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China Brands, Marketing & Consumers

Hotpot Chain Haidilao Is Shutting Down Over 300 Restaurants

After adding 544 stores in 2020, Haidilao will close 300 locations this year.

Manya Koetse

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News that China’s most popular hotpot chain is closing down over 300 restaurants became a top trending topic on Chinese social media site Weibo on Friday.

Haidilao (海底捞) made the announcement on Friday evening through a social media post, saying the company will gradually shut down about 300 of its stores. The restaurants that are to be closed are those with relatively low customer traffic and lower-than-expected business performance.

Although the stores will be shut down before December 31 of this year, some of them will potentially reopen at a later date after reorganization. The company also said it would not lay off its staff for now.

Haidilao has approximately 1600 restaurants, of which many were opened in 2020, when the chain added an astonishing 544 new restaurants. In the summer of 2021, Haidilao had a total of 131,084 employees.

It has been over 25 years since Zhang Yong, the owner of Haidilao, set up his first hot pot restaurant in Jianyang, Sichuan, with a mere investment of 10,000 yuan ($1470). It later became the dominant hot pot chain in the country.

Hot pot restaurants, where fresh meat and vegetables are cooked at the table in the simmering broth, are extremely common across China. But Zhang Yong chose to market Haidilao and its authentic Sichuan hot pot with an innovative strategy: high-service, high-tech, and high-quality.

The restaurant is known for giving its customers a free manicure along with snacks and drinks while waiting for a table. The staff is thoroughly trained in providing the best customer service, and Haidilao has introduced new concepts throughout the years to enhance customer experience. People who dine alone, for example, will get a teddy bear to join them. The restaurant also introduced robot waiters and is known for its noodle dancers and staff singing birthday songs whenever there is a birthday celebration.

Want a bear to join you for hotpot? Haidilao’s got you covered.

Over the past two years, however, Haidilao’s table turnover rate shrunk dramatically. The average table turnover rate in 2019 was 4.8 per day, but that number fell to 3 times per day in 2021, with some restaurants only doing 2.3 per day, leading to significant losses for the company’s net profit.

Due to the Covid19 crisis and lockdowns, Haidilao closed its doors in late January of 2020. By mid-March, it started to gradually reopen some of its locations, although they initially offered fewer seats and introduced an increased distance between dining table, that were allowed to have no more than three guests.

Due to the restaurant’s limited tables and increased labor costs, its menu prices went up, much to the dismay of many netizens, who already thought the prices at Haidilao were steep before the pandemic.

In October of this year, the story of a Haidilao customer in Zhengzhou discovering that the 200 grams of tripe he ordered for 72rmb ($11) was actually only 138 grams also went viral on Weibo, stirring discussions on the Haidilao menu prices.

While news about Haidilao closing so many of its stores attracted over 260 million views by Friday night, many commenters agreed that the company should scale down. “The more stores you open, the less you focus on service, the surroundings of the newly opened stores are not up to par, while prices are only rising,” one person wrote on Weibo.

“They’re not making enough money, while their prices were already being pressed down, and still I can’t afford to eat there,” another commenter wrote.

Others also wondered how Haidilao could claim they would not sack their staff while closing down so many stores. “Does that basically mean they’ll wait for them to leave for themselves?”

“When there’s a pandemic, there’s bound to be bad luck [in business],” another commenter writes: “There’s really not much to do about it.”

By Manya Koetse

Spotted a mistake or want to add something? Please let us know in comments below or email us. First-time commenters, please be patient – we will have to manually approve your comment before it appears.

©2021 Whatsonweibo. All rights reserved. Do not reproduce our content without permission – you can contact us at info@whatsonweibo.com.

Manya Koetse is the founder and editor-in-chief of whatsonweibo.com. She is a writer, public speaker, and researcher (Sinologist, MPhil) on social trends, digital developments, and new media in an ever-changing China, with a focus on Chinese society, pop culture, and gender issues. She shares her love for hotpot on hotpotambassador.com. Contact at manya@whatsonweibo.com, or follow on Twitter.

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1 Comment

  1. Avatar

    Jin Wang

    November 6, 2021 at 10:31 am

    with the increase of labor cost in China, only profitable restaurant will be open.
    Restaurant with financial problems will be closed.

    (great website)

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China Brands, Marketing & Consumers

A Brew of Controversy: Lu Xun and LELECHA’s ‘Smoky’ Oolong Tea

Chinese tea brand LELECHA faced backlash for using the iconic literary figure Lu Xun to promote their “Smoky Oolong” milk tea, sparking controversy over the exploitation of his legacy.

