Haidilao

Haidilao International Holding Ltd., operating as Haidilao (), is a chain of hot pot restaurants founded in Jianyang, Sichuan, China in 1994. Its restaurants typically operate under the name Haidilao Hot Pot. It is the largest hotpot chain in China and has expanded overseas. As of 2022, Haidilao had around 1,300 restaurants in mainland China, Hong Kong, and Taiwan, with its overseas unit, Super Hi International, running 97 outlets around the world, including in Singapore, the UK, and the United States. Their annual revenue is estimated to be more than CN¥10 billion.

History

Etymology

In Mandarin, ''haidilao'' can be translated as deep-sea fishing, or literally "scooping the bottom of the ocean." The origin of this term comes from a Chinese idiom, ''hǎidǐlāoyuè'' (海底捞月, lit. "fishing for the moon"), a metaphor for a hopeless endeavor. This idiom was originally derived from the Chinese Taoist poem Song of Enlightenment (永嘉证道歌). The term ''haidilao'' is also used by mahjong players to refer to a rare and lucky situation when a player wins with the last tile.

Background

Zhang Yong is the founder of Haidilao, and in March 1994, opened the first Haidilao hot pot restaurant along with three other founders with 8,000 Yuan in Jianyang, Sichuan Province. Hotpot is a popular dish in Sichuan, with many hotpot restaurants operating in the area. Haidilao grew competitively with an emphasis on customer service. After five years, Haidilao started to expand beyond Sichuan to other provinces like Xi'an, Shanxi province and other parts of the world.

In 2018, Haidilao Hot Pot served more than 160 million customers, with an average daily table turnover rate (i.e. the number of parties hosted per table per day) of 5.0. Haidilao Hot Pot has more than 36 million VIP members and 60,000+ staff.

In more than 20 years of operation, Haidilao has received multiple awards and certifications, both domestically and internationally.

Global expansion

Haidilao has more than 180 chains globally, more than 20,000 staff, and an annual turnover of 5 billion RMB (almost US$0.77 billion).

By the end of June 30, 2020, Haidilao Hot Pot had 935 stores in operation. In addition to the many locations in China, the company serves the areas of Hong Kong, Malaysia, Singapore, Australia, Taiwan, United Kingdom, Canada, United States, Thailand, Indonesia, Vietnam, South Korea, and Japan.

The company opened its first restaurant outside of mainland China in Clarke Quay, Singapore, in 2012. This was followed by its first US outlet, which opened in Westfield Santa Anita (California) in September 2013. Haidilao continued to develop its network abroad, entering the South Korean market in 2014, the Taiwanese and Japanese markets in 2015, and the Hong Kong market in 2017.

IPO

In 2008, Haidilao planned to increase $600 million to $700 million in the Hong Kong IPO which could increase the popularity in the global market.

In 2017, Haidilao's net profit rose 22% to 1.19 billion yuan, and revenue increased 36% to 10.64 billion yuan.

In 2018, Haidilao raised nearly US$1 billion in a Hong Kong initial public offering (IPO). The IPO figures show that even though Haidilao faced some safety issues over the past two years, investors are still feeling positive of Haidilao growth in the future.

Founded as a privately held company, Haidilao International Holding Ltd. filed to launch an initial public offering (IPO) in Hong Kong in 2018, aiming to raise up to US$700 million for further expansion.

As of 2018, Haidilao's IPO price of 17.80 Hong Kong dollars a share makes its market capitalization $12 billion.

Brand concepts

Haidilao's concept is different when compared with other traditional Chinese hotpot restaurants in various aspects.

# Customers can select their hotpot soup base(s) from a variety of different flavor options.
# Some Haidilao restaurants have automated kitchens with robot chefs to increase efficiency.
# Some Haidilao restaurants have robots for food delivery.
# Haidilao is known for its unique array of services and amenities provided before, after, and during the meal.

Special services

Haidilao enforces strict rules when selecting food suppliers. Various sources of recipes are added every year. There are more than 20 dipping sauces on Haidilao's self-service condiment table. Side dishes like peanuts, cucumbers, and fresh food are always provided. Haidilao provides authentic Sichuan-style hotpot, and customers can pick four different soup bases in one pot, which is called a 4-broth pot.

In 2013, Haidilao developed a new new videoconference service where customers could see each other by using video conference facilities and remotely videoconference with customers at other Haidilao restaurants.

"Hi to send" service

Haidilao created the “Hi to send” delivery service in 2003. When staff send hotpots to customers’ homes, they wear shoe covers and help customers to divide their food. They will wait outside until customers finish their food, after which they will take away the kitchenware. Since 2013, Haidilao is open for 24 hours a day and offers service of delivery food. Once a customer orders food to be delivered, staff will send an electromagnetic pan, an induction cooker, a wiring board to customers’ home.

Services

Services provided by Haidilao can be divided into three categories: (1) before eating; (2) during eating; (3) after eating.

(1) Before eating

Haidilao's employees welcome customers. Every Haidilao restaurant has a waiting room for customers. The waiting room has different sections for different services. For instance, Haidilao restaurants have its own nail salon with hand massages and manicure service. As for children, Haidilao has a parent-child section which is an indoor children's play area with facilities. Additional free before-meal services and amenities include a car wash, fruits, snacks, drinks, and board games.

