Recently, there has been a wave of closures in the hot pot industry in China, drawing attention to the challenges faced by the sector. The well-known hot pot brand “Zhu Guangyu Hot Pot Restaurant” recently made headlines with the collective temporary closure of all its outlets in Changsha, sparking concern among consumers. This event has highlighted the overall competitive pressure and operational difficulties faced by the hot pot industry, including declining performances of major players and a decrease in the number of outlets, reflecting the reality of weak consumer demand in the catering market.
According to Blue Whale News, Zhu Guangyu Hot Pot Restaurant, once hailed as the “Hot Pot Queue King of Chongqing” and the “Kaleidoscope of the Hot Pot World,” recently suspended operations at all 5 outlets in Changsha.
Founded in 2020, this internet-famous hot pot brand gained popularity for innovative products like “Tiger Skin Chicken Feet” and “Lemon Smash Lemonade,” welcoming nearly 6 million customers over three years. The daily sales volume of the 9.9 yuan Lemon Smash Lemonade at a single outlet could reach over 700 cups.
The brand responded by stating that all outlets in the Hunan region (excluding Chenzhou) have temporarily suspended operations, now managed directly by the company due to agency influences. Although the company has pledged to refund prepaid card members, several outlet contact numbers are currently unreachable, causing consumer worries.
Notably, a visit by reporters from “Xiaoxiang Morning News” discovered that some outlets had never officially opened and only had storefronts erected.
The rapid expansion of Zhu Guangyu Hot Pot Restaurant had once attracted industry attention. Between 2022 and 2024, the brand opened over 200 outlets in 31 provinces across China, with nearly 50% located in second and third-tier cities. In May of this year, they even opened their first overseas store in Kuala Lumpur. However, the rapid expansion driven by internet-based operational logic is now facing severe challenges.
The difficulties in the hot pot industry are not isolated incidents. Performance forecasts released by the former “Hot Pot Chain Leader” Haidilao Hot Pot show an expected revenue reduction of approximately 18.9% year-on-year to about 1.9 billion RMB in the first half of this year, with an estimated net loss between 80 million and 100 million RMB. This long-established hot pot enterprise, founded in 1998, has been operating at a loss for four consecutive years since 2021, with accumulated losses exceeding 1.2 billion RMB.
To address operational challenges, Haidilao Group is significantly downsizing its store network. In 2024, the company closed 219 restaurants, reducing the total number of outlets to 957 by the end of the year. Although losses have narrowed through the closure of inefficient restaurants and cost control measures, its stock price has fallen to 0.77 Hong Kong dollars, with a market value of only 836 million Hong Kong dollars, a stark contrast to its former glory.
Even industry leader Haidilao Hot Pot has not been immune to challenges. Morgan Stanley predicts that due to weak demand, Haidilao’s revenue in the first half of 2025 is expected to decrease by 3.5% to 20.7 billion RMB, and net profit is projected to drop by approximately 5% to 1.9 billion RMB. Consequently, analysis institutions have lowered the company’s earnings forecasts for the next three years, reducing the target price from 20 Hong Kong dollars to 17.5 Hong Kong dollars.
The overall “cooling off” of the Chinese hot pot industry reflects deeper market changes. According to the “2025 Hot Pot Industry Current Situation and Development Analysis Report” released by the catering industry, high-end hot pot restaurants, low-priced internet-famous mini hot pot establishments, and new food and beverage startups are facing significant closures. As a capital-intensive food category, the hot pot industry is experiencing increasing instances of “debt at startup” under high competition and low tolerance for mistakes.
Price wars are further intensifying competition within the industry. According to the “2024 Chongqing Hot Pot Development Report” released by the Red Catering Industry Research Institute, as of November 2024, over 70% of hot pot outlets in China are concentrated in the 50 to 120 RMB price range, with an increasing proportion in every price category, indicating a clear trend towards price reduction.
According to incomplete statistics from WinBusiness Net, in the period from April to July 2024, over 30 chain brands in the catering sector have closed down, covering various formats such as Chinese fine dining, hot pot, and casual dining. The once flourishing “Nan Hot Pot” has closed over 200 outlets in the past year, while the leading hotpot brand in China for six consecutive years, “Little Fat Sheep,” has drastically reduced its number of outlets by over 80%. The prestigious Hong Kong-style hot pot brand “Aoge Macau Doula” is now left with only one outlet.