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Hotpot Chain Haidilao Is Shutting Down Over 300 Restaurants

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

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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 editor-in-chief of www.whatsonweibo.com. She is a writer and consultant (Sinologist, MPhil) on social trends in China, with a focus on social media and digital developments, popular culture, and gender issues. Contact at manya@whatsonweibo.com, or follow on Twitter.

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1 Comment

1 Comment

  1. 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 Food & Drinks

Adapted to the Desert: This Yurt-Style KFC Opened in Inner Mongolia

Special KFC in Inner-Mongolia: “Is home delivery done by camelback?”

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A KFC restaurant that has opened up in Ordos Prefecture, Inner-Mongolia, is attracting online attention in China for its yurt-style building.

The KFC restaurant is located in Xiangshawan, also known as Whistling Dune Bay, a tourist area – China’s first desert-themed tourism resort – in the Kubuqi Desert.

Some web users praise the fast-food giant for “following local customs” (“入乡随俗”). Others jokingly wonder if their home delivery services are also done by camelback.

Although KFC is not China’s first fast-food restaurant, it is one of the most popular ones. Nowhere else outside of the US has KFC expanded so quickly as in China. Since the first KFC opened in Beijing in 1987, the chain had an average of 50% growth per year.

With thousands of locations across the country, KFC often adapts its restaurants’ style to the local environment. On Weibo, web users share various examples of local KFCs.

A KFC sign at a Fuzhou branch, by Weibo user @渭城朝雨玉清宸.

A KFC in Shanxi province, shared by Weibo user @sheep加水饺.

KFC in Suzhou, by Weibo user @是宜不是宣呀.

KFC in Pingyao, by Weibo user @车谦渊

KFC in Orange Isle, Hunan, by Weibo user @DzDanger_

One Weibo user (@阳山花非花) points out that KFC is not the only chain to adapt to the local environment in Ordos. Chinese fast-food chain Dicos (德克士) apparently also has a special restaurant in the area.

Besides adapting its buildings, KFC is also known to be quite localized in its product offerings. KFC China offers products such as Chinese-style porridge, Beijing chicken roll, and youtiao (deep-fried strip of dough commonly eaten for breakfast).

In 2019, KFC also made headlines in China for adding, among other things, hot and spicy skewers (麻辣串串) to its menu.

For now, the KFC yurt-style location is bound to gain more visitors who are coming to check it out. Already, various Weibo users are sharing their own pics of their KFC visit.

 

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By Manya Koetse (@manyapan)

With contributions by Miranda Barnes

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.

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China Food & Drinks

“There’s a Cockroach in My Hotpot” – ‘Pengci’ Tries to Scam Haidilao Restaurant

Two hotpot cockroaches in one day, but the real cockroach didn’t get away.

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A man in Shenzhen has been arrested after trying to pull a scam in Haidilao hotpot restaurants twice in one day.

The man, Mr Cai (蔡), visited two different locations of China’s Haidilao chain of hotpot restaurants within twenty-four hours, and both times he managed to ‘discover’ a cockroach in his hotpot.

Cai complained to the staff about the roach in his food. According to Sohu.com, in order to keep the peace, both Haidilao stores compensated their unhappy guest; they gave him a free meal and 1000 yuan ($156) and 800 yuan ($124) respectively.

When the restaurants later inspected their security camera footage, they suspected they had been scammed and reported the incident to the police. Further investigation of the security videos revealed that the man actually held the cockroach in his hand, behind his phone, and dropped it on the table, after which he put it in the hotpot together with the vegetables.

When the man scooped the insect out of the hotpot, he immediately called the waiter to show the cockroach in his food.

After being exposed as a ‘pengci‘ (碰瓷), a scammer focused on pretending to a victim in order to get compensation, Cai was detained by the local police.

A similar incident occurred in 2018, when a man named Guo (郭) dropped a dead rat in the hotpot at a Haidilao restaurant, and then demanded a compensation of 5 million yuan ($780,000). That incident also went viral on Chinese social media at the time.

Guo was later sentenced to three years in prison for his scam, for damaging Haidilao’s reputation, and for filing a false report with regulatory authorities.

Also in 2018, a woman claimed she had found a sanitary pad in her Haidilao hotpot. This incident later also turned out to be a scam – the woman had placed the item there herself.

Haidilao is one of China’s most famous hotpot brands, and its restaurants have been in business for over 25 years. The restaurant is known for its good service, quality, and cleanliness.

On Weibo, the Haidilao ‘cockroach incident’ is attracting a lot of attention today, with one hashtag page regarding the issue receiving over 230 million views (#男子在海底捞自导自演吃出蟑螂#).

Although scams such as these are not uncommon, many people are surprised that someone would still attempt to fraud Haidilao in this way in 2021, when there are cameras set up everywhere in the restaurant.

Haidilao’s surveillance cameras have become a topic of discussion on social media before. The restaurant’s alleged reason for putting up so many cameras is in order to take better care of their customers, to monitor employee service standards, and to rely on their security footage when personal belongings go missing. The cameras also register the entire hotpot dining process; if something comes up in the hotpot that is not supposed to be there, the cameras will have captured how it ended up there.

“In this case, it’s good that there are so many security cameras,” one commenter writes.

Many others scold Cai for trying to scam Haidilao like this: “They should really make him eat cockroaches.”

 

– By Manya Koetse (@manyapan)

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.

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