This is an English adaptation of a FoodBud historical article originally published on December 15, 2021.
Helen’s built its pitch around a simple operating promise: do not make customers feel calculated against. For operators, the useful lesson is less about nightlife glamour and more about store economics, price architecture, labor systems, supply chain leverage, and digital control.
The company’s positioning was a sharp contrast with the author’s view of many small bars in Chinese tourist destinations: poor-quality drinks, high prices, fake invoices, aggressive selling, and even nightlife scams. Helen’s tried to create a different bar format: clear pricing, extreme value, limited upselling, measured service, and a relatively clean, comfortable space for casual socializing.
Helen’s described itself as an offline social platform for young people. Its first Helen’s-branded site opened in 2009, and by the time of the article the brand operated in more than 100 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, and Chengdu. The official site cited 736 stores nationwide.
Helen’s listed in Hong Kong in September 2021. At the time of writing, its market capitalization was HKD26.3 billion.
According to the latest figures cited in the article, Helen’s opened 80 stores in November 2021 and 372 new stores during 2021 to that point. As of December 9, 2021, it had 466 completed stores including newly opened units.
The article compares Helen’s less to restaurants or tea chains and more to Starbucks: both are space-led formats. Starbucks monetizes a premium coffee space; Helen’s monetized a low-price bar and social space. The growth engine was still store expansion, with the same three cost pressures facing foodservice operators: product inputs, labor, and rent.
Helen’s operated in China’s pub market, alongside bars, nightclubs, and KTV venues. The core consumers were young adults aged 18-24, mainly using bars for social occasions such as parties and gatherings. China Industry Information Network data cited 18-24 as the largest pub-consuming group in 2019, followed by 25-34.
Frost & Sullivan data cited in the article showed China’s pub industry revenue rising from about RMB84.4 billion in 2015 to about RMB117.9 billion in 2019, a CAGR of 8.7%. The number of pubs rose from about 34,700 at the end of 2015 to about 42,100 at the end of 2019, nearly 5% CAGR. In 2020, COVID-19 restrictions reduced the number of pubs to about 35,100 and industry revenue to RMB77.6 billion.
The market was expected to approach RMB200 billion by 2025, with faster penetration into third-tier-and-below cities and stronger same-store revenue improvement expected in first- and second-tier cities.
Founder Xu Bingzhong had been a special forces soldier and security guard, slept outdoors, lived in a basement, and spent more than a decade in the bar business. Before Helen’s, he opened a first bar in Pingyao, Shanxi in 2004, initially serving foreign tourists. He then traveled through multiple Chinese tourist destinations before opening Sakura Café in Vang Vieng, Laos, after passing through Vietnam.
In December 2006, he opened Sakura Café in Beijing. It succeeded at first, leading to additional stores, but business later cooled. The 2008 financial crisis forced store closures and pushed the team to reflect on internal causes, not only external conditions.
The first major turning point came on October 31, 2009, after the Helen’s brand was adopted. The Wudaokou store was in a remote location and initially struggled. Xu reportedly watched customers leave through wind and cold on a poorly lit route and asked how the company could thank them. That led to a large, high-cost Halloween gratitude campaign, which the article identifies as the origin of Helen’s gratitude culture.
A second turning point came in 2016, when Helen’s executives visited the United States. They observed that while monthly income in the U.S. could be USD4,000-5,000, beer from known brands could cost only USD7-8 or less. In China at that time, with monthly income around RMB4,000-5,000, a known-brand beer in even a third-tier city bar could cost tens of yuan. Helen’s formed the goal of letting Chinese consumers drink better beer at lower prices.
In 2018, Helen’s negotiated with an international beer supplier, asking that any procurement price reduction be passed directly into lower retail prices at its stores. The negotiation failed and the two sides stopped cooperating. Helen’s then decided to accelerate its private-label beer series and control more of the upstream and downstream supply chain.
Helen’s official WeChat account showed the price-cut path:
Even with raw material cost pressure in 2021 and small price increases, beer prices still did not exceed RMB10 per bottle. Helen’s had begun building its own data systems in 2013. The article says the company could see every component of the breakeven point, compare current conditions with 2019, and calculate how much cost reduction was needed across rent, labor, renovation, and other departments. That analysis led to a price increase of only RMB0.1-0.2 per bottle.
