Summary of Key Points
Haidilao’s sushi brand, “Ruyu Sushi,” has recently opened two stores in Wuhan, officially entering the central China market. This marks a shift from a single-store test to a small-scale chain operation. Ruyu Sushi clearly draws inspiration from the Japanese chain restaurant “Sushiro” in terms of pricing, ordering systems, and supply chain management. The brand aims to tap into the rapidly growing sushi industry in China, seeking a second growth driver for its slowing hot pot business. However, while the sushi business holds promise, it also faces significant challenges, including maintaining freshness and ensuring quality control.
1. Why is Haidilao rushing into the sushi market? — The hot pot business is stagnating
Haidilao’s hot pot business has been experiencing growth difficulties in recent years: from 2023 to 2025, revenue increased, but profits did not keep pace. The table turnover rate dropped from 4.1 times per day in 2024 to 3.9 times per day in 2025, indicating that fewer customers are visiting each table daily. As the main business enters a stage of stabilizing growth, Haidilao needs to find new sources of revenue.
The sushi market is particularly attractive: Sushiro has become extremely popular in China, with queues for its first Shanghai store stretching up to 700 people waiting for 14 hours. The market size exceeded 90 billion yuan in 2025 and is expected to reach over 200 billion yuan by 2032, with an annual growth rate of 10-12%. Since Sushiro has proven the viability of this business model, Haidilao saw no reason to miss out and launched Ruyu Sushi to enter the market.
2. What strategies has Ruyu Sushi adopted from Sushiro? — Copying with local adjustments
Many aspects of Ruyu Sushi’s operations reflect Sushiro’s approach, but with localized modifications:
- Affordable prices: While Sushiro offers meals averaging around 120-130 yuan per person, Ruyu Sushi is more affordable at around 88 yuan per person, with main sushi items priced between 9.9 and 15 yuan—more in line with consumers’ current preference for value for money.
- Electronic ordering system: Instead of the traditional method where sushi is served as it rotates on a conveyor belt, customers use electronic screens to place their orders, allowing them to choose exactly what they want. This reduces food waste and makes the experience more interactive.
- Menu layout that caters to preferences: Salmon is placed at the front of the menu, as it is the most popular in Japan, but Chinese consumers prefer it grilled, which aligns with Sushiro’s strategy after entering the Chinese market.
- Shared supply chain: Haidilao utilizes its own “Shuhai Supply Chain,” a specialized network for supplying ingredients to its hot pot restaurants, which can be directly utilized for Ruyu Sushi, ensuring fresh ingredients while controlling costs. Additionally, the domestic Japanese food supply chain is becoming more mature, with local production of seaweed and eel, as well as strict safety inspections for imported seafood.
3. Why is the sushi market so popular in China? — Right timing, demand, and a robust supply chain
The success of sushi in China is not accidental:
- Changing consumer preferences: Consumers now place more emphasis on value for money and freshness when dining out. Sushiro targets the mid-range market, which meets the needs of middle-class consumers.
- Mature supply chain: China can produce most of the ingredients needed for sushi, such as seaweed and eel, and imported seafood undergoes thorough safety inspections, addressing the key issue of freshness.
- Large growth potential: The market size is expanding rapidly, from 85 billion yuan in 2023 to 90 billion yuan in 2025, with expectations of reaching 200 billion yuan by 2032. Early entrants may gain a competitive advantage.
4. Challenges in the sushi business — Freshness and quality control are critical
Despite the allure of the sushi market, there are significant risks:
- Lessons from Japan: Japanese sushi restaurants are experiencing a polarization, with high-end and chain-style businesses thriving while many small, local stores closing due to rising costs (fuel, labor) and decreased foreign tourism.
- Domestic challenges: Another Japanese brand, “Cangshushi,” failed in China after opening three stores due to the pandemic and concerns about Fukushima nuclear contamination affecting imported seafood safety.
- Freshness and quality control are essential: Freshness is the core of sushi, and middle-class consumers are very particular about this. Haidilao has had issues with kitchen hygiene in the past; therefore, Ruyu Sushi must maintain high standards, especially as it expands. Even with a robust supply chain, any problems at the store level can damage the brand’s reputation (for example, Sushiro’s “spit incident” resulted in a 800 million yuan loss in market value).
In summary, Haidilao’s entry into the sushi market presents both opportunities and challenges. The industry is promising, and the model is proven successful, but to succeed, it must focus on maintaining freshness and quality control. Consumers are willing to pay for good value, but they will not tolerate poor-quality food.