Table of Contents
Executive Summary
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- The market
- Market experiences disruption caused by COVID-19, and will recover slower than expected
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- Figure 2: Forecast of market size of hotpot dining (adjusted for COVID-19), China, 2014-24
- Market development breaks geographic boundaries
- Market was moving upward
- Mature supply chain guarantees stable supply
- Impact of COVID-19 on Hotpot Dining
- The outbreak puts companies under pressure, but sparks new opportunity
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- Figure 3: Short, medium and long term impact of COVID-19 on hotpot dining, April 2020
- The outbreak of COVID-19 has stimulated hotpot condiments and self-heating business
- Companies and brands
- Haidilao and Xiabuxiabu secure their leading positions
- O2O retailers march into the hotpot business
- Hotpot brands are going to retail
- Brands find ways to survive from COVID-19
- The consumer
- Hotpot experience is no longer limited to restaurant dining, even before COVID-19
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- Figure 4: hotpot consumption frequency in each occasion and hotpot Maocai consumption frequency, December 2019
- Perception towards hotpot delivery suggests it has a room for further improvement
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- Figure 5: Attitudes towards hotpot delivery, December 2019
- Regional hotpots have markedly different appeal
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- Figure 6: Perception towards different types of hotpot, December 2019
- Healthy nutrition offers route to premiumisation
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- Figure 7: Interest in innovations in hotpot, December 2019
- Hotpot condiments from Haidilao and Little Sheep are market leaders
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- Figure 8: Purchase habits of hotpot restaurant own-label products, December 2019
- What we think
The Impact of COVID-19 on Hotpot Dining
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- Figure 9: Short, medium and long term impact of COVID-19 on hotpot dining
- Opportunities and threats
- Foodservice industry under high pressure
- Retailing formats move towards diversification
- Supportive practices demonstrate social responsibilities
- Impact on the market
- What we’ve seen so far…
- No quick bounce back for Hotpot dining, with impact continuing throughout the year
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- Figure 10: Forecast of market size of hotpot dining (adjusted for COVID-19), China, 2014-24
- Figure 11: Forecast of market size of hotpot dining, China, 2014-24
- Shifts in consumer behaviour
- Discretionary spending on eating out shrinks
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- Figure 12: Spending changes on eating out*, March to May 2020
- The outbreak bolsters takeaway ordering behaviour
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- Figure 13: Frequency of ordering takeaway foods, March to May, 2020
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- Figure 14: Places concerned the most to be exposed to COVID-19, May, 2020
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- Figure 15: Frequency of using contactless delivery services, March to May, 2020
- How COVID-19 will reshape the industry
- Diversification in retail products’ portfolios
- Embrace the trend for ‘going online’ or for live streaming
- Assurance of food safety is paramount
- Evolving delivery services
- Newly emerged business models to connect suppliers with consumers
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- Figure 16: An example from Shuhai Supply Chain, China
- Expansion to home kitchen with more retail products
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- Figure 17: Examples of ready-to-cook products/meals, China
- COVID-19: China context
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- Figure 18: Accumulative confirmed cases of COVID-19 in China, January to April 2020
- Figure 19: Status of returning to work, China, March and April 2020
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Issues and Insights
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- Nutrition paves the way for premium hotpot
- The facts
- The implications
- Improving restaurants dining experience for those eating alone
- The facts
- The implications
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- Figure 20: In Xiabuxiabu, China
- Differentiate with more own brand products or distinctive services
- The facts
- The implications
The Market – What You Need to Know
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- Market contraction in 2020 but recover growth in the longer term
- Market development breaks geographic boundaries
- Upgraded dining consumption pushes hotpot restaurants to go upmarket
- Mature supply chains reduce raw material costs and make daily supply stable
Market Size and Forecast
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- Despite being an important pillar of foodservice, hotpot dining has experienced disruption in 2020
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- Figure 21: Forecast of market size of hotpot dining (adjusted for COVID-19), China, 2014-24
Market Factors
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- The hotpot market has broken through geographic limitations
- Consumption upgrade accelerates the growth speed of mid-to-high level hotpot restaurants
- Mature supply chain guarantees products quality and facilitates standardisation
- COVID-19 pushes the sales of hotpot condiments and self-heating businesses
Key Players – What You Need to Know
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- Haidilao and Xiabuxiabu maintain their leading positions in share
- More O2O retailers have joined the competition
- Hotpot brands expand their businesses by stepping into retailing
Market Leaders
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- Highly fragmented market
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- Figure 22: Restaurant numbers of top 10 hotpot brands, 2019
- Haidilao secures its position by expansion and upgraded offerings
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- Figure 23: Key company information of Haidilao over 2017-19
- Xiabuxiabu gains marginal share
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- Figure 24: Key company information of Xiabuxiabu over 2017-19
