In the field with Spice World
Article

In the field with Spice World

How can a Chinese hot pot chain succeed in a highly competitive, fragmented industry with low barriers to entry and high employee turnover?
April 2019
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At a glance

The hot pot is a unique and popular dish in China, thought to date back at least 1,700 years. Although the dish can vary greatly from region to region, its core elements include a broth; various ingredients, such as meats, vegetables, seafood and tofu; and dipping sauces. The ingredients are placed into a boiling pot of broth in the center of the table and, once cooked, are scooped out, dipped in a sauce and eaten. Most of the “cooking” is done by the people eating the hot pot; the chef’s main responsibilities are ensuring quality and preparing the condiments and ingredients.

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Eating hot pot can be a fun, communal experience. For hot pot restaurateurs, however, it can be a cut-throat business afflicted by low margins and strong competition. The restaurant industry in China in general is extremely fragmented, very competitive and suffers from high employee turnover. On top of that, the hot pot business faces the added pressure of low barriers to entry; with a pot, heat source, ladle, a table and some benches, almost anyone can start a hot pot restaurant. How can a hot pot business make a place for itself in such a difficult environment? 

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