How Does Xiabuxiabu Catering Management (China) Company Work?

The Xiabuxiabu brand is designed for solo diners or small groups seeking a quick, value-oriented meal. Its innovative bar-style setup for individual hotpots maximizes seating density and service efficiency. This operational design minimizes the need for extensive food preparation at the store level, contributing to high operating efficiency. In 2024, Xiabuxiabu achieved a seat turnover rate of 2.5 times, demonstrating its effectiveness.

The Coucou brand offers a more premium, communal hotpot experience, enhanced by a distinctive tea beverage selection. This brand targets a higher-spending customer segment, with an average spending per customer of RMB 123.5 in 2024. This differentiation is crucial for their Xiabuxiabu China strategy.

A cornerstone of Xiabuxiabu's operations is its highly centralized procurement system and robust supply chain network. This integration provides significant pricing power for key ingredients, ensuring consistent quality and effective cost control across all outlets. This is a critical element in understanding how Xiabuxiabu manages its restaurants in China.

The company leverages its digitalized supply chain and centralized procurement to build collaborative supplier networks. Continuous upgrades to logistics centers and process standardization optimize delivery routes and enhance overall operational efficiency. This focus on technology is a key aspect of Xiabuxiabu's catering management system.

Established in 1998, Xiabuxiabu revolutionized the dining scene by introducing the concept of individual hot pot servings. This innovation catered to a growing demand for convenient and personalized dining experiences.

The launch of the premium Coucou brand in 2016 was a key strategic move to capture a different market segment. This dual-brand approach allows Xiabuxiabu to cater to a broader customer base with varied preferences and spending capacities.

The company experienced a notable revenue decline of 19.7% in 2024, reflecting challenging economic conditions in China. This period necessitated significant operational adjustments to mitigate losses and adapt to market shifts.

Xiabuxiabu's response included closing 219 underperforming restaurants while opening 78 new ones in 2024. This network optimization, coupled with aggressive cost control and digitalized supply chains, aims to enhance overall operational efficiency.

As of December 31, 2024, Xiabuxiabu operated 957 restaurants across China, solidifying its presence. The company's focus on customer retention is evident in its membership programs, such as the 'all-you-can-eat card,' which performed well in the first half of 2024.

The company navigates a highly competitive catering market, facing a consumer trend towards 'consumption downgrade.' Rising operational costs, including rent, labor, and ingredients, also present significant challenges to Xiabuxiabu's business model.

Looking ahead to 2025, Xiabuxiabu plans to open at least 95 new Xiabuxiabu restaurants, targeting high-traffic locations in tier 1 cities. The secondary brand will adopt a more cautious expansion approach, focusing on premium shopping malls.

The company anticipates a substantial reduction in net losses for the first half of 2025, projecting a decrease of 63.2% to 70.5%. This improvement is attributed to ongoing cost optimization and enhanced operational efficiency, with a goal of achieving operating profitability after 2026.