This is an English adaptation of a FoodBud historical article originally published on November 28, 2021.
Jiumaojiu Group was using a multi-brand playbook similar to a consumer packaged goods company filling supermarket and convenience-store shelves: in foodservice terms, it was trying to occupy shopping malls with multiple restaurant formats and reuse mall traffic across brands.
FoodBud had previously analyzed Jiumaojiu’s investment activity, including its minority LP-style participation in Heytea-related investments. The company had tested both acquisitions and incubation, and its conclusion at the time was that two models worked best: build brands internally, or take only small stakes while acting more like a coach or adviser. The logic was that restaurant barriers to entry were not high, capable founders often wanted to remain owners, and targets willing to be acquired were either cashing out or not strong enough.
At the time, Jiumaojiu’s market value was HK$24.9 billion, below Yihai International, Haidilao’s supply-chain company, at HK$46.9 billion. But its brand-diversification strategy was worth studying because the group had started with Northwest Chinese cuisine under the Jiumaojiu brand, while its core growth engine had become Tai Er sauerkraut fish.
In 2020, Jiumaojiu Group generated revenue of RMB2.715 billion, up 1% year on year.
Jiumaojiu Northwest Cuisine generated RMB716 million, down 47.8% year on year. By the end of 2020 it had 98 stores, after the brand strategically retreated to South China and closed 55 stores during the pandemic.
Tai Er generated RMB1.962 billion in 2020, up 53.6% year on year and accounting for 72.3% of group revenue. Tai Er’s table-turnover rate was 3.8 times per day in 2020, down by 1 time per day. It opened 109 stores in 2020 and ended the year with 233 stores.
According to the 2021 interim report, Tai Er reached its 300th store in October 2021, and the group had incubated another new brand, Lai Meili Grilled Fish.
As of June 30, 2021, Jiumaojiu had 393 self-operated stores and 26 franchised stores across 70 Chinese cities. Beyond Jiumaojiu Northwest Cuisine and Tai Er, its portfolio included Song Hotpot Factory, Uncle Chef, 2 Egg Pancake, Tai Er Qianchuan, and Lai Meili Grilled Fish. Store distribution was still anchored in South China, then extended into Central and East China.
Founder Guan Yihong’s stated vision was to do something interesting that young people liked. His role inside the company was brand strategy, top-down category planning, product-manager thinking, and mystery-customer observation. He personally visited stores when incubating new brands and asked customers about product experience.
Jiumaojiu’s internal view was that restaurants could be fashionable, even though foodservice is often seen as labor-intensive and traditional.
Its definition of fashion had three parts.
First was appearance: interior design, plating, and attractive staff were all treated as part of customer experience.
Second was rapid iteration. The group’s restaurants were in shopping malls, which it viewed as the most current consumer environment. For a consumer business, especially restaurants, management believed it had to stay close to market and consumer changes and adjust operating strategy continuously.
Third was micro-innovation. Tai Er’s examples included chrysanthemum sprinkled on sauerkraut fish, USB charging ports at tables, and serving water at 60 degrees Celsius in summer and 70 degrees Celsius in winter. The principle was to keep making micro-innovations while rarely attempting disruptive innovation.
On technology, Jiumaojiu wanted systems to improve customer experience and operating efficiency. Tai Er was described as the first restaurant to move the full flow of ordering, in-meal service, checkout, and invoice issuance online. From day one, it removed cashier counters and cashiers, improving efficiency.
The group pursued an IT middle-platform strategy. In 2020, information systems were a priority; in June it began building its own information-system R&D team and custom-developing core middle-platform components to support operations management. The rationale was that foodservice lacked mature, tailored software vendors because the sector had relatively few large benchmark companies.
Self-development offered faster response, higher efficiency, customization to business needs, source-code ownership, and IP ownership, reducing continuity risk from changes in core technical staff. The downside was higher spending, estimated at several million RMB more per year, but Jiumaojiu considered the investment worthwhile.
