FX168 Financial News (Asia Pacific) News A well-known Chinese hot pot company “Haidilao” (Haidilao) said that in the next few years it will focus on further expanding mature overseas markets, especially the US, in an effort to attract new customers as Chinese domestic diners reduce their consumption. The company notes that it will open more stores in New York and Los Angeles as early as 2025.
Yang Lijuan, CEO of Haidilao's global operator Super Hi, mentioned in an interview with Bloomberg in Singapore that the company will open more stores in New York and Los Angeles as early as next year because the US market has “the greatest potential” globally. “The overseas market is big enough that we don't see any ceilings or restrictions,” she said. “Little by little, we can nurture the market.”
(Source: Bloomberg)
According to reports, Haidilao is one of the Chinese restaurant chains with the greatest international influence. Its restaurants are spread all over famous places such as Piccadilly in London, the Dubai Mall, and Marina Bay Sands in Singapore. It is one of China's most popular food and beverage brands. They hope to offset the increasingly saturated and competitive impact of the domestic restaurant market through overseas expansion, and launch a price war to attract budget-conscious Chinese consumers. These brands include the bubble tea brands Mi Xue and Hi Cha, which are also expanding globally, including Southeast Asia and Western countries.
(Source: Bloomberg)
As Super Hi strives to consolidate overseas operations, Haidilao International Holding Ltd. (Haidilao International Holding Ltd.), a domestic subsidiary of the hotpot chain, has slowed its expansion in China in recent years due to unprecedented losses during the worst period of the pandemic. By the end of June, Haidilao had closed 39 restaurants in Greater China, accounting for about 3% of the same period in 2023. The average consumption per customer continued to decline, reflecting the weakening spending power of Chinese people who were once willing to spend a lot of money to eat.
Super Hi's international profits have long depended on the Chinese. But if the brand wants to expand further, they need to attract non-Chinese diners, or those unfamiliar with the hot pot concept. Yang pointed out that the chain plans to change the supply at some foreign branches to cultivate a wider customer base, including currently piloting halal food in Southeast Asian countries, some of which have large Muslim populations.
She said that Super Hi ultimately plans to look overseas and is considering potential future markets such as Switzerland, Germany, Spain, and France, but she did not give a specific time frame.
In response to market expectations, China will provide strong policy support to support the Chinese economy. Chaohai Holdings' Hong Kong-listed shares and Haidilao International's stock prices both rose in the first half of this year.
Haidilao International has since lost these gains and has declined by more than 13% since the beginning of 2024. Although Super Hi has also curtailed gains, it is still up more than 10%, indicating that investors are relatively confident in its overseas expansion. The operator went public in the US earlier this year.
Back in 2012, Super Hi opened its first foreign restaurant in Singapore. As of June this year, Super Hi has opened 122 stores in 13 countries outside of China. Like many overseas Chinese restaurant brands, a large portion of the company's revenue comes from Southeast Asia. In the first half of this year, 74 Southeast Asian restaurants accounted for more than half of Super Hi's total sales. The company also operates 20 restaurants in North America, contributing more than 16% of its revenue.
Yang was appointed CEO of Super Hi in June of this year. Prior to that, she worked in Haidilao for decades and grew from a local waiter to head of the brand's domestic business. She was also the driving force behind the chain's first overseas restaurant.