Hot Pot
Hospitality
T
he ordered frenzy of a Haidilao hot pot
restaurant is mirrored these days in the
makings of founder Zhang Yong’s company.
As the dining chain rollicked through a Hong
Kong IPO in September that established
Zhang as the world’s richest eatery entrepreneur, it contin-
ued opening spots in Asia and beyond at the rate of one
every three days.
Two decades ater Zhang irst greeted diners in his na-
tive Sichuan Province, home of pandas and the infamous
mala peppercorns, he controls not only Haidilao but also
the supplier of its spicy broths, condiment maker Yihai
International. Together those holdings, which he shares
with his wife and without accounting for a few smaller
companies he has, gave him at age 47 a late September
valuation of $7.5 billion.
Whether in China, which still accounts for most of its
370 sites, or in Seoul or Singapore or New York or L.A.—or
soon in London’s Piccadilly—the selling point for Haidilao’s
hot act remains the experience. By nearly all accounts, the
food, which is self-stewed at the table by customers who
select ingredients à la carte, is nothing you wouldn’t expect
from similar trendy joints, even with the hand-pulled noo-
dles and popular sauce bar. But the swit, sure shepherding
by staf, ater any wait has been molliied by complimentary
manicures or smartphone detailing, is the dealmaker. Selie
prints are standard, baby cots are likely to be ofered table-
side—the roster of special services is up to each manager.
Hospitality is still in short supply at mass-scale eateries
on the mainland, and that’s where Haidilao has stood out.
It’s the secret to satisfying 106 million guests last iscal year,
with revenues up 36% to $10.4 billion. And to keeping the
throngs coming all the time.
As he walks through a newly opened Hong Kong loca-tion, the second in the city, servers and kitchen staf from
all corners rush out to greet Zhang da ge, their big brother
Zhang. His employees, now 60,000 and counting, give him
one of the highest retention rates in the business, accord-
ing to a Frost & Sullivan industry report that Haidilao
commissioned. “Putting faith in my staf has paid of for
me. Giving them responsibility and autonomy is how you
show trust,” he says of his management philosophy.
Haidilao only promotes from within (see box, p. 92).
he company empowers its store managers, or shifus, with
an equity-like incentive scheme, rewarding them with
roughly 3% of the restaurants’ proits. When a shifu takes
on a new location, he brings a third of his restaurant’s staf
with him, leaving his apprentice behind as the new shifu
there. Alternatively, an apprentice can apply to run a new
location with the backing of his shifu, in which case, the
shifu will get a cut of the proit from the new location.
Day to day, the whole team at each shop needs fuel on
top of the Wi-Fi and laundry amenities provided them.
hus the industrial-size vat in the back, fragrantly sim-
mering meals for the dozens of staf—the only centralized
kitchen in the place. he soup broth for the paying diners’
guo, or pot, comes prepackaged at 760 grams for loading
into the automated cookers. Fresh produce is weighed on
site to ensure identical serving sizes.
In all aspects of his business, Zhang is at once high-
touch and highly eicient. Haidilao’s origins were a four-
table cafe that high-school dropout Zhang got around to
opening in the town of Jianyang, where he’d enjoyed little
advantage growing up. “Any kindness I was shown let a
great impression on me,” he relects, and he got that from
grandparents, oten through food.
Serving up meals became his own calling: “Because
I didn’t have the technical knowledge or capital to doFORBES ASIA
HAIDILAOZhang Yong’s Haidilao mushroomed into a Chinese sensation,
and suddenly he’s the world’s richest restaurant magnate.BY PAMELA AMBLER90 | FORBES ASIA OCTOBER 2018