On culture, the group separated corporate culture from brand culture. Corporate culture was intended to keep a large organization responsive through openness, tolerance for mistakes, and encouragement for young employees to test and innovate. Talent iteration and organizational evolution were priorities.
Brand culture meant building a brand personality around brand values, creating an emotional connection with customers. In a competitive restaurant market, after getting product, service, and hygiene right, Jiumaojiu wanted brands that could interact with young consumers and create something distinctive.
In its 2021 interim report, Jiumaojiu also discussed “business for good,” not as traditional corporate charity, but as embedding public-interest value in business activity, strategy, development, and resource allocation. One example cited was raising fish carefully and supplying good raw materials and products.
Jiumaojiu had five self-created brands across multiple cuisines and consumer groups at the time:
The article referenced 2019 data but did not reproduce the underlying table in text.
The group structure separated headquarters and brand teams. Unified middle and back-office functions, including IT, accounting, finance, organization development, procurement, and store development, served the front-end brands. Each brand had dedicated management, operations, product R&D, and marketing teams.
For expansion, the group chose rapid growth for Tai Er and strategic contraction for Jiumaojiu Northwest Cuisine. In 2020, Jiumaojiu closed 55 stores while Tai Er opened 109, above the expected 80.
In 2021, Jiumaojiu Northwest Cuisine was still closing stores while adjusting its single-store model. New and existing stores were being renovated, operating efficiency had improved somewhat, dish standardization was being raised, and dish combinations were being adjusted in batches. The biggest change in new stores was decoration.
The updated Jiumaojiu Northwest Cuisine model focused on two things: improving appearance through a younger design style, and making the model lighter. Tai Er’s style was simpler and black-and-white; Jiumaojiu’s was more red and festive.
In 2020, the group opened 9 stores in the new version. Overall, their sales per square meter were about 15% higher than old stores. Jiumaojiu concluded that the new model was better than the old one, but not good enough yet, and the sample size in store count and operating months was still limited.
When leases expired, good stores would renew, poor stores would close, and marginal cases would lean toward non-renewal. Longer term, the goal was not to maintain the brand by closing weak stores, but to raise brand energy and profitability through model upgrades.
The article also noted that Zheng Rushi, formerly of Jiumaojiu, had founded the Northwest cuisine brand Master Brother, which was being discussed in capital markets at a RMB3 billion valuation and was growing strongly.
Before Jiumaojiu Northwest Cuisine’s upgrade was confirmed, it was expected to avoid expansion and possibly continue shrinking. Uncle Chef and 2 Egg Pancake had no near-term expansion plans. Group growth therefore centered mainly on Tai Er, with Song also a possible contributor.
Tai Er continued expanding in 2021, with an expected 100-120 new stores.
A typical Tai Er store required investment of about RMB2.2-2.3 million, mainly for decoration and equipment, with an area of 250 square meters. New stores had little ramp-up period and could break even in the first month. A single store had 36 staff including new-store reserves, and the breakeven table-turnover rate was below 2.5 times. At the time, headquarters had about 200 office staff; the article also cited roughly 30 staff per store across 300 stores, 100 in IT, 50 in R&D, and 50 in store operations and maintenance.
Tai Er’s store-opening strategy had four parts: keep challenging strategic sites in tier-one and tier-two cities; densify blank trade areas in existing cities; radiate from existing central cities into lower-tier cities and trade areas; and fill provinces not yet covered. By year-end 2021, the article expected only Xinjiang, Tibet, and Taiwan to remain uncovered.
Tai Er initially took high-brand-energy sites first, then expanded outward from those points. Lower-tier markets had less demand intensity and capacity than tier-one and tier-two cities, but competition and conditions were also less harsh. The group’s view was that restaurant markets were competitive but fair: local pricing and brand-operation strategies needed adjustment based on purchasing power and preferences.
Tai Er was actively testing how far it could go down-market; the lowest level at the time was county-level cities. Its future logic was to first build a central city solidly and create enough brand energy, then radiate outward and downward. The group believed Guangzhou, Shenzhen, and Shanghai had largely been captured, while Beijing was not yet fully penetrated, weakening its radiation effect.
