Chinese hot pot chain eyes US

From modest beginnings in the Sichuan Province in 1994, Chinese hot pot chain Haidilao now aims to expand foreign markets, starting with Singapore and the US, according to China Daily newspaper.

Haidilao, which specialises in Sichuan hot and spicy soups, is now in 50 locations in nine cities including Beijing, Tianjin, Shanghai and Nanjing, boasts 10,000 employees and had reported revenues of 1.5 billion yuan (US$238 million) in 2010.

Haidilao is known for its customer service, including the serving of half portions. Popularity means long lines, but customers are taken well care of while waiting for a vacant table, treated with extra delicacies, chess games and even manicures – at no extra cost.

Locations in the US have not yet been announced, but it seems certain the first opening will be in 2012. Marketing and menu preparations tailored to local markets are under way.

Analysts are skeptical about Haidilao’s potential for overseas success. Culture is one element to be taken into consideration, cost and the availability of personnel another. Culture carries a relevance for the choice of menu as well. Americans may not have the sufficient background to appreciate finer Sichuan cooking, and thus pay for it. Local notions about what on an animal is edible and what is not may force the cooks to make less complex meals in the US than they do in China.

“Culture is the first obstacle. It is not certain if hot pot, a variant of Sichuan cuisine, will be accepted by the American people. Also, Americans don’t eat certain animal organs, which means Haidilao will need to change its menu,” said Zhao Jialin, an analyst at market research company Zhuoxin Consulting. 

Another challenge is whether the customer care which is the hallmark of Haidilao be a hit in the US as it is in China and possibly in Singapore.

Determined to pursue expansion, Haidilao will increase the number of its outlets in China by opening 20 new outlets next year. It also plans to set flagships in Southeast Asian countries and Japan.

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