The hot pot industry has entered a stock elimination phase.
As restaurant consumption gradually transitions from "recovery period" to "adjustment period," the hot pot industry, a national-level dining sector, welcomed a critical transformation stage in the first half of 2025. On one hand, market scale continues to expand, expected to exceed the 650 billion yuan threshold; on the other hand, intensified stock competition, divergent consumer demands, and rising cost pressures interweave, accelerating the industry's shift from "scale expansion" to "quality improvement."
From strategic adjustments of leading brands to potential releases in sinking markets, from product innovation breakthroughs to supply chain efficiency upgrades, every change in the hot pot market reflects new industry development logic.
**Leading Brands: Resilient Breakthrough Under Performance Pressure** **HAIDILAO's Multi-brand Hedging Strategy vs XIABUXIABU's Contraction and Optimization**
As industry "barometers," leading brands' performance often reflects market trends first. Currently, the only two listed hot pot brands have released their respective first-half 2025 financial reports. Both HAIDILAO and XIABUXIABU face varying degrees of performance pressure but demonstrate strong market resilience through timely operational strategy adjustments.
HAIDILAO achieved operating revenue of 20.703 billion yuan in the first half, down 3.7% year-on-year; net profit reached 1.755 billion yuan, decreasing 13.7% year-on-year; core operating profit was 2.408 billion yuan, down 15% year-on-year. Despite HAIDILAO's continued strong brand influence and profitability, both revenue and net profit declined year-on-year.
HAIDILAO restaurants served nearly 190 million customers in the first half, with average table turnover rate declining from 4.2 times per day last year to 3.8 times per day. Customer per capita consumption slightly increased from 97.4 yuan to 97.9 yuan. HAIDILAO attributed the decline in table turnover rate and customer traffic to intensified restaurant market competition and changing consumer demands.
Facing sluggish growth in its main brand, HAIDILAO positions its multi-brand strategy as the key breakthrough. Beyond its core HAIDILAO hot pot brand, it has deployed 14 restaurant brands including "Yanqing Barbecue," "Congqian Yin Xiang," and "Xiaohai Ai Zha," totaling 126 restaurants by the end of the first half. "Yanqing Barbecue" performed particularly well, opening 46 new stores in the first half, reaching 70 total locations. Financial data shows "other restaurant revenue" including this brand reached 597 million yuan, surging 227% year-on-year, becoming an important growth pole to offset main brand pressure.
Compared to HAIDILAO, XIABUXIABU faces more severe performance challenges. In the first half of 2025, XIABUXIABU's revenue was 1.942 billion yuan, down 18.9% year-on-year; net loss was 81 million yuan, narrowing 70.5% year-on-year. XIABUXIABU's performance decline mainly stems from intensified market competition and consumption downgrade factors. XIABUXIABU optimized costs by closing inefficient stores, operating 937 restaurants globally, opening 32 new XIABUXIABU restaurants in mainland China while closing 29 XIABUXIABU restaurants and 23 Coucoue restaurants in the first half. XIABUXIABU brand's customer traffic turnover rate was 2.6 times, up 13% year-on-year, but Coucoue brand suffered significant impact, with table turnover rate declining from 1.6 times last year to 1.4 times.
However, in first-tier cities, XIABUXIABU's performance was completely opposite. For instance, new stores like Beijing Jingzhongjiao Meihui, Shanghai Mantianxing, and Shanghai Hangtou Pule achieved table turnover rates of 8.4, 7.1, and 6.5 times respectively during opening periods. During the reporting period, XIABUXIABU opened 14, 6, 6, and 6 new stores in first-tier, new first-tier, second-tier, and third-tier and below cities respectively, totaling 32 new stores. First-tier city openings accounted for 43.7% of total new stores in the first half, indicating XIABUXIABU's strategic shift toward major cities.
From an industry background perspective, the hot pot market scale is expected to reach 650 billion yuan. Despite the massive market size, intensified competition has led to declining table turnover rates for leading brands and performance growth pressures. When facing market challenges, leading brands demonstrate certain resilience through operational strategy adjustments like HAIDILAO's multi-brand strategy and XIABUXIABU's closure of inefficient stores. However, how to regain growth momentum in fierce competition remains a key issue for leading brands to resolve.
