Xiabu Xiabu (呷哺呷哺) Gambles on New Sub-Brands After Five-Year, 1.5 Billion Yuan Loss

Losses Force a Pivot

Xiabu Xiabu (呷哺呷哺), the Hong Kong–listed fast-casual hotpot chain known for single-person pots, has racked up cumulative losses of about 1.5 billion yuan over the past five years, according to Chinese outlet TMTPost. The company is now betting on a multi-brand strategy to stem the slide. Will a flurry of new concepts revive a fatigued flagship?

From Pioneer to Squeezed Middle

Founded in the late 1990s and expanded aggressively in the 2010s, Xiabu Xiabu helped popularize affordable, quick-service hotpot across China’s malls and office districts. But the company has been squeezed by years of COVID-era disruptions, a slower post-pandemic recovery in discretionary dining, and intensifying competition from both premium rival Haidilao (海底捞) and value-focused upstarts. Its upscale sister brand, Coucou (凑凑), has partially offset pressure, yet the core mass-market chain faces discounting wars and softer traffic in lower-tier cities.

Betting on Sub-Brands

The company is rolling out new sub-brands to target distinct price bands and dining formats, complementing Coucou at the high end and the main Xiabu Xiabu line in the mass market. It has been reported that these new concepts will lean into simplified menus, clearer value propositions, and smaller footprints designed to improve unit economics. Reportedly, management is also exploring adjustments to store mix and operational models—moves aimed at lifting margins after a cycle of closures and remodels during the downturn.

A Crowded Battlefield—and an Uncertain Path

China’s restaurant landscape remains deflationary at the consumer level, with diners trading down and operators locked in promotions. Food input costs, urban rents, and staffing add further strain. Against that backdrop, a portfolio approach can diversify risk, but it also risks brand dilution and execution complexity. For Western readers, this underscores a broader China retail theme: mid-tier brands are being forced to specialize or scale premium/value extremes. Xiabu Xiabu’s turnaround will hinge on whether its sub-brands can carve out defensible niches—and whether the hotpot stalwart can regain its once-formidable repeat traffic without sacrificing profitability.