Core Insights - The hot pot industry in China is experiencing structural differentiation, with a notable rise in self-service hot pot formats [4][11] - The number of small hot pot enterprises in China has reached approximately 23,000, with a compound annual growth rate of 2.8% from 2019 to 2023 [5] - Major brands like Haidilao and Yang Guofu are entering the self-service hot pot market, indicating a trend towards this format [7][8] Industry Overview - As of July 2024, the number of small hot pot outlets in China is expected to exceed 50,000, accounting for about 10% of the total hot pot outlets [9] - 81.6% of small hot pot brands have five or fewer outlets, highlighting a highly fragmented market with low chain rates [10][11] - Emerging regional brands are capitalizing on opportunities in this nascent market, with numerous players already present [12][13] Company Case Study: Long Ge Self-Service Hot Pot - Long Ge has rapidly expanded, surpassing 100 outlets and planning to reach 300 by 2025 [15][17] - The brand's growth is attributed to a well-developed single-store model and a replicable business strategy [20] - The single-store profitability model includes key elements such as customer targeting, product-service mix, location strategy, and operational tactics [22][23] Single-Store Model Development - Long Ge's initial store faced significant losses, prompting a shift to a more successful location model [25][26] - Customer feedback led to the introduction of single-portion dishes, although this increased labor costs [28] - The focus on customer satisfaction is critical, with Long Ge achieving a monthly repurchase rate exceeding 30% [39] Operational Efficiency - Long Ge emphasizes standardization in operations, reducing labor needs and simplifying employee tasks [40][41] - The self-service model allows for high standardization, which is essential for scalability in the hot pot sector [44] Business Model Design - The business model is designed to align the interests of all stakeholders, including suppliers, employees, and investors [49][50] - Long Ge's investment structure allows for significant employee participation in profit-sharing, enhancing motivation and reducing turnover [54][56] - The model has proven effective, with over 80 new outlets opened since 2019, indicating strong market acceptance [59]