When the days grow shorter and the weather turns cold, soups and stews seem to be a staple in every U.S. household. A Chinese company hopes to cash in on that desire for comfort food.

Haidilao, one of the most popular restaurant chains in China, specializes in hotpot meals. At each table in the restaurant, a heat source is typically placed underneath a dish, to keep a stock soup simmering, while accompanying side dishes are placed around the table. A delicious and filling meal, it’s long been a popular choice in China, praised by consumers for being a budget-friendly option.

But following losses during the coronavirus pandemic, and an oversaturation of choices in the Chinese food market, Haidilao has announced decision to slow its domestic expansion. The chain has already closed 3 percent of its locations in China, as sales continue to decline. Instead, Haidilao has announced plans to focus on international expansion, cultivating the foreign markets that show the most potential. 

Since 2012, Super Hi International Holding, the international operator of Haidilao, has been expanding globally, with new ventures in Southeast Asia and North America. The company now boasts a number of high-profile locations, including Piccadilly Square in London, Marina Bay Sands in Singapore, Flushing in New York, and Century City in Los Angeles.

It also hopes to open more locations in the United States; more outlets in New York and Los Angeles are already in the works. The chain plans to introduce new offerings at these restaurants too, in the hopes of attracting a wider customer base. This announcement follows the successful implementation of halal foods in Southeast Asian countries with significant Muslim populations.

Haidilao has also announced plans to use the majority of the $53 million proceeds from its IPO listing to fund this international expansion, removing the need to pull funding from other branches of the company or to secure outside investors. Analysts in turn seem optimistic, such that U.S. trading shares rose 7.4 percent over three sessions.

Discussion Questions 

1. Do you think Haidilao’s overseas expansion will help or hurt U.S. markets long term? Why?
2. What economic trends, both domestically and abroad, are likely to continue to affect the direction of Haidilao’s expansion?

Sources: Arasu Kannagi Basil, “Haidilao Restaurant Operator Super Hi Prices US IPO at $19.56 Per Share,” Reuters, May 16, 2024; “Chinese Hotpot Chain Haidilao to Press Ahead with Global Expansion After US Debut,” Bloomberg, May 22, 2024; “China Hot Pot Chain Haidilao Plans US Expansion to Escape Slump at Home,” Business Times, September 12, 2024