In recent months, several regions in mainland China have witnessed a surge in the opening of chili beef hot pot restaurants, with some brands expanding their presence to nearly 80 outlets. A recent industry analysis published on November 12 highlights that these establishments primarily focus on affordability and vegetable buffets, relying heavily on a continuous flow of customers to maintain profitability. However, if business begins to decline, the pressures of rent, labor, and ingredient costs can significantly weigh down operations.
One prominent chain, “Amei Ji – Street Chili Beef,” reportedly has almost 80 locations, predominantly situated in Beijing, where the average consumer spending exceeds 50 yuan (RMB).
In Chongqing, the “Guizhou Alan Street Chili Beef” brand operates close to 60 outlets, while in Yunnan, “Zuo A Jie Family Chili Beef” has around 50 locations, although the average spending there hovers around a more modest 40 yuan.
Chili beef, a staple dish commonly found in regions such as Sichuan and Guizhou, has been reimagined by some businesses into a hot pot format, where customers first enjoy beef before adding vegetables to the broth. The analysis indicates that most of these restaurants adopt a semi-buffet model, offering unlimited vegetables, complimentary fruits, and rice.
Another industry media outlet, “Hot Pot Restaurant Insights,” reported on October 22 that “Amei Ji” in Beijing provides small pots designed for two to three people, priced at 88 yuan each. Meanwhile, a Zhengzhou outlet has introduced a dual pot for 58 yuan, allowing diners to self-serve vegetables. This format, combining a broth base with beef, vegetables, and rice, appears to cater to consumers’ desires for budget control and social dining experiences.
According to “Restaurant Owner Insider,” the low barrier to entry for replicating chili beef hot pot has contributed to its rapid rise in popularity. Once a dish becomes trendy, suppliers can quickly provide standardized chili beef base ingredients, enabling businesses to begin operations immediately. This accessibility and the straightforward business model make it easier for competitors to enter the market.
The article suggests that for these venues to thrive, they must keep the same table continually occupied by new diners to sustain their revenue. However, their ability to absorb fluctuations in rent, labor, and ingredient costs remains limited. If customer footfall decreases, maintaining a balance between income and expenditures becomes increasingly challenging.
Moreover, the question of whether customers will return after the novelty wears off poses another obstacle for these establishments. The piece asserts that online popularity may not provide sustainable backing for their business models; thus, reliable supply chains and consistent ingredient quality are crucial.
Reflecting on trends from earlier in 2023, the “Zhaza Beef Hot Pot” also gained fast traction with its focus on beef-centric offerings, drawing customers with a price point of around 50 to 60 yuan per person. However, despite brands rapidly expanding their locations by over 100 outlets in just half a year, the excitement surrounding this category has since diminished.