China’s hotpot industry leader, Haidilao, has been facing multiple operational pressures in recent years, including slowing revenue growth, profit pressures, declining table turnover rates, challenges in food safety management, and intensified market competition. On February 9th, the topic of “Haidilao’s Five Major Crises: Founder Returns to the Frontline” trended on social media.
A while ago, Haidilao announced that its founder and chairman of the board, Zhang Yong, has resumed the position of CEO. This news instantly became a hot topic in the catering industry, capital markets, and business and finance circles.
At 55 years old, Zhang Yong returned to the frontline less than 4 years after stepping back, seen by the public as a move to “rescue” the company amid its crisis.
In March 2022, Zhang Yong admitted to making a misjudgment of the trend and took responsibility for the massive losses incurred by aggressive expansion, subsequently handing over the CEO position to his trusted Yang Lijuan. However, the situation took a turn that was far beyond his expectations.
In the following 4 years, Haidilao’s performance did not meet his wishes and instead plunged into a state of frequent CEO changes.
Yang Lijuan only sat in the CEO position for 2 years and 3 months, before moving to oversee Haidilao’s overseas business in June 2024; while her successor, Gou Yiqun, had an even shorter tenure, stepping down after just a year and a half.
Behind the three CEO changes in four years lie the immense pressure that Haidilao’s performance continues to endure.
In the first half of 2025, Haidilao’s revenue decreased by 3.66% year-on-year, with a staggering 13.72% decline in net profit.
The performance report cited increased market competition, changing consumer demands, and the initial impact of product and operational model adjustments as the main reasons for the performance decline.
One of the most closely watched indicators in the financial report is the table turnover rate, a crucial measure of restaurant seat utilization efficiency and business prosperity.
Last year, Haidilao’s core indicator faltered as well. The average table turnover rate at its directly-operated restaurants dropped from 4.2 times/day to 3.8 times/day, falling below the company’s internally set pass line of 4 times/day.
Additionally, in recent years, Haidilao has been repeatedly exposed to food safety incidents, adding to its existing pressures. Issues self-identified on the company’s official website include expired ingredients, equipment malfunctions, and unhygienic operations.
Behind Haidilao’s weak performance is a deep and irreversible transformation that the catering industry has been undergoing for decades. An analysis by financial blogger “Huashang Taolu” suggests that Zhang Yong’s return to the frontline has more profound reasons.
Firstly, there has been a shift in consumer attitudes and concepts, with value for money increasingly becoming dominant. From 2024 to 2025, whether high-end or mid-to-low-end, the nationwide catering industry has been lowering prices, with average customer prices across the industry generally reduced by 5% to 10%. Correspondingly, consumers are increasingly unwilling to pay premiums for various offerings.
Secondly, the catering industry has entered a harsh stage of stock game. The difficulty of opening new restaurants nationwide has been increasing, while the rate of closures has significantly accelerated.
In 2023, there were 3.15 million new catering outlets opened, while the number of closed outlets reached 3 million. By 2024, the situation had not improved, with 3.7 million new catering outlets opening and a high closure number of 3.35 million.
Haidilao’s declining performance reflects the predicament facing the entire hotpot industry in China.
Another hotpot giant, Haidilao, reported a revenue reduction of 18.9% in the first half of 2025, marking the company’s fourth consecutive year of losses.
To address the challenges, Haidilao has significantly reduced its store scale, closing 219 restaurants in 2024.
Moreover, several well-known hotpot brands have also fallen into a “store-closing trend”. The popular online brand Zhuguangyu Hotpot, once hailed as the “Hotpot Queue King of Chongqing”, recently suspended operations in all its Changsha stores. Another former hotpot giant, Nan Hotpot, has closed over 200 stores in the past year, while “Little Fat Sheep” has downsized its stores and the Hong Kong-style hotpot brand “Yi Ge Macau Bean Drag” has only one store left.