Tai Er’s densest markets were Guangzhou, Shenzhen, and Shanghai, each with about 30 stores. Additional stores would be opened if total revenue and profit increased despite cannibalization. Jiumaojiu had opened as many as 60 stores in Guangzhou historically, while about half the city’s areas were still uncovered, so Tai Er’s Guangzhou ceiling was estimated at around 100 stores.
Store planning was based on city GDP, population base, purchasing power, and fit between customer group and brand. Lower-tier cities had slightly better profit margins than higher-tier cities, mainly because of labor and rent, though the difference was not as large as imagined.
Tai Er’s target was to increase the number of openings each year, while growth rate would slow as the base grew. The article gave an example: 120 openings in 2021, possibly 120-150 the next year, and if 150 then 150-180 the year after. It also noted that Tai Er had doubled stores in the prior two to three years, which looked too fast and too aggressive. The main constraint was people; store openings depended on market, opportunity, supply chain, and talent.
In 2021, Jiumaojiu also opened Tai Er Qianchuan in Taikoo Hui. The article said this may have been because Tai Er sauerkraut fish could not enter the location, so Tai Er Qianchuan was opened instead. Tai Er Qianchuan was positioned as an authentic Sichuan restaurant with a modern Sichuan theme, with only one planned store at the time. It had 26 tables and 96 seats. Product R&D was continuing, with a dish library of more than 100 items ready to use. The concept story was that the founder had traveled across China before founding Tai Er and collected many famous dishes, now being brought out. Future R&D could produce sub-brands or new products for Tai Er to test the market.
Jiumaojiu also opened Lai Meili Grilled Fish, emphasizing live fish throughout the store display and serving process. Internally, the group considered grilled fish better than 95% of restaurant categories. It generally did not use the same fish as sauerkraut fish, though many farms overlapped.
The group also tested Meili Tea Shop inside stores. Tai Er stores were testing tea drinks as well, but tea revenue was low and accounted for a very small share; average consumption per customer was below 0.5 cups.
Song Hotpot evolved from cold-pot skewers. Jiumaojiu typically tested new brands near headquarters.
Song started reasonably well, and its word of mouth and brand tone looked somewhat like Tai Er five years earlier. It was still opening and adjusting at the same time.
The group’s first takeaway from Song was that hotpot was a large and attractive category worth investing in. But store-opening plans would not be too aggressive and would depend on market opportunities and team development.
Tai Er and Song had different competitive approaches. Tai Er initially ignored copycats because sauerkraut fish as a single-item category was still small; Jiumaojiu thought other brands could help educate the market while Tai Er held the leading position, similar to how McDonald’s and KFC eventually harvested lower-tier markets after many local imitators. Song was different because hotpot was large, mature, and full of strong players. It needed differentiation from the start and took action against copycats, including one brand invested in by Hu Haiquan.
Song had no direct benchmark competitor. Its positioning was young people’s hotpot. Site selection was similar to Tai Er: high-energy stores in city-level Class A trade areas, with opening speed kept measured. Customer experience was prioritized across product, hygiene, and appearance. It did not heavily assign performance pressure. Milk tea and alcoholic drinks contributed about 5% of revenue.
Tai Er generally chose core, trendier malls with many young customers. Song’s site opportunities overlapped with malls where Tai Er performed well.
For Song, an ideal store area was 400-600 square meters. Its Guangzhou store had table-turnover of about 5 times and seat-turnover above 4 times. In Shenzhen, lunch was roughly 80% full, while dinner, weekends, and holidays had queues. Haikou had little momentum, with seat-turnover below 2 times, which the group expected because per-customer spending was too high.
For Jiumaojiu, Song was still an internal entrepreneurial project, and such projects require both capability and luck. Its current tasks were product, experience, and team training. The group believed opening quality mattered more than opening speed because the market would always be there if the company had the ability to execute.
Jiumaojiu’s multi-brand strategy covered sauerkraut fish, hotpot, grilled fish, Sichuan cuisine, and related categories. Its category-screening framework had three elements: a mass-market category rather than a niche one; food that was naturally delicious; and a category that Jiumaojiu believed it could standardize using its methodology.