Market Highlights
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- O2O retailers’ involvement in hotpot business
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- Figure 25: Hotpot pages on O2O retailers’ apps, China
- Hotpot sector “going to retail” in latest trend
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- Figure 26: Dalongyi’s self-heating fried rice and claypot rice, China
- Figure 27: Hotpot brands’ tea drink businesses, China
- Grow food delivery business and engage consumers through live streaming
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- Figure 28: Search engine index of hotpot, China,
- Figure 29: Hotpot live streaming on Taobao, China
- Haidilao’s expansion to Chinese cuisine and household kitchen
The Consumer – What You Need to Know
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- The hotpot delivery experience doesn’t fully match restaurant dining
- Different styles of hotpot tagged with distinctive labels
- Innovations in nutrition and side dishes are more valued
Consumption Frequency and Channel
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- The occasion for enjoying hotpot is not limited to restaurant dining
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- Figure 30: hotpot consumption frequency in each occasion and hotpot Maocai consumption frequency, December 2019
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- Figure 31: Hotpot consumption, by occasion, December 2019
- Affluent consumers and those with multiple children are heavy hotpot users
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- Figure 32: Having hotpot once or more timer per week within last 6 month, by monthly personal income and family structure, December 2019
- Excite the interests of 40-somethings towards delivery service by providing upgraded offerings
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- Figure 33: Haven’t ordered hotpot delivery, by age group, December 2019
- Females aged 25-29 are heavy users of hotpot Maocai
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- Figure 34: Maocai consumption frequency (once or more times per week only), by gender & age, December 2019
Attitudes towards Hotpot Delivery
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- Inconsistency of freshness and flavour may help explain the limited appeal
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- Figure 35: Attitudes towards hotpot delivery, December 2019
- Ordering hotpot delivery is uncommon among those dining together…
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- Figure 36: Ordering hotpot delivery under different occasions, December 2019
- …while it is a welcome choice for heavy Maocai hotpot users
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- Figure 37: Ordering hotpot delivery under different occasions, December 2019
- The overall perception towards hotpot Maocai delivery is not positive
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- Figure 38: Attitudes towards hotpot Maocai delivery, December 2019
Perception of Different Types of Hotpot
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- Sichuan/Chongqing hotpot could deliver a sense of pleasure
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- Figure 39: Perception towards different types of hotpot, December 2019
- Cantonese style hotpot gets popular for its nourishing image
- Distinctive flavour and ingredients make Yunnan/Guizhou hotpot special
- Foreign cuisine-inspired hotpot is perceived as special especially among females
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- Figure 40: % of consumers who associate exotic styles of hotpot with the attribute of being special, by gender, December 2019
Interest in Hotpot Innovation
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- Craving for nutrition enhanced innovations
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- Figure 41: Interest in innovations in hotpot, December 2019
- Opportunities to watch: luwei hotpot
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- Figure 42: Xian He Zhuang, an example of luwei hotpot, China
- Females are more adventurous in trying things out of the ordinary
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- Figure 43: Interest in innovations in hotpot, by gender, December 2019
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- Figure 44: Hotpot seasoning with unconventional shapes, China
- Figure 45: Hotpot with durian coconut milk flavour base soup, China
Purchasing Habits of Hotpot Restaurant Own Label Products
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- Haidilao and Little Sheep do better in own-brand products
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- Figure 46: Purchasing habits of hotpot restaurant own-label products, December 2019
- The low penetration of hotpot branded products in Guangzhou reflects regional dining habits
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- Figure 47: Haven’t purchased hotpot base seasoning and dipping sauce in the last 6 months, by city, December 2019
Potential for Hotpot Crossovers
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- Combining with leisure activities may help enhance dining experience
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- Figure 48: Interest in innovative combinations, December 2019
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- Figure 49: Tianfu hotpot restaurant in Luoyang, China
- Females aged 25-29 show special enthusiasm towards tea drink services
- Interest in services reveals gender preferences
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- Figure 50: Interested in innovative combinations, by gender, December 2019
- Married respondents with more than two kids are fond of interactive activities
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- Figure 51: Interest in innovative combinations, by children in household, December 2019
Meet the Mintropolitans
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- Increase female MinTs’ willingness to pay for hotpot with nutrients fortification
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- Figure 52: Interest in innovations in hotpot, by consumer classification & gender, December 2019
- Diverse types of services attract MinTs
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- Figure 53: Interest in innovative combinations, by consumer classification, December 2019
Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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