Haidilao

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Haidilao International Holding Ltd.
TypePublic
IndustryRestaurants, foodservice
Founded20 March 1994; 27 years ago (1994-03-20)
FounderZhang Yong
Number of locations
~1600[1]
Area served
China, Hong Kong, Macau, United States, Canada, United Kingdom, South Korea, Australia, Japan, Taiwan, Malaysia, Singapore, Indonesia, Thailand, Vietnam
Total assetsCN¥20.61 billion (2019)
Number of employees
60,000[1]
Websitewww.haidilao.com
Haidilao International Holding Ltd.
Simplified Chinese海底捞国际控股有限公司
Traditional Chinese海底撈國際控股有限公司
Haidilao Hot Pot
Simplified Chinese海底捞火锅
Traditional Chinese海底撈火鍋
A Haidilao restaurant in Suzhou, China
Haidilao self service sauce bar.
Food layout at Haidilao

Haidilao International Holding Ltd., doing business as Haidilao (Chinese: 海底捞; pinyin: Hǎidǐlāo), is a chain of hot pot restaurants founded in Jianyang, Sichuan, China in 1994.[2] Its restaurants typically operate under the name Haidilao Hot Pot. It is the largest hotpot chain in China which is widespread through spicy broths and special services.[3] With the expansion of Haidilao, there are also many chain restaurants located overseas, such as in London and New York City.[3] Their annual revenue is estimated to be more than CN¥10 billion.

History[]

Early story and findings[]

The name of the company originates from a mahjong term, haidilao, literally meaning "deep sea dredging", analogous to the act of completing a mahjong winning hand on picking up the last available tile in the game.[4] This is very rare and considered very lucky.[4]

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.[5] Sichuan is a place where people have hotpot often, which means there are many hotpot restaurants in the Sichuan area.[5] However, Haidilao is competitive in a different way.[5] Haidilao is not based on the flavor and excellence of the food, but rather, the competitive advantage that the chain holds is based on their customer service.[5] For example, there was an instance where a customer came with dirty shoes, and Mr Zhang asked the staff to shine the customer's shoes.[5] Although customers might not think Haidilao's flavor is the best, they still come for the special services.[5] After five years, Haidilao started to expand beyond Sichuan to other provinces like Xi'an, Shanxi province and other parts of the world.[5]

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.[6]

Running for more than 20 years, Haidilao has received multiple awards and certifications, both domestically and internationally.

Global Expansion[]

Haidilao branch in Sunway Pyramid, Malaysia

With the rapid development of Haidilao, it has achieved more than 180 chains globally, more than 20,000 staff, and an annual turnover of 5 billion RMB (almost US$0.77 billion).[7]

By the end of June 30, 2020, Haidilao Hot Pot had 935 stores in operation.[8] In addition to the many locations in China, the company is serving in the areas of Hong Kong, Malaysia, Singapore, Australia, Taiwan, United Kingdom, Canada, United States, Thailand, Indonesia, Vietnam, South Korea, and Japan.[9]

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.[10][11] 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.[8]

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.[12]

In 2017, Haidilao's net profit rose 22% to 1.19 billion yuan and revenue increased 36% to 10.64 billion yuan.[9]

In 2018, Haidilao raised nearly US$1 billion in a Hong Kong initial public offering (IPO).[13] The IPO figures show that even though Haidilao faced some safety issues over the past two years, investors are still feeling positive of Haidilao's growth in the future.[13]

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.[9][14]

As of 2018, Haidilao's IPO price of 17.80 Hong Kong dollars a share makes its market capitalization $12 billion.[15]

Brand concepts[]

Haidilao's concept is different when compared with other Chinese traditional hotpot in many aspects.[16]

  1. Customers can select their flavor of the different soup and enjoy the cooking experience.[16]
  2. Haidilao provides automatic kitchen in the restaurant, which could increase the efficiency of its operation.[3]
  3. Haidilao provides robots which are responsible for food delivery.[17]

Special service[]

Haidilao has a very strict rule when selecting food suppliers.[18] Various sources of recipes are added every year.[18] 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 new services where customers could see each other by using video conference facilities and remotely videoconference with customers at other Haidilao restaurants.[19]

"Hi to send" service[]

Haidilao created the “Hi to send” delivery service in 2003.[7] When staff send hotpots to customers’ homes, they wear shoe covers and help customers to divide their food.[7] They will wait outside until customers finish their food, after which they will take away the kitchenware.[7] Since 2013, Haidilao opens for 24 hours a day and offers service of delivery food.[20] Once customer orders delivery food, staff will send an electromagnetic pan, an induction cooker, a wiring board to customers’ home.[20]

Staff Service Creativity for Customer[]

Service in the restaurant is divided into three processes: (1) before eating; (2) during eating; (3) after eating.