Manya Koetse

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It seemed like such a good idea. For this year’s World Book Day, Chinese tea brand LELECHA (乐乐茶) put a spotlight on Lu Xun (鲁迅, 1881-1936), one of the most celebrated Chinese authors the 20th century and turned him into the the ‘brand ambassador’ of their special new “Smoky Oolong” (烟腔乌龙) milk tea.

LELECHA is a Chinese chain specializing in new-style tea beverages, including bubble tea and fruit tea. It debuted in Shanghai in 2016, and since then, it has expanded rapidly, opening dozens of new stores not only in Shanghai but also in other major cities across China.

Starting on April 23, not only did the LELECHA ‘Smoky Oolong” paper cups feature Lu Xun’s portrait, but also other promotional materials by LELECHA, such as menus and paper bags, accompanied by the slogan: “Old Smoky Oolong, New Youth” (“老烟腔,新青年”). The marketing campaign was a joint collaboration between LELECHA and publishing house Yilin Press.

Lu Xun featured on LELECHA products, image via Netease.

The slogan “Old Smoky Oolong, New Youth” is a play on the Chinese magazine ‘New Youth’ or ‘La Jeunesse’ (新青年), the influential literary magazine in which Lu’s famous short story, “Diary of a Madman,” was published in 1918.

The design of the tea featuring Lu Xun’s image, its colors, and painting style also pay homage to the era in which Lu Xun rose to prominence.

Lu Xun (pen name of Zhou Shuren) was a leading figure within China’s May Fourth Movement. The May Fourth Movement (1915-24) is also referred to as the Chinese Enlightenment or the Chinese Renaissance. It was the cultural revolution brought about by the political demonstrations on the fourth of May 1919 when citizens and students in Beijing paraded the streets to protest decisions made at the post-World War I Versailles Conference and called for the destruction of traditional culture[1].

In this historical context, Lu Xun emerged as a significant cultural figure, renowned for his critical and enlightened perspectives on Chinese society.

To this day, Lu Xun remains a highly respected figure. In the post-Mao era, some critics felt that Lu Xun was actually revered a bit too much, and called for efforts to ‘demystify’ him. In 1979, for example, writer Mao Dun called for a halt to the movement to turn Lu Xun into “a god-like figure”[2].

Perhaps LELECHA’s marketing team figured they could not go wrong by creating a milk tea product around China’s beloved Lu Xun. But for various reasons, the marketing campaign backfired, landing LELECHA in hot water. The topic went trending on Chinese social media, where many criticized the tea company.

 
Commodification of ‘Marxist’ Lu Xun
 

The first issue with LELECHA’s Lu Xun campaign is a legal one. It seems the tea chain used Lu Xun’s portrait without permission. Zhou Lingfei, Lu Xun’s great-grandson and president of the Lu Xun Cultural Foundation, quickly demanded an end to the unauthorized use of Lu Xun’s image on tea cups and other merchandise. He even hired a law firm to take legal action against the campaign.

Others noted that the image of Lu Xun that was used by LELECHA resembled a famous painting of Lu Xun by Yang Zhiguang (杨之光), potentially also infringing on Yang’s copyright.

But there are more reasons why people online are upset about the Lu Xun x LELECHA marketing campaign. One is how the use of the word “smoky” is seen as disrespectful towards Lu Xun. Lu Xun was known for his heavy smoking, which ultimately contributed to his early death.

It’s also ironic that Lu Xun, widely seen as a Marxist, is being used as a ‘brand ambassador’ for a commercial tea brand. This exploits Lu Xun’s image for profit, turning his legacy into a commodity with the ‘smoky oolong’ tea and related merchandise.

“Such blatant commercialization of Lu Xun, is there no bottom limit anymore?”, one Weibo user wrote. Another person commented: “If Lu Xun were still alive and knew he had become a tool for capitalists to make money, he’d probably scold you in an article. ”

On April 29, LELECHA finally issued an apology to Lu Xun’s relatives and the Lu Xun Cultural Foundation for neglecting the legal aspects of their marketing campaign. They claimed it was meant to promote reading among China’s youth. All Lu Xun materials have now been removed from LELECHA’s stores.

Statement by LELECHA.

On Chinese social media, where the hot tea became a hot potato, opinions on the issue are divided. While many netizens think it is unacceptable to infringe on Lu Xun’s portrait rights like that, there are others who appreciate the merchandise.

