Summary of Key Points
The internet celebrity with tens of millions of followers, Li Liangliang, attempted two ventures in the food industry (Chongqing-style noodles and hot pot skewers), resulting in losses of nearly 5 million yuan in less than two years. Her first attempt involved opening three noodle shops. Due to high costs for the larger stores and a decline in popularity, she lost 3 million yuan. In her second venture with hot pot skewers, although she adjusted the location (to a community area) and reduced staff, the 800-square-meter store clashed with the local community’s demographics, and fierce competition from established businesses led to another loss of 1 million yuan within 10 months. The article points out that similar failures by other celebrity entrepreneurs such as Xue Zhiqian and Chen He stem from a fundamental misunderstanding of the food industry: they underestimate its complexity. While traffic can generate initial interest, a lack of professional management skills and understanding of the business is ultimately fatal.
How Was the Money Spent in Both Ventures?
Li Liangliang’s failures both followed the same pattern: heavy upfront investment with little success in retaining customers:
- Noodle Shops (2022): All three shops were located in popular shopping districts in Chongqing. The first shop, which was 300 square meters—ten times larger than typical noodle shops—cost over 2 million yuan just in decoration. Additional expenses for opening events and high rent kept costs high. Despite affordable prices (15 yuan per person), the lack of unique offerings in the crowded district meant customers didn’t continue to favor her stores, leading to their closure and a loss of 3 million yuan.
- Hot Pot Skewers (2023): She moved to a community area to cut rent costs and reduced staff. However, the 800-square-meter store was still much larger than regular hot pot shops. Initial investments in kitchen renovations (500,000 yuan), air conditioning (80,000 yuan), and furniture (200,000 yuan) totaled nearly one million yuan. The store gained some popularity due to her online presence, but the limited customer base in the community, combined with competition from established hot pot restaurants, resulted in another loss of 1 million yuan after 10 months.
Why Didn’t the Second Attempt Succeed?
Despite learning from previous mistakes, Li Liangliang’s second venture still failed due to unresolved core issues:
1. Location Mistake: Choosing a community area to save on rent meant her store lacked attractions and shopping facilities, making it unattractive to tourists and local residents who preferred established businesses.
2. Cost-Effectiveness Issue: Although the prices were moderate (40-50 yuan per person), the large size of the store required a high turnover rate to be profitable. The limited customer flow in the community couldn’t support such high operating costs.
3. Fierce Competition: Established hot pot restaurants had loyal customers and good reputations, giving Li Liangliang’s shop no competitive advantage in terms of taste or service.
A Common Problem for Celebrity Entrepreneurs in the Food Industry
The issue is not unique to Li Liangliang; other examples like Xue Zhiqian’s “Shangshangqian” and Chen He’s “Xianhezhuang” also failed for similar reasons:
- Misunderstanding of the Industry: They assumed opening a restaurant was simple, but it requires expertise in various aspects such as food quality, cost control, and employee management.
- Overreliance on Traffic: While their fame helped attract customers initially, retaining them depends on the product and experience. For instance, “Xianhezhuang” faced criticism for using uns fresh ingredients, which deterred repeat customers.
- Excessive Extravagance: They focused more on their celebrity status than market demand. For example, Li Liangliang’s large noodle shops were unnecessary given that smaller stores in the same area were sufficient.
The Reality of the Food Industry
In today’s food industry, traffic is merely a starting point, not a guarantee of success:
- Intense Competition: With so many restaurants, consumers have many choices. Even established businesses struggle, let alone newcomers from different industries.
- Limited Potential in Community Areas: Community-based stores face limited customer bases, making it difficult to make significant profits unless they provide essential services (like breakfast).
- Long-Term Success Depends on Quality: To retain customers, a restaurant needs good food, reasonable prices, and excellent service—none of which are directly related to the celebrity owner’s status.
In short, using fame to attract customers can open the doors to the food industry, but sustained success requires practical skills in product development, operation, and cost management. Without these fundamentals, even the most popular celebrities will continue to face financial losses.