HAIDILAO increases investment in barbecue business

Author | Zheng Qiao Editor | Zhou Zhiyu Even while enjoying a barbecue, you can also get your hair washed and braided. The popular internet celebrity dining enterprise Haidilao is up to its antics again. Recently, the barbecue brand "Yanqing Barbecue Shop" under the Haidilao Group opened a store in Yiwu, marking its first foray into markets outside Xi'an. According to Wall Street News, its stores in cities such as Hangzhou, Nanjing, and Xi'an will also be opening one after another in the near future. This indicates that after exploring a viable business model for barbecue in Xi'an, Haidilao's barbecue business is now entering a phase of accelerated expansion. At the end of last year, Haidilao opened its first Yanqing Barbecue Shop in Xi'an, which quickly rose to the top of Dianping's barbecue ratings within a month. However, as of the end of June this year, it only had 2 stores, both in Xi'an. By launching the barbecue brand, Haidilao is optimistic about the growth potential of the barbecue market and hopes to expand its market and attract new customers. This also cleverly avoids direct competition with its own hotpot business. As a fusion barbecue brand under the Haidilao Group, "Yanqing" focuses on beef products, with an average consumption of around 100-110 yuan per person, similar to the price range of Haidilao hotpot. Signature dishes include Xishi scrambled eggs with beef, yellow peach beef ribs, pickled cabbage pork belly, and fish roe shrimp paste. In addition, Yanqing has also introduced a series of innovative fusion dishes, such as cheese-baked sweet potatoes, cheese-baked durian, sweet and spicy stir-fried rice cakes, and Myeongdong fried chicken. Many consumers also visit the store directly for the "hair washing" service. Yanqing inherits Haidilao's distinctive service, providing personalized services including free hair washing and braiding, continuing the innovative service genes of Haidilao. As a popular category in recent years, the search popularity of barbecue sometimes even surpasses that of hotpot. According to Qichacha data, as of August 6, 2024, there are 123,300 barbecue-related companies in China. Since 2019, the number of barbecue-related companies has continued to grow, with stock levels increasing by 23.3%, 12.2%, and 12.7% year-on-year from 2019 to 2021, reaching 88,700, 99,500, and 112,100 companies respectively. This growth trend indicates that the barbecue industry still has significant development potential. Benefiting from Haidilao's synergies and scale advantages, Yanqing Barbecue Shop has a supply chain advantage in key ingredients such as meat procurement. Haidilao has established a sound supply chain system and effectively ensured the quality and quantity of meat supply through its self-production and self-sales model. Wall Street News learned from industry insiders that the investment in a single Yanqing Barbecue Shop is approximately a few million yuan. Haidilao has stated that the purpose of establishing these new brands is to encourage employees to explore new models and to provide customers with more diverse, richer, and more cost-effective choices Previously, Haidilao also implemented a dual-store model, allowing outstanding store managers to simultaneously manage another Haidilao store or a different store under another entrepreneurial brand owned by Haidilao. It is understood that currently, about twenty to thirty stores have adopted this model. In recent years, facing intensified market competition and diversified consumer demands, Haidilao has launched multiple dining sub-brands ranging from fast food to high-end pubs, and even to barbecue brands, continuously expanding its business diversification in the catering market and seeking new growth points. Financial report data shows that in 2023, Haidilao's total revenue reached 41.453 billion RMB, a year-on-year increase of 33.6%. At the same time, net profit reached 4.495 billion RMB, a year-on-year increase of 174.6%. Despite achieving steady performance growth in its main brand, the development of its sub-brands has not been smooth sailing. Haidilao has introduced multiple sub-brands such as "Bai Fu Private Noodles," "New Qin Style Noodle House," "Eighteen Hotpots," "Lao Pai You Mian Er," focusing on fast food noodles, standardized products, self-service mode, and extreme cost-effectiveness. However, by 2022, some sub-brands like "Qiao Qiao's Noodles" and "Bai Fu Private Noodles" have already closed down. Some analysts point out that Haidilao Group's expansion in the barbecue market is still in the preliminary exploration stage. Although consumers have shown novelty towards its newly opened barbecue restaurants, the core competitiveness in the barbecue industry still lies in the quality of meat and taste. Whether Haidilao can tell a story of consumption upgrade and service premium in its barbecue business is also a focus of attention for the market and consumers