Among the three, taste came first, though taste and large market size reinforced each other. Sauerkraut fish was the example: naturally appealing, large enough that in many malls at least 6 of 10 Sichuan, Hunan, or even Cantonese restaurants might have sauerkraut fish or boiled fish, but not naturally standardized. Even with Tai Er’s exact seasoning sold for home use, the article argued it would be hard to reproduce store-level quality. Jiumaojiu’s method was to standardize a complex, skill-dependent dish.
The group believed it had experience in new restaurant brands. It judged prospects by popularity, reputation, whether the category was good, whether standardization was possible, and whether the brand could be built well. The most direct indicator was whether queues appeared at the door, followed by what customers said, what drove good or bad word of mouth, and whether pain points were real and solvable.
Because mall-based foodservice updates quickly and is highly competitive, Jiumaojiu wanted to stay close to market and consumer changes. Some ideas were too risky to test directly in Jiumaojiu or Tai Er, so new projects could be used as lower-pressure testing grounds and later grafted back into core brands.
Beyond its existing categories, Jiumaojiu was optimistic about barbecue and milk tea. Barbecue lacked a unified standard consumer perception and varied greatly by region, but the group did not rule out entering it.
Guan repeatedly emphasized internally that talent needed to iterate, the company should use more young people, and talent pipelines needed to be built. In execution, this became employee experience.
After 25 years in restaurants, the group had long emphasized customer experience: what customers see from signage and entry, hear in greetings and background music, smell, touch, and taste. It applied similar thinking to young employees’ work and living conditions.
Examples included letting young employees design offices according to their own ideas, placing staff dormitories within a 15-minute walk of restaurants, using managed residential communities with dedicated cleaning, preparing move-in-ready housing, enabling AR remote viewings, delivering customized dormitories within one week, solving housing issues through a mobile mini-program, and providing customized staff meals with regularly updated menus. These measures, together with competitive compensation, helped the company recruit a number of restaurant management talents during the pandemic.
Internally, each project team had equity. Jiumaojiu believed the restaurant industry remained labor-intensive and dependent on people and management, so core project-team interests should be directly tied to project outcomes and prospects.
Six or seven years earlier, Jiumaojiu had tried many brand-incubation models. It concluded that the most reliable approach was for the group or company core team to decide the category and basic framework, then build the team. This meant projects were not based on a single person’s inspiration but on underlying logic and self-consistency. That was why Jiumaojiu did not run 30-50 projects at once expecting 90% to fail and two or three to cover the losses.
For team-building, internal candidates were preferred when suitable because they understood the company and had stronger value alignment and coordination with middle and back-office teams. External hires were still useful because even strong companies needed new ideas and knowledge. Song’s project leader was internally developed. Lai Meili’s project leader was between external hire and internal development, because he had joined Jiumaojiu more than a year before leading Lai Meili.
The store-opening mechanism was that the development team found suitable locations based on operations requirements, then a committee of 6-7 department heads voted.
Equity incentives existed across project teams. Tai Er already had a clear equity-incentive mechanism. The 2 Egg Pancake management-team equity plan was in progress. Jiumaojiu Northwest Cuisine was focused on brand upgrading and would consider equity incentives later. Song Hotpot had a 15% equity-incentive pool, with the first 3% to be granted in 2021.
Jiumaojiu’s capital expenditure was mainly for stores and supply-chain assets. Supply chain was a 2020 priority, and the company conducted a share placement in July 2020 partly for this purpose.
For chain restaurants, Jiumaojiu viewed supply chain as the heart and stores as nerve endings. Its model strengthened middle and back-office systems from the top down while keeping stores light, with little decision-making authority at store level. Therefore supply chain and IT were especially important.
Compared with Western foodservice, Chinese food supply chains were less standardized. Western fast food was industrialized and standardized, while Chinese cuisine had rich variety but many recipes and flavor profiles, even within the same dish such as sauerkraut fish. Ten SKUs and 1,000 SKUs create very different supply-chain difficulty.