**Market Structure: Sinking Markets Dominate Incremental Growth, Price Segments Polarize** **Third-tier and Below Cities Account for Over 50%, Budget and Premium Segments Develop in Parallel**
While leading brands face pressure, the regional and price structure of the hot pot market is undergoing profound transformation. "Sinking" and "differentiation" have become two key terms, driving the industry's transition from "homogeneous competition" to "refined deployment."
The hot pot market shows significant changes in regional structure, with sinking markets becoming increasingly important. According to Hongcan Network data, the hot pot sector overall shows a sinking trend. As of May 2025, third-tier and below cities account for 52.3%, becoming the main incremental source for the hot pot market. New first-tier cities show contrarian contraction, with store proportions declining from 23.5% to 22.2%.
The core driving force behind this change is the release of consumption potential in sinking markets and operational cost advantages. On one hand, with rising resident incomes and consumption concept upgrades, consumer demand for hot pot in sinking markets shifts from "occasional consumption" to "daily high-frequency consumption." On the other hand, rental and labor costs in sinking markets are only about half of first-tier cities, providing brands with higher profit margins. Therefore, more brands are adjusting strategies for sinking markets, such as launching more affordable set meals, simplifying store decorations to control costs, and even developing dishes adapted to local tastes to quickly capture market share.
In the price dimension, the hot pot market's "polarization" trend becomes increasingly obvious, with different consumption levels showing differentiated growth characteristics. Meituan data shows that in 2024, the budget hot pot market under 30 yuan performed most prominently, with store proportion reaching 51.5%, becoming the absolute mainstream segment. This trend directly correlates with consumers "pursuing cost-effectiveness" psychology amid consumption downgrade - more consumers prioritize price when choosing hot pot, forcing brands to reduce average spending through simplified dish structures and optimized supply chain costs.
Meanwhile, the premium market has not shrunk due to consumption downgrade but instead shows "niche yet stable" growth momentum. The quality hot pot market with per capita spending above 120 yuan grew rapidly from 60.2 billion yuan in 2019 to 74.1 billion yuan in 2024, with a compound annual growth rate of approximately 4.2%, higher than the overall market average. China Business Industry Research Institute analysts predict China's quality hot pot market will reach 80.5 billion yuan in 2025. Premium brand Banu, with per capita spending above 120 yuan, plans to open 150 new directly-operated stores by 2027 in its IPO planning, firmly bullish on premium hot pot.
These brands' core competitiveness lies in "differentiated value": in ingredients, they focus on source control, selecting premium ingredients like imported meats and rare mushrooms; in experience, they create premium atmospheres through personalized service and themed decorations; in health, they launch low-sugar, low-fat, wellness broths, aligning with high-income groups' pursuit of "quality life." Price segment differentiation essentially reflects diversified consumer demand, meaning the hot pot market has bid farewell to the "one-size-fits-all" era and entered a new stage of "stratified competition."
**Growth Drivers: Innovation and Supply Chain Dual-wheel Drive** **Product Breakthrough + Digital Efficiency Enhancement, Reconstructing Competitive Barriers**
Behind market structure adjustments, "innovation" and "efficiency" become two core engines driving hot pot industry growth - product innovation helps brands attract consumers, while supply chain and digital upgrades help brands control costs and improve experiences, together forming brands' core competitiveness.
Facing homogeneous competition, product innovation becomes key for brands to "break circles," especially the rise of niche segments, injecting new vitality into the hot pot market. In the first half of 2025, specialty categories like Guizhou sour soup hot pot and mushroom hot pot performed excellently, rapidly capturing markets with unique flavors and health attributes. Taking Guizhou sour soup hot pot as an example, its sour and spicy appetizing flavor differs from traditional spicy hot pot, and the sour soup is rich in organic acids and probiotics, meeting current consumer demands for "healthy eating." It not only became popular in Southwest China but gradually penetrated national markets.
Product innovation implementation relies on rapid supply chain response. On one hand, hot pot base enterprises accelerate flavor iterations, expanding from traditional spicy and clear broths to dozens of niche flavors including tomato, Thai tom yum, fish maw chicken, and vinegar residue, meeting different regional and demographic needs. On the other hand, ingredient supply chain enterprises strengthen source cooperation, establishing direct procurement relationships with mushroom bases in Yunnan-Guizhou regions and pastures in Inner Mongolia, achieving "fresh ingredients delivered to stores within 48 hours" through cold chain logistics, ensuring ingredient quality while reducing intermediate costs.
