Core Viewpoint - The article discusses the challenges faced by Haidilao, a leading Chinese hotpot chain, as it navigates a saturated market and declining growth rates, emphasizing the need for innovation and adaptation to survive in a competitive landscape [1][19]. Group 1: Business Performance - Haidilao's revenue for the first half of 2025 was recorded at 20.703 billion RMB, a year-on-year decline of 3.7%, with core operating profit down 14% to 2.4 billion RMB [3][12]. - The table turnover rate decreased from 4.2 to 3.8, contributing to a 10% drop in same-store sales [3][10]. - The average customer spending remained at 97.9 RMB, reflecting a stagnation in consumer spending compared to 2017 levels [3][12]. Group 2: Strategic Initiatives - Haidilao has implemented a "night store" transformation for 30 locations and introduced new dining concepts such as breakfast and takeout options to diversify its offerings [3][6]. - The company has launched the "Red Pomegranate Plan" to encourage innovation and entrepreneurship among employees, allowing for a broader range of projects and business models [20][23]. - Over 50% of Haidilao's stores have undergone modifications to enhance their takeout capabilities, with plans to establish "super kitchens" for delivery services [16][20]. Group 3: Market Position and Competition - The hotpot market is reaching a saturation point, with Haidilao's store count decreasing to 1,363, down by five from the previous year [6][10]. - The external environment and consumer behavior are shifting towards more price-sensitive dining options, impacting Haidilao's traditional business model [15][29]. - Haidilao's external delivery business has surged nearly 60%, now accounting for 4.5% of total revenue, primarily driven by the "down-to-earth" meal series [12][15]. Group 4: Employee and Cultural Dynamics - The company's growth model has historically focused on a strong human resource system, promoting from within and fostering a culture of shared success [18][25]. - The introduction of a tipping system has sparked controversy, as it may shift the focus from service quality to financial incentives for employees [24][25]. - Haidilao's franchise model has been conservative, with only 41 franchise locations established, emphasizing a strong management approach to maintain quality and brand integrity [25][26].