(1) Before eating

Haidilao's employees will welcome customers warmly.[7] Every Haidilao restaurant has a waiting room for customers.[7] The waiting room has different sections that satisfy customers with various needs.[7] To respect women's nature of loving beauty, Haidilao provides hand massages and manicure service.[7] As for children, Haidilao also has a parent-child paradise, an indoor children's play area with facilities.[7] Service before eating includes several free services like a car wash, fruits, snacks, drinks, nail salons and board games.[16]

(2) During eating

A hot towel is provided to wipe one's hands when customers are seated.[16] Different beverages are provided to different customers.[7] Members of staff will also offer an apron and mobile phone bag for free during the eating process, and provide small hairpins for long-haired customers.[16] After the staff introduce themselves, the customers’ name and birthday will also get recorded in the system. Haidilao will provide gifts during the customer's birthday.[16] People who are old, pregnant, and young will get special care from employees.[7] If customers are celebrating a birthday party or wedding ceremony at haidilao, they will get a special gift.[7] 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.[21] In China, hotpot is usually enjoyed by groups of people.[22]

(3) After eating

After a customer has finished eating, the staff will provide free snacks and fruits, as well as mints and toothpicks..[16]

For people who order via online store，Haidilao also provides service to help clean their facilities and return their tableware.[19]

Haidilao hot pot table.

Development[]

Zhang Yong said that “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.” [5]

HaiDiLao and Panasonic jointly launched a "smart" restaurant in 2018.[23] This smart restaurant relies on Panasonic's robotics and image recognition technology to achieve full automation of the kitchen.[23] 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.[23] 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.[23] In 2019, Haidilao opened the first robot-aided hotpot restaurant in Beijing.[24]

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.[5] A video of rat lying on the sink was uploaded to social media platform Weibo.[5] After three and a half hours, Haidilao posted an apology letter about the hygiene issues. [5]

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 instalment of transparent glass and opening up of the space for visibility to all.[25]

  1. Haidilao welcomes all customers, media and management department to monitor Haidilao in order to comply with local laws and regulations (Wu, 2017).
  2. The board of Haidilao will take the primary responsibility for this hygiene crisis in two stores.[25]

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.[5]

Price Hikes[]

HaiDiLao reopened many stores after the improvement in the COVID-19 situation..[26][27] However, several customers were shocked and confused by the hike in prices. [26] Some customers online even stated that they will not go back to HaiDiLao again due to the increased prices.[26] After customers' complaints, the representative of HaDiLao stated the current price will only be limited to within 6% of the previous price.[26] Every restaurant can select their price hikes based on different locations.[26]

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.[28] 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.[28] When the reporter came to the location at 7 pm which is the peaking time for dinner, the TV screen remained switched off.[28] On January 6, HaiDiLao posted an official apology on Weibo.

COVID-19 pandemic[]

Under the COVID-19 pandemic situation, to decrease the spread of the virus, Haidilao closed all stores in mainland China on Jan, 21.[27] With the decreasing cases of the virus, since Mar 12, Haidilao reopened many stores, and more than 600 restaurants have reopened.[27] China securities company predicted that there will be a 5.04 billion yuan ($716 million) loss for Haidilao due to COVID-19.[26] Haidilao's 2019 annual report shows that there is an obvious decline in the table's turnover rate and same-store sales rate.[29] Table's turnover rate has decreased from 5.0 times a day in 2018 to 4.8 times a day.[29] Same-store sales rates in both first and second-tier cities dropped from 4.3% to 1.9%.[29]

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.[18] Haidilao became a successful business case of Harvard Business School in 2009.[7] 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.[8] 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.[18]

See also[]

References[]

