Chinese hot pot chain Haidilao said it will focus on expanding further into established foreign markets in the coming years, notably the US, working to draw new customers as diners at home pull back on spending.
Super Hi International Holding Ltd., the operator of Haidilao’s overseas business, will unveil more outlets in New York and Los Angeles as soon as next year, Chief Executive Officer Yang Lijuan told Bloomberg in an interview in Singapore, with the US market providing the "biggest potential” globally.
"The overseas market is big enough that we don’t see any ceilings or limitations,” she said. "We can cultivate the market bit by bit.”
Haidilao has one of the biggest international footprints among Chinese food and beverage chains, with restaurants in high-profile spots including London’s Piccadilly, Dubai Mall and Singapore’s Marina Bay Sands.
It’s one of the popular mainland eateries looking toward foreign growth to offset an increasingly saturated and competitive dining scene at home, with price wars breaking out to lure budget-conscious Chinese consumers. They include bubble tea brands Mixue and Heytea, which are also expanding globally, including in Southeast Asia and Western countries.
Super Hi’s push to shore up its foreign business comes as the hotpot chain’s domestic arm, Haidilao International Holding Ltd., slowed its Chinese expansion in recent years following unprecedented losses at the height of Covid. Haidilao shuttered 39, or about 3%, of its restaurants in Greater China by the end of June from the previous year, and average spending per guest continues to drop, reflecting weakening consumption among Chinese who once readily splashed out on meals.
Super Hi’s international profits have long relied on the Chinese diaspora. But if the brand wants to try and expand even further, they’ll need to lure diners who aren’t Chinese - or familiar with the concept of hot pot. The chain plans to change up offerings at some foreign branches to cultivate a wider customer base, Yang said, including a current trial run of halal fare in Southeast Asian countries, some of whom have large Muslim populations.
Eventually, she said, Super Hi plans to look even further abroad, and is considering potential future markets like Switzerland, Germany, Spain and France, though she didn’t give a time frame.
Super Hi’s Hong Kong-listed shares and Haidilao International both rallied in the first half of this year, buoyed by expectations that authorities would provide strong policy support to shore up the Chinese economy.
Haidilao International has since lost those gains, dropping 13.2% since the start of 2024 as of Tuesday. While Super Hi also pared gains, it’s still up 10.7%, signaling investors’ relative confidence in its overseas expansion. The operator listed in the US earlier this year.
Super Hi, which opened its first foreign restaurant in Singapore in 2012, had 122 outlets in 13 countries outside China as of June. Like many Chinese catering brands who’ve gone global, a significant portion of its revenue comes from Southeast Asia, whose 74 eateries accounted for more than half of Super Hi’s total sales in the first half of this year. The company also operates 20 restaurants in North America, which chips in more than 16% of revenue.
Yang was named Super Hi’s CEO in June, after a decades-long career with Haidilao that’s seen her move from local waitress to head of the brand’s domestic business. She was also a driving force behind establishing the chain’s first overseas restaurants. - Bloomberg