Jiumaojiu’s own supply chain was relatively manageable because each brand’s business model was designed to be simple. With Tai Er, sauerkraut fish depended mainly on pickled vegetables and sea bass; managing those two ingredients solved about 80% of the problem, leaving less central materials to address later. Song Hotpot also had limited SKUs, allowing each item to be made somewhat better than peers.
Supply-chain investment was long-cycle and asset-heavy, but the company considered it necessary for food safety, stable quality, and stable volume and price. For Tai Er, the benefit was clear because the two core ingredients could solve 80% of issues; the risk was concentration, since a problem in either ingredient would be serious.
In 2021, Jiumaojiu continued deep cooperation with core upstream suppliers. In 2020, through equity cooperation, it participated deeply in upstream sea-bass farming. It did not farm fish itself; partners did, while Jiumaojiu handled on-site technical supervision.
The group also planned central kitchens in regions with large store bases, such as South China, East China, and North China. It had acquired land in Nansha for a national supply-chain base, including a central kitchen, logistics, distribution, kitchen operations, quality control, R&D, training, and display functions. The project was expected to cost RMB500 million, including RMB100 million of working capital and RMB400 million of fixed assets plus land. The plan was to gradually move the existing Foshan, Guangdong central kitchen there in batches. Estimated capacity could support 1,000 stores.
The central kitchen’s designed delivery radius was 200 kilometers. Once built, it was expected to help food safety, stable quality, standardized operations, and sales per square meter.
Food safety came before cost in supply-chain planning, though the group also hoped to reduce cost through scale and industrialized fish farming. Sea bass was mainly produced in Guangzhou and Foshan; shipping to distant stores raised cost. Industrialized farming was expected to help solve geographic constraints. Jiumaojiu planned to achieve 100% self-supply of sea bass by the end of 2022.
The article argued that upstream farming and planting resources were not hard to find at scale because orders were locked in. If Jiumaojiu invested equity or capital, partners would be willing because sales were secure and profitability reasonable. The difference from third-party outsourcing was mainly lower moral hazard in areas such as excessive residues, unstable quality, food safety, and supply stability. Direct farming or planting to product also reduced intermediate circulation and could help costs.
Hotpot was easier than sauerkraut fish from a supply-chain perspective because it was one of Chinese foodservice’s largest and most mature categories, with ready-made consumer demand and upstream supply. Instead of farming sea bass or pickling vegetables, Jiumaojiu could select good ingredients, explain their origin and quality, and present how to eat them.
Logistics, warehousing, central-kitchen processing, and procurement could be shared across Jiumaojiu, Tai Er, Song, and other brands because all were mass-market restaurant formats using common ingredients such as pork, beef, lamb, vegetables, potatoes, tomatoes, sauces, and seasonings. Each brand could still have specialized supply-chain response teams for individualized needs.
Jiumaojiu’s strategy resembled a consumer goods company building a brand factory: different packages and categories fill supermarket shelves, while consumers buy different products that ultimately come from one company.
In restaurants, the fastest reusable traffic channel was the shopping mall. Unlike street barbecue stores, which require property negotiations one by one and cannot fully reuse the rise of malls, Jiumaojiu could place multiple brands in the same mall. If a customer did not want Northwest cuisine, they could choose sauerkraut fish; if not sauerkraut fish, hotpot; if not hotpot, grilled fish.
The company’s chosen path was to keep stores light, make the back-end supply chain heavier, and use that infrastructure to support fast front-end trial, error, and market capture. How far the model could go remained to be seen.
The article closed by contrasting this with multi-brand franchise operators that use new brands mainly to harvest franchisees. Jiumaojiu, by contrast, was described as staying closer to the core commercial path: self-operated brands, better products and service, and a larger restaurant footprint.
Note: market capitalization, valuation, share-placement, equity-incentive, IPO-related market references, store-opening targets, supply-chain budgets, and 2022 self-supply plans are historical figures and expectations from the 2021 source article.