Helen’s also emphasized removing subtle psychological pressure from guests: RMB10 beers, limited service interruption, permission to bring outside food or delivery, and free beer while waiting in line. The article quotes a customer-style assessment that in Helen’s people do not compete over who buys expensive alcohol; they drink and chat with compatible people.
Helen’s built around standard stores of roughly 300-400 square meters, adjusted by site. If demand was too strong, it preferred to open a second store rather than a much larger flagship. Management viewed 800-1,000 square meter stores as unsuitable for Helen’s social-gathering model and hard to scale.
Its site-selection strategy resembled Haidilao in one respect: choosing locations near, but not necessarily inside, hot commercial districts. This lowered rent while still absorbing nearby traffic, assuming the brand could generate its own pull. Changsha’s Wuyi Square area was cited as an example where Helen’s had many stores around a popular district.
Some outside reports framed Helen’s as heavily campus-driven. Anxin Securities data, using Baidu Maps, said Helen’s had 25 open stores in Shanghai, including 17 near universities, or 68%, with coverage around Songjiang University Town, Fengxian University Town, and Lingang University Area.
Helen’s own internal store categories were different:
Performance across these formats was described as balanced, with no clear superiority of campus stores. Some commercial-district stores even outperformed campus stores by RMB100-200 in daily sales.
The single-store model cited average daily revenue of RMB11,700. Second- and third-tier cities performed better than first-tier cities. Average store breakeven took about three months. Third-tier stores could reach breakeven in one to two months, second-tier stores were around the average, and first-tier stores took three to four months due to higher costs. In October, store-level operating margin excluding headquarters allocation was single-digit in first-tier cities, 10%-20% in second-tier cities, and 20%-30% in third-tier cities, each with roughly 10 percentage points of improvement.
Peak consumption was typically 9-10 p.m. Stores operated until about 2-3 a.m. Guests usually arrived with two or three friends to drink, talk, and play dice, so dwell time was long. Turnover was around slightly more than two rounds.
Helen’s focused less on restaurant-style table turnover and more on the gap between sales and breakeven. Sales above breakeven meant profit; equal to breakeven meant flat; below breakeven meant loss.
Prospectus data showed single-store revenue of RMB807,200 in 2018, RMB2.4157 million in 2019, and RMB2.3945 million in 2020. Store operations were standardized by headquarters across decoration, operating hours, menus, and music. Effective operating hours were 18:30/19:00 to 2-3 a.m., averaging seven hours. Each store had around 36-50 tables, 144-180 seats, and about 10 employees with an average age of 22, including 3-4 front-of-house employees.
If Friday and Saturday were the baseline, Monday to Thursday sales could be 50%-70% of that level. The article noted a shift toward more weekend-concentrated consumption in 2021.
Helen’s cost work included labor optimization. A standard store previously had 10-12 employees; rapid 2021 expansion pushed some stores to 13 employees, creating underutilization. The company adjusted staffing to 9-10 employees per store and used more refined weekend scheduling. Rent negotiations also became easier because shopping malls were under pressure. The company also used longer leases to amortize costs. If implemented, these measures could reduce the breakeven point by around 10%.
New-store rollout followed five steps: signing, decoration, license processing, promotion, and opening. Decoration took about 40 days. From site signing to opening took about 2-3 months. Each store was about 300-500 square meters, hosted about 150-200 customers, had 36-50 tables, required capital expenditure of about RMB900,000-1 million, and most stores paid daily rent of about RMB3 per square meter.
New directly operated stores reached breakeven faster over time: about six months in 2018, five months in 2019, and three months in 2020. Stores opened before 2018, with more than four years of operating history, numbered about 80-90 and had stable daily sales around RMB15,000.
Helen’s culture emphasized mission, vision, and values. Its stated mission was to let young people enjoy themselves freely; its values were love, responsibility, and value.
The business value was to provide a social space for young people through extreme value and a suitable environment. For employees, expansion created a need for growth and promotion pathways. Xu Bingzhong said his purpose in starting the business was to let more people live better, including customers, entrepreneurial partners, and collaborators.
Helen’s expanded mainly through directly operated stores. It had previously used franchising but later brought those stores back under control. Direct operation made store-level talent development critical. Compared with hotpot service, Helen’s store tasks were simpler, but the expansion still required a talent pipeline.