Supply chain flexibility and response speed have become key factors determining product innovation success. For instance, HAIDILAO's "single-serving" delivery - "rice-accompanying hot pot dishes" accounts for over 55% of delivery revenue, becoming the main delivery growth engine. Offline, HAIDILAO's camping hot pot, campus hot pot, and corporate cafeteria hot pot enter outdoor and campus niche scenarios. By the end of June 2025, HAIDILAO had renovated nearly 30 late-night themed stores, increasing nighttime traffic by 15%-20%. Coucoue also piloted "business lunch" and "lunch single-serving" in June 2025, targeting white-collar lunch segments.
Leading brands are strengthening supply chain and digital capabilities to improve operational efficiency and business quality.
HAIDILAO improves business quality by optimizing store layout, rationally planning store locations, and adjusting opening and closing strategies based on consumption demands and market saturation in different regions. In supply chain, HAIDILAO established a comprehensive cold chain logistics system, using dual-temperature cold chain vehicles, WMS warehousing systems, and food safety traceability technology to achieve "fresh-cut beef delivered to stores within 4 hours." HAIDILAO's AI ordering system intelligently recommends combinations like "fresh-cut beef + mushroom broth" and "shrimp paste + tomato broth" based on consumers' historical orders, taste preferences, and party size, making recommended set meals account for 35% of sales.
Through digital and supply chain innovation, XIABUXIABU established centralized procurement platforms with online price comparison sourcing, reducing ingredient costs by 22.5% while maintaining quality. Dynamic demand forecasting models guide procurement planning, achieving "volume for price, price for quality."
HAIDILAO uses "multi-scenario + multi-brand" strategies with digital focus on differentiated customer experience, stabilizing high average spending while increasing delivery growth. XIABUXIABU focuses digital efforts on "supply chain cost reduction + partner expansion," not only achieving significant loss reduction but also substantially improving young user retention through membership economics and IP collaborations. One "upward for experience," another "downward for efficiency" - both paths achieved preliminary replicable and scalable results in the first half of 2025.
**Industry Landscape: Accelerating Concentration** **Leading Brand Advantages Coexist with Store Closure Waves, Stock Competition Becomes Norm**
As market competition intensifies and industry transformation deepens, hot pot industry concentration is accelerating, with "stronger become stronger, weaker get eliminated" patterns becoming increasingly obvious. The industry officially enters the stock competition stage.
According to Qianzhan Industry Research Institute data, in the first half of 2025, TOP100 hot pot brands achieved 16% market share, with combined revenue of 99 billion yuan and over 21,000 total stores. TOP10 companies occupy 70% of TOP100 brands' revenue share. Leading brands maintain advantages primarily through accumulated brand influence, comprehensive supply chain systems, mature operational experience, and sufficient capital reserves - these advantages enable rapid strategy adjustments during market fluctuations, such as covering different niche markets through multi-brand deployment, reducing costs through digital upgrades, and optimizing resource allocation by closing inefficient stores.
However, industry development hasn't been smooth, with store closure waves continuously sweeping the hot pot market. HAIDILAO closed 33 stores in the first half, while XIABUXIABU contracted inefficient stores. The "Hot Pot Industry Development Report 2025" released by Hongcan Industry Research Institute shows nationwide hot pot-related enterprises totaled 406,100 in 2024, declining from 2023. By January-February 2025, enterprise inventory further declined to 405,800, with continued small declines expected in 2025. Hot pot store numbers also showed obvious declines starting November 2024, indicating the hot pot industry's entry into stock competition with increasingly fierce market competition, gradually eliminating poorly managed stores lacking competitiveness.
During this process, leading brands leverage their advantages to continuously consolidate positions during market reshuffling, further improving industry concentration. However, leading brands also face challenges of discovering new growth spaces and improving market share in stock markets.
The first half of 2025 hot pot market presents complex and diverse development trends. While leading brands face performance pressure but actively adjust, market sinking and price segment differentiation are obvious, innovation and supply chain become growth drivers, and industry concentration continues improving. For hot pot industry practitioners, deeply understanding these trends and grasping market changes is key to standing out in fierce competition.
In the future, the hot pot market will continue advancing through transformation. Brands that can accurately insight consumer demands, continuously innovate, and optimize supply chain and operational management are expected to occupy more favorable market positions.