Business Intelligence on Retailing, Franchising, and Consumerism in China

Haidilao To Open Hot Pot Restaurants In America, Singapore In 2012

Chinese hot pot restaurant chain Haidilao plans to open two new outlets in America and two in Singapore in 2012.

A representative from Haidilao revealed that the per capita consumption in Haidilao restaurants in America will be between USD40 and USD50, targeting the medium- and high-end market. Meanwhile, these new restaurants will be located in local mainstream communities, instead of opening in the gathering areas of Chinese people.

To gain the acceptance of American consumers, Haidilao has established a technical department for the overseas market to improve its dishes and to reduce organ-type meats, which is sometimes hard to accept by American consumers.

The representative said that the Chinese taste and the management are the core competitiveness of Haidilao in the American market. For the Chinese market, Haidilao's new restaurants can reportedly earn profits in one year; however, it is still in the searching stage in the overseas market and the company expects to make losses in the initial stage. The company says it is acceptable to make profit in two and half years.

In regards to its internationalization route, Haidilao will first develop the markets in America and Singapore, and it plans to enter Hong Kong and Japan for its next step.

Statistics provided by the hot pot chain showed that its sales in 2011 has reached about CNY2 billion, a year-on-year increase of 25%. The company plans to open 20 new outlets in 2012, mainly locating in first- and second-tier Chinese cities like Beijing, Shanghai, and Nanjing.

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