Labor cost ratios were rising. In 2020, despite the pandemic, Helen’s raised wages twice to keep its promise, build team trust, and motivate employees. The hiring philosophy was honesty, diligence, and willingness to learn. Store recruitment signage emphasized promotion paths.
Helen’s built a training system including basic training, the Haixing Plan, store-manager boot camps, and Liangjian camps. It could train a new store manager in nine months. As of August 21, 2021, it had 554 store managers and 365 reserve store managers.
New employees received a letter from Xu. The article cites its message: if an employee one day leaves the company, it should be for a better life; if the company collapses one day, the employee should still be able to live well; the purpose of entrepreneurship is to help more people live better.
Helen’s service standard was summarized as “just enough.” Internally, the idea was “like a friend, but not a friend”: warm and caring, but still professional and aware of work boundaries. The purpose of service was to preserve a good social space without disturbing guests.
For employees, Helen’s promoted three “goods”: good meals, good income, and good atmosphere. Both support centers and stores had a kitchen-auntie role responsible for staff meals. The article summarizes the company’s line as: for customers, the eternal theme is price reduction; for partners, it is wage increases.
Marketing spend was low. Helen’s relied on WeChat official accounts, Douyin, Weibo, and store-level activities. In December 2020, the “Helen’s cola bucket” challenge went viral on Douyin, with related topic videos exceeding 1 billion views, making the cola bucket one of the hottest in-store products.
Each store maintained WeChat groups, often more than one. With more than 700 stores, Helen’s may have had more than 1,000 WeChat groups, filled with familiar consumers who could invite friends to drink together. Historically, acquisition relied on existing customers bringing new ones, keeping costs low. Future marketing was expected to become more precise, including new-store giveaways, repeat-customer targeting, and encouraging weekday consumption as traffic shifted toward Fridays and weekends during the pandemic.
Helen’s used a simplified menu to concentrate procurement and strengthen bargaining power. The menu had 41 products: 24 alcoholic drinks, 8 snacks, 6 soft drinks, and 3 other products.
The author had tried several products and rated the milk beer highly. Two craft beers were contract-produced by Huzhou Tesila. Their taste was described as light, similar to Haidilao’s beer supplied by Urbrew, perhaps slightly weaker but not far behind.
Helen’s internal view was that drink quality was not the most important factor. The bar created a social space; alcohol was the carrier. Drinks still needed to taste good and be fairly priced, but the product being sold was the full spatial experience.
Before 2016, Helen’s offered Western food such as salad, pasta, and pizza. It later simplified the menu to snacks that could be served quickly without heavy processing. With little fresh food, almost no kitchen, and no dependence on chefs, the low-SKU model reduced supply-chain complexity, increased inventory turnover, improved food safety control, and amplified cost control through scale.
Private-label drinks became more important. The gross margin of Helen’s own alcoholic drinks was 26 percentage points higher than third-party alcoholic drinks. Viral products such as the whisky cola bucket and Hi Dou could reach gross margins of 83.7%, while fruit beer and milk beer could reach 74.6%. Continued popularity and iteration of the cola bucket, Hi Dou, and fruit wines were expected to improve profitability and brand momentum.
Helen’s pricing was aggressive versus both peer bars and Tmall/JD supermarket prices. A 275 ml Helen’s craft beer sold for RMB7.8 per bottle. A 275 ml Budweiser sold for RMB9.8. Frost & Sullivan data cited an industry average of RMB15-30 for that Budweiser product, meaning Helen’s offered it 35%-67% below average market price.
Xu said private-label products were built from sincerity toward users. Most beers sold for under RMB10, returning channel and middleman margin to consumers so a bar visit felt closer to shopping in a supermarket. The article notes that successful private-label strategy is valuable but difficult, requiring user acceptance and trust. Helen’s users had formed a degree of culture, including the nickname “haidai” for fans.
Helen’s direct-operation model supported centralized digital management. Since 2015, it had developed internal systems covering centralized music control, supply chain management, and early scan-to-order implementation. These systems supported process-based and standardized chain management, private-label product development, and rapid store expansion.
Its self-developed Future BI integrated ERP and CRM into a unified analysis and management platform, improving real-time visibility into store operations. The system could track sales, traffic, weather, staffing, and electricity use for each store, helping judge staffing and energy efficiency.