(2) During meal

A hot towel is provided to wipe one's hands when customers are seated. Different beverages are provided to different customers. Members of staff offer an apron and mobile phone bag for free during the eating process, and provide small hairpins for long-haired customers. After the staff introduce themselves, the customers’ name and birthday gets recorded in the system. Haidilao provides gifts during the customer's birthday. People who are old, pregnant, and young get special care from employees. If customers are celebrating a birthday party or wedding ceremony at Haidilao, they get a special gift. While eating at the dining area, customers can experience the Chinese culture through Sichuan's characteristic face-changing performance, as well as hand-pulled noodles performances. In China, hotpot is usually enjoyed by groups of people.

(3) After eating

After a customer has finished eating, the staff provides free snacks and fruits, as well as mints and toothpicks.

For people who order via the online store, Haidilao provides service to help the customers clean their facilities and return their tableware.

Development

In founder Zhang Yong's words, “Haidilao imported standards to the kitchen from America, which means that Haidilao can control the warehouse’s temperature, washing machines replaced labor, and also a modern distribution system.”

Haidilao and Panasonic jointly launched a "smart" restaurant in 2018. This smart restaurant relies on Panasonic's robotics and image recognition technology to achieve full automation of the kitchen. After the customer orders the food with tablet computer (iPad), the system in the kitchen can automatically recognize the dishes and puts them into the tray. The low temperature status of the automatic food store is effective in ensuring food hygiene, and automated meal replacement can eliminate human error. The system can also read the label information on the plate, accurately manages the type of dishes, the time of loading, the shelf life and other data to ensure food safety. In 2019, Haidilao opened the first robot-aided hotpot restaurant in Beijing.

Controversies

Kitchen hygiene

On August 25, 2017, kitchen hygiene problems were reported from the Legal Evening News in the restaurants of Beijing Jinsong and Taiyanggong. A video of rat lying on the sink was uploaded to Weibo, a Chinese social media platform. After three and a half hours, Haidilao posted an apology letter about the hygiene issues.

Haidilao indicated that all stores need to have a “bright kitchen” which means that the kitchen is now visible to all customers thanks to the installment of transparent glass and opening up of the space for visibility to all.
# Haidilao welcomes all customers, media and management department to monitor Haidilao in order to comply with local laws and regulations.
# The board of Haidilao will take the primary responsibility for this hygiene crisis in two stores.

The Beijing Municipal Food and Drug Administration had two meetings with the representatives of this Haidilao's hygiene problem and required Haidilao to make rectification to their cleanliness, resulting in the requirement that all stores in Beijing would need to be inspected within one month.

In 2022, The Food Standards Agency gave the hygiene rating of "0 - Urgent Improvement necessary" to the chain in Birmingham UK. .
Adding the FSA food rating.

Price hikes

On March 12, 2020, Haidilao reopened many stores after the COVID-19 situation in mainland China improved. However, customers were shocked by the price hikes; some even stated online that they would not go back to Haidilao again. After customer complaints, a Haidilao representative stated that price increases would be limited to 6%, with each restaurant being able to define their own prices.

Porn video exposure crisis

On the afternoon of January 5, 2019, a Haidilao restaurant located in Wuhan Great Ocean mall suddenly played a pornographic video on the restaurants’ TV screen. One customer shared an image of the video on Weibo, where it has been retweeted more than 240 million times. Staff immediately turned off the screen after noticing the video. According to Chutian Metropolis Daily, this accident happened at 3 pm. When the reporter came to the location at 7 pm which is the peaking time for dinner, the TV screen remained switched off. On January 6, Haidilao posted an official apology on Weibo.

COVID-19 pandemic

During the COVID-19 pandemic, on January 26, 2020, Haidilao closed all stores in mainland China to decrease the spread of the virus. On March 12, 2020, with cases decreasing in China, Haidilao began reopening stores.

However, even after reopening, business was slow: patrons chose other options like takeaway over the communal hot pot dining experience. Haidilao also faced backlash for increasing prices to offset pandemic losses, and the amount of people restaurants could serve was limited by government pandemic restrictions.

In 2021, as part of an expansion plan, Haidilao opened 421 new restaurants, but it also closed 276 in an effort to improve the operations and profitability of existing stores''.''

In 2022, in the wake of China's zero-COVID policy, Haidilao's shares fell more than 60%. Haidilao is focusing on expanding its international presence, spinning off its overseas unit, Super Hi International.

Awards and certifications

Haidilao Hot Pot has won more than ten titles and honors such as “Advanced Enterprise”, “Consumer satisfaction unit” and “Famous Hot Pot” in Sichuan, Shanxi, Henan and other provinces in China. From 2008 to 2012, it won the title of “Top 10 Hot Pot Restaurants” by the public comment website for 5 consecutive years in China. At the same time, it won the honorary title of “Top 100 Chinese Catering Enterprises” for 5 consecutive years. Haidilao became a successful business case of Harvard Business School in 2009. On May 27, 2011, “Haidilao” trademark was awarded “ China Famous Brand”. Since 2007 up until 2018, the hot pot restaurant has won the "China Top 100 Catering Companies" for 12 consecutive years. Haidilao won the “Best Hot Pot”, “Outstanding Service,” or “Outstanding Chinese Restaurant of the Year.” prizes in magazines such as Time out and Beijinger in 2018.

See also

* List of Chinese restaurants
* Chinese restaurant
* Sichuan cuisine
* Hot pot

References

Further reading

*

External links

*
Chinese Haidilao official website

{{coord missing, Sichuan

Restaurant chains in China
2018 initial public offerings
Chinese companies established in 1994
Restaurants established in 1994
Companies listed on the Hong Kong Stock Exchange
Companies based in Sichuan
Sichuan cuisine