The LELECHA controversy is similar to another issue that went trending in late 2023, when the well-known Chinese tea chain HeyTea (喜茶) collaborated with the Jingdezhen Ceramics Museum to release a special ‘Buddha’s Happiness’ (佛喜) latte tea series adorned with Buddha images on the cups, along with other merchandise such as stickers and magnets. The series featured three customized “Buddha’s Happiness” cups modeled on the “Speechless Bodhisattva” (无语菩萨), which soon became popular among netizens.

The HeyTea Buddha latte series, including merchandise, was pulled from shelves just three days after its launch.

However, the ‘Buddha’s Happiness’ success came to an abrupt halt when the Ethnic and Religious Affairs Bureau of Shenzhen intervened, citing regulations that prohibit commercial promotion of religion. HeyTea wasted no time challenging the objections made by the Bureau and promptly removed the tea series and all related merchandise from its stores, just three days after its initial launch.

Following the Happy Buddha and Lu Xun milk tea controversies, Chinese tea brands are bound to be more careful in the future when it comes to their collaborative marketing campaigns and whether or not they’re crossing any boundaries.

Some people couldn’t care less if they don’t launch another campaign at all. One Weibo user wrote: “Every day there’s a new collaboration here, another one there, but I’d just prefer a simple cup of tea.”

By Manya Koetse

[1]Schoppa, Keith. 2000. The Columbia Guide to Modern Chinese History. New York: Columbia UP, 159.

[2]Zhong, Xueping. 2010. “Who Is Afraid Of Lu Xun? The Politics Of ‘Debates About Lu Xun’ (鲁迅论争lu Xun Lun Zheng) And The Question Of His Legacy In Post-Revolution China.” In Culture and Social Transformations in Reform Era China, 257–284, 262.

Independently reporting China trends for over a decade. Like what we do? Support us and get the story behind the hashtag by subscribing:

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©2024 Whatsonweibo. All rights reserved. Do not reproduce our content without permission – you can contact us at info@whatsonweibo.com.

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China Brands, Marketing & Consumers

Zara Dress Goes Viral in China for Resemblance to Haidilao Apron

Who’s gonna buy this Zara dress in China? “I’m afraid that someone will say I stole the apron from Haidilao.”

Manya Koetse

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A short dress sold by Zara has gone viral in China for looking like the aprons used by the popular Chinese hotpot chain Haidilao.

“I really thought it was a Zara x Haidialo collab,” some customers commented. Others also agree that the first thing they thought about when seeing the Zara dress was the Haidilao apron.

The “original” vs the Zara dress.

The dress has become a popular topic on Xiaohongshu and other social media, where some images show the dress with the Haidilao logo photoshopped on it to emphasize the similarity.

One post on Xiaohongshu discussing the dress, with the caption “Curious about the inspiration behind Zara’s design,” garnered over 28,000 replies.

Haidilao, with its numerous restaurants across China, is renowned for its hospitality and exceptional customer service. Anyone who has ever dined at their restaurants is familiar with the Haidilao apron provided to diners for protecting their clothes from food or oil stains while enjoying hotpot.

These aprons are meant for use during the meal and should be returned to the staff afterward, rather than taken home.

The Haidilao apron.

However, many people who have dined at Haidilao may have encountered the following scenario: after indulging in drinks and hotpot, they realize they are still wearing a Haidilao apron upon leaving the restaurant. Consequently, many hotpot enthusiasts may have an ‘accidental’ Haidilao apron tucked away at home somewhere.

This only adds to the humor of the latest Zara dress looking like the apron. The similarity between the Zara dress and the Haidilao apron is actually so striking, that some people are afraid to be accused of being a thief if they would wear it.

One Weibo commenter wrote: “The most confusing item of this season from Zara has come out. It’s like a Zara x Haidilao collaboration apron… This… I can’t wear it: I’m afraid that someone will say I stole the apron from Haidilao.”

Funnily enough, the Haidilao apron similarity seems to have set off a trend of girls trying on the Zara dress and posting photos of themselves wearing it.

It’s doubtful that they’re actually purchasing the dress. Although some commenters say the dress is not bad, most people associate it too closely with the Haidilao brand: it just makes them hungry for hotpot.

By Manya Koetse

Independently reporting China trends for over a decade. Like what we do? Support us and get the story behind the hashtag by subscribing:

Spotted a mistake or want to add something? Please let us know in comments below or email us. First-time commenters, please be patient – we will have to manually approve your comment before it appears.

©2024 Whatsonweibo. All rights reserved. Do not reproduce our content without permission – you can contact us at info@whatsonweibo.com.

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