Future BI also automated raw-material ordering based on product sales and real-time inventory, so store managers did not need to conduct manual inventory calculations. After store managers submitted orders, the system transferred them to procurement.
The ERP system digitized queueing, ordering, food preparation, inventory, logistics, finance, and HR. Headquarters could monitor revenue, SKU sales, and cost structure across more than 500 bars in real time.
The CRM used consumption records to push targeted marketing and analyze offline behavior, creating an online-offline marketing network.
Procurement was standardized and centralized. The internal control center managed purchasing and used ERP automation to export orders according to bar demand. Each week, the control center confirmed order quantities and purchase plans, entered approved plans into ERP, and sent them to suppliers. Third-party logistics providers or suppliers delivered to stores, and accepted goods were scanned into inventory through ERP.
Music was also centralized. Helen’s built a visual intelligent music management system. Only five employees were needed to control background music across all Helen’s bars nationwide. A unified national song library tagged songs by BPM and mood. Stores could select music based on operating hours, peak duration, customer mix, and holidays. The system could also adjust volume and rhythm based on daily traffic.
The music library was updated weekly, with themed selections before holidays. Stores could play special music for holidays or birthdays. Customers could recommend songs through a WeChat mini program integrated with the internal music system, comment on songs, like them, and share them with friends through social media.
Helen’s viewed its core competitive capability as store scale, the supply-chain purchasing advantage created by scale, and the resulting value-for-money price advantage.
The article identifies three competitive points:
Helen’s planned to open 900 new stores the following year, mainly in third-tier cities. The logic was lower cost, strong penetration for the “good and cheap” model, organizational capability for dispersed operations, and a need to hedge uncertainty.
Despite ongoing pandemic disruptions after Spring Festival, Helen’s believed it could remain profitable while opening 450 stores in 2021. It considered 2021 an extreme operating environment and did not reduce speed. IPO financing of more than RMB2 billion was described as enough to support development for the next one to two years.
Third-tier cities were prioritized because profit margins were higher and costs were lower. First-tier cities had much higher rent, labor, utilities, fixed costs, and opening expenses; first-tier opening costs were more than double those of third-tier cities. Helen’s was considering whether to use franchising in first-tier cities to share cost and risk.
Third-tier-and-below new stores performed well because supply was scarce but demand was significant. The low-price strategy had strong penetration. Pandemic controls were stricter in first- and second-tier cities, while third-tier cities were relatively less sensitive, so lower-tier expansion also spread pandemic risk.
The company had previously tested density in Wuhan, Changsha, and Yichang. Wuhan store count rose from more than 40 to more than 80, as the founder wanted to test the density ceiling. But many stores opened in the second half of the year, and Wuhan faced pandemic disruption in the third quarter. Helen’s later viewed the Wuhan densification decision as not rational enough and said it would pay more attention to rhythm and speed. In a third-tier city, it would first cultivate one store until queues appeared, then gradually densify rather than open seven or eight stores at once.
First-tier expansion would slow due to higher costs. The company hoped to improve experience through new materials and new store versions.
Site pipeline was a major strategic point for the following year. About 210 stores had been signed but not opened. In October 2021, the expansion team had identified more than 1,000 potential projects. Some were considered highly feasible even amid repeated pandemic disruption and external uncertainty; others were weaker and would wait for environmental improvement.
The article also points to challenges. Helen’s had started trying ecommerce and offline retail channels, including hiring salespeople in Wuhan in early 2021 to develop offline channels. Progress appeared slow, with little mention in financial reports or external communications. Taobao sales were described as average. The author argued Helen’s still needed the right trigger point and advertising investment to push retail products into more channels.
The larger challenge remained store economics. Helen’s focused on breakeven, but single-store revenue still needed improvement. Since price increases were not a preferred lever, the company needed to expand consumption scenarios. It had added barbecue items, but the author found some products weak, especially the chicken feet.
As private-label drink volume grew, Helen’s could potentially acquire backend factories to control part of product supply more tightly. The article notes that one independent director had previously been a senior executive at Budweiser, which could provide relevant guidance.
References cited in the original article included interviews and materials from Black Ant Capital, Anxin Securities, and Huatai Securities.
Note: IPO proceeds, market capitalization, store targets, market forecasts, margins, and expansion plans above are historical figures from the 2021 source article.