The successful hot-pot chain HaiDiLao is not only expanding fast in China, but has also set its eyes on foreign markets. That might be too early, judges business analyst Shaun Rein in Bloomberg. Moving into markets with different requirements might be too dangerous, especially outside Asia.
It will take time for Western consumers to understand what a hot pot is and flavors might need to be tweaked to broaden their appeal, said Shaun Rein, managing director of the China Market Research Group in Shanghai. It’s difficult for the chain to replicate its Chinese model in the U.S. because of higher labor costs, he said.
“When you’re waiting in line in China, you get a free manicure,” he said. “It’s cost-prohibitive in the U.S. They might have to adjust their value proposition and, slowly, foreigners will eat their food.”
In any case, there is more than enough opportunity for HaiDiLao in the domestic market, Rein said.
“They need to expand more in China before they start looking overseas too much,” Rein said. “They don’t have enough restaurants in China. You often have to wait two or three hours to get into HaiDiLao.”
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