Photo source: Visual China

Blue Whale News, September 10 (Reporter Zhang Jinglun) Recently, Haidilao broke into a new category in the restaurant industry — its fried chicken brand “Xiaohi Ai Deep Fried” opened in Taiyuan. In the next two months, Xiaohi Aibai also plans to open stores in cities such as Tianjin, Wuxi, and Shijiazhuang.

In the food and beverage market in the past two years, the fried chicken category can be said to have shown strong growth momentum and popularity. According to the Tianyancha App, there are more than 0.1 million “fried chicken” related companies survive/active in the country, and the number of new registrations reached 14,490 in the past year. At the same time, many fried chicken chain brands, such as Jieyu Grandma, Leggy Boss, and Tiger Head Fried, have announced new investments in the past year.

Is the resurgence of “fried chicken” really going to become popular as a fresh trend in the finished category? Can the Haidilao version of fried chicken get out of the 100 billion racetrack?

Haidilao's version of high-end fried chicken

According to the brand's official information, Xiaohi Ai's main specialty is “fried chicken with sauce.” In terms of flavor choices, in addition to garlic soy sauce, sweet and spicy, honey, mustard, etc., the brand's star flavor is snowflake cheese, which is generally similar to Korean-style fried chicken.

Judging from the official mini program, the product SKU is not complicated. The product categories include fried chicken, snacks, and drinks, and the per capita consumption is between 40 yuan and 50 yuan.

According to Red Food Big Data, currently the main price range for the fried chicken category is between 11 yuan and 20 yuan, accounting for more than 60%. Haidilao's “Xiaohi Fried Chicken” is in the 40 yuan to 60 yuan price range, accounting for only 3.22%. It is the same “high-end consumption” for fried chicken as Popeyes and Reggie from the US. Official sources also refer to the brand as a “light luxury new favorite.”

However, “high-end fried chicken” is certainly a trend that has received much attention in recent years. One notable example is “Let's Talk Fried Chicken.” This deep-fried chicken brand from the county town of Yanji only took two or three years to sell a limited-edition version of Hermès, a popular dish that can be found everywhere. The price of the large portion is 98 yuan, and the price of the half portion is 55 yuan. Even so, the business is still booming to the point where there are long queues.

Why is “high-end fried chicken” a trend now? What about even triggering giants like Haidilao to get involved?

Zhan Junhao, a well-known strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, said in an interview with Blue Whale News that the trend of “high-end fried chicken” reflects growing consumer demand for food quality and dining experience. As living standards improve, people are no longer satisfied with basic dietary needs, but are paying more attention to the freshness, health, and unique dining experience of food.

“Haidilao's entry into the fried chicken market is not only a response to current food and beverage market trends, but also part of its diversification strategy. Haidilao has strong brand influence and service standards. Entering the fried chicken circuit means that the existing supply chain advantages, brand effects, and customer base can be used to quickly open up the market. Furthermore, it also reflects the trend of cross-border integration within the catering industry, where different types of catering companies attract a wider range of consumers by introducing diverse product lines to seize new business opportunities.” Zhan Junhao added.

But on the other side, Tims' Tianhao China announced the sale of the high-end fried chicken brand Popeyes. The “500 stores in 5 years, over 1,700 stores in 10 years” flag for this fried chicken brand suddenly became empty talk. It also meant that Popeyes's operator in China changed hands for the third time.

Judging from the results of the 15-month cooperation between Tims' Tianhao China and Popeyes, Popeyes's results barely passed. From the third quarter of 2023, when the Popeyes brand began generating operating data, to the first quarter of 2024, the adjusted EBITDA profit margins of PopEyes stores were 12.2%, 1.10%, and -7.6%, respectively.

Whether high-end technology can remain attractive for a long time is yet to be further verified by the market.

Can Little Hi Ai get out of the 100 billion fried chicken market?

Just before the opening of the restaurant chain RicheeSeFactory (RicheeSeFactory) under the internationally renowned brand Nabati (Nabati) Group, established its first store in Shenzhen. Its official mini program was launched, and a variety of fried chicken snacks were launched.

In addition, fast food brands such as Nishishoji, Ajisen Ramen, and DQ Blizzard & Burgers have added “fried chicken” as snacks. Now that Haidilao is also eyeing fried chicken racing tracks, what business opportunities have been revealed behind it?

First, the fried chicken market is constantly expanding. According to the data, the fried chicken market surpassed 300 billion yuan in 2021, and is expected to reach 413.4 billion yuan in 2024, with an average annual growth rate of about 10%.

The huge market space has also made fried chicken a target for capital competition. Over a year, at least 4 fried chicken brands have announced successful financing. In August of last year, Boss Legs received a 4 million yuan round of financing; in September of last year, Grandma Xieyu announced that she had received a 10 million yuan angel round of financing, and Tiger Head Bomb announced that it had received millions of yuan in angel financing; at the beginning of this year, Crispy Chicken Diary received strategic investment, and the investor was Chinese commercial capital.

In fact, it's not easy to stand out in China's “fried chicken industry”; it's a very popular and scattered race track. According to Tianyan survey data, there are 0.1 million active and surviving companies related to “fried chicken” alone. Distinguished by category, there are three major categories of American, Korean, and Chinese fried chicken. In addition, there are also a large number of street and alley couples stores.

A Blue Whale News reporter noticed that although the fried chicken category continues to be popular, the popularity of the racetrack has also intensified competition among brands. The number of stores has increased dramatically, and the limited market has begun to be divided.

For example, in Beijing's Chaoyang Heshenghui fast food and snack district, there are many fried food stores such as “Yongxiang Fried Chicken”, “Man Wei Ming Sheng Fried Chicken Stand”, “Lao Qian Fried Chicken”, “Chicken Fillet Master”, and “Tong Yuanji Fried Meat”, and most of them are uniformly decorated in bright yellow and red. There are not many differences in customer orders and sku...

It belongs to the “inner roll” era of fried chicken, and it may even have just begun. In such a market environment, can Xiaohi Aibao get out?

Analysts believe that at a time when the old fried chicken brands have a first-mover advantage, the younger brands may be more dynamic and innovative. Even if they are just starting out, they are not without opportunities.

Zhan Junhao further stated that Xiaohi Aibai requires clear and unique differentiation in terms of brand positioning. First, it can enhance its service characteristics, such as providing customized fried chicken flavor choices, or combining hot pot culture to create unique ways to eat fried chicken. Second, focus on product quality and food safety, and win the trust of consumers by selecting high-quality ingredients and transparent production processes. Finally, strengthen brand image building, enhance brand awareness through social media marketing, cross-border cooperation, etc., and create a brand story with emotional resonance, so that consumers can establish a deeper emotional connection with the brand.