption at home, but now Haidilao is focusing on more regular orders of mixed rice dishes and side dishes. For example, the company has partnered with Taobao's flash sales to offer hot pot dishes as part of regular meals.
- Improving Delivery Services: By setting up its own delivery infrastructure, Haidilao reduces its reliance on on-site kitchens during peak hours, ensuring timely delivery. However, this comes with increased costs (platform fees and raw material prices), so the goal is to gain market share rather than immediately make significant profits.
3. Multiple Brands: From Expansion to Selection
Haidilao's "Red Pomegranate Plan" has spawned 21 new brands, but this year the company is starting to refine its approach:
- Ushisushi: Two stores in Wuhan have seen high demand, with tables turning over eight times in three days, and 40,000 voucher copies were sold. Although there are only three stores nationwide, Haidilao's supply chain and network of stores allow for rapid expansion (from three to thirty stores in just a few months).
- Street Food Hot Pot: The first store in Guangzhou offers a more affordable option with fresh ingredients and a more casual atmosphere. With 12 stores in seven cities, this business model is proving successful.
- Strategic Adjustment: Haidilao is now focusing its resources on potential brands, integrating less successful ones. They have also launched the "Xunxian Island Mini Hot Pot" service, which delivers food on a track for one person to eat.
4. Organizational Change: Moving from a Decentralized System to a Centralized Model
For 30 years, Haidilao's success relied on store managers having significant authority and a mentor-apprentice system. However, this approach is no longer effective for its diversified business model:
- Why a Centralized Model?: With multiple brands and services, each brand cannot develop its own supply chain, research and development, and marketing efforts independently. The headquarters' central platform ensures consistent standards across all brands, such as the quarterly launch of "Xunwei Yungui," which requires coordination across various departments.
- Potential Risks: Centralization may reduce flexibility at the store level, as store managers used to have more autonomy in pricing and promotions. Zhang Yong is working to find a balance, with the goal of completing this transformation by 2027.
5. Franchising: Rapid Expansion with Caution
Franchise revenue increased by 180%, and the number of franchise stores grew from 41 to 99. However, the company is being cautious:
- Benefits: Franchising allows Haidilao to enter new markets (such as tier 3 and 4 cities) without significant capital investment, enabling a lighter asset-based expansion.
- Challenges: How to maintain service quality and control across franchise stores? Will Haidilao's reputation for excellent service be compromised? The company is balancing expansion with quality control to find a sustainable growth strategy.
Conclusion
Haidilao is actively evolving to address the limitations of its single-brand model. While new businesses like delivery and multiple brands are still being tested (with some not yet profitable, such as sushi), this self-renewal is more important than short-term growth figures. The food and beverage industry needs not just new brands but brands that can survive and adapt. The success of Haidilao in 2027 will depend on the effectiveness of its new centralized model and the ability to replicate its successful brands.