  1. ^ a b "海底捞".
  2. ^ "Hotpot giant Haidilao set to enter Hong Kong soon". China Daily. 17 February 2017. Retrieved 25 August 2017.
  3. ^ a b c Feng, Venus (2019-04-16). "Spicy hotpot has made Chinese couple $7.8b richer this year". The Sydney Morning Herald. Retrieved 2020-11-11.
  4. ^ a b "Spice of success". China Daily. 4 March 2011. Retrieved 25 August 2017.
  5. ^ a b c d e f g h i j k l Shu, Chengli; Zheng, Shaoting (2019), China Europe International Business School (ed.), "Haidilao's Crisis Management: Threats, Opportunities and Corporate Values", China-Focused Cases, Singapore: Springer Singapore, pp. 183–194, doi:10.1007/978-981-13-2706-3_10, ISBN 978-981-13-2705-6, retrieved 2020-11-11
  6. ^ "海底捞年收入做到 100 亿，一个以市场扩张为战略的火锅店会有什么风险_商业_好奇心日报". www.qdaily.com. Retrieved 2019-06-21.
  7. ^ a b c d e f g h i j k l m Liu, Yan-Hong; Jie, Xiao-Wen (2017). "Exploring Haidilao Service Creativity: The Perspective of Maslow's Hierarchy of Needs". Proceedings of the 2017 2nd International Conference on Humanities and Social Science (HSS 2017). Shenzhen, China: Atlantis Press: 534–538. doi:10.2991/hss-17.2017.93. ISBN 978-94-6252-316-6.
  8. ^ a b c "haidilao". www.haidilao.com. Retrieved 2020-10-28.
  9. ^ a b c Chiu, Joanne (10 September 2018). "Hong Kong's Hot-Pot IPO: A Chinese Chain Serving Pig Brains and Giving Manicures". Wall Street Journal. Retrieved 2018-09-12.
  10. ^ "Hai Di Lao, Chinese Hot Pot Chain, Plans To Bring 'Noodle Dance' To The U.S." Huffpost. Huffington Post. 22 May 2013. Retrieved 25 August 2017.
  11. ^ Burkitt, Laurie (22 May 2013). "Chinese Hot Pot Chain Hai Di Lao Makes Move to U.S." Wall Street Journal. Retrieved 2018-09-12.
  12. ^ Lehrmann, Teagan (2015), "Catering Business, Off-Site", The SAGE Encyclopedia of Food Issues, 2455 Teller Road, Thousand Oaks, California 91320: SAGE Publications, Inc., doi:10.4135/9781483346304.n69, ISBN 978-1-4522-4301-6, retrieved 2020-11-17CS1 maint: location (link)
  13. ^ a b "Chinese hotpot chain Haidilao raises nearly $1 billion in IPO". CNBC. 2018-09-18. Retrieved 2020-11-18.
  14. ^ Zhu, Julie. "Haidilao to tap demand for Chinese hotpot with up to $700 million..." Reuters. Retrieved 2018-09-01.
  15. ^ Chiu, Joanne (18 Sep 2018). "Chinese Hot-Pot Chain Serves Up $963 Million IPO; Haidilao's $12 billion market capitalization is bigger than that of Domino's Pizza". Wall Street Journal – via ProQuest.
  16. ^ a b c d e f g Zhang, Zhiyuan; Xu, Lijuan (July 2016). "The research of service innovation on the base of catering service process — Taking HaiDiLao as an example". 2016 International Conference on Logistics, Informatics and Service Sciences (LISS). Sydney, Australia: IEEE: 1–6. doi:10.1109/LISS.2016.7854470. ISBN 978-1-5090-1102-5. S2CID 18702518.
  17. ^ Wang, Jing; Cheng, Lijuan (July 2012). "The relationships among perceived quality, customer satisfaction and customer retention: An empirical research on Haidilao restaurant". Icsssm12. IEEE: 749–754. doi:10.1109/icsssm.2012.6252340. ISBN 978-1-4577-2025-3. S2CID 21408534.
  18. ^ a b c d "HAIDILAO: TAKING CHINESE HOTPOT TO THE NEXT LEVEL | Hotpot Ambassador". Hotpot Ambassador. 2018-11-20. Retrieved 2020-11-18.
  19. ^ a b "Haidilao Hot Pot's Success". Technology and Operations Management. Retrieved 2020-12-03.
  20. ^ a b Chen, Chen; Shen, Huawen; Fan, Daisy X.F. (2015-07-03). "Hai Di Lao Hot Pot: From Employee Stimulation to Service Innovation". Journal of China Tourism Research. 11 (3): 337–348. doi:10.1080/19388160.2015.1082526. ISSN 1938-8160. S2CID 153842151.
  21. ^ Chen, Elsie; 黄瑞黎2018年9月26日 (2018-09-27). "海底捞赴港上市，它能征服海外食客吗？". 纽约时报中文网 (in Chinese). Retrieved 2019-06-20.
  22. ^ Huang, Echo. "Here are the bizarre services you can get from China's trendiest hotpot restaurant". Quartz. Retrieved 2020-11-18.
  23. ^ a b c d "海底捞和松下联合推出智能餐厅-新华网". www.xinhuanet.com. Retrieved 2019-06-19.
  24. ^ "Robots staff China's top hotpot chain". BBC News. Retrieved 2020-11-18.
  25. ^ a b Wu, Jing (2018). "Figuring out Zhangyong's Leadership Style by His Way of Handling the Crisis in Haidilao Jinsong and Sun Palace Stores". Proceedings of the 2nd International Conference on Humanities Science and Society Development (ICHSSD 2017). Paris, France: Atlantis Press. doi:10.2991/ichssd-17.2018.64. ISBN 978-94-6252-440-8.
  26. ^ a b c d e f "Haidilao hikes prices due to coronavirus - China.org.cn". www.china.org.cn. Retrieved 2020-11-18.
  27. ^ a b c Zhang, Bonnie (2020-03-27). "Hot Pot Chain Haidilao Reveals 2019 Financial Results, Looks To Further Expand in 2020". Pandaily. Retrieved 2020-11-18.
  28. ^ a b c "Whoops! Porn Surprises Diners at Wuhan Hot Pot Restaurant". That's Online. Retrieved 2020-11-18.
  29. ^ a b c Grigorian, Greg (2020-04-13). "Haidilao Apologizes for Price Hike After Reopening". Pandaily. Retrieved 2020-11-18.

Further reading[]

External links[]

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