Haidilao industrialised its legendary service into China's first ¥10B restaurant chain

Zhang Yong started Haidilao in 1994 with 10,000 yuan, four tables and a hotpot stall in Jianyang, Sichuan. The brand grew on service verging on theatre — free manicures, throat lozenges, a named gift for the birthday diner. By 2011 it had about 40 stores and ¥1B in revenue, and Zhang told China Daily the company was 'forging a standardized catering chain company' — explicitly refusing to expand or list before the training, supply chain and service systems were built to scale.

The standardisation machine worked: employees were graded on customer satisfaction and initiative rather than sales, with mystery diners auditing stores and promotion strictly internal. Between 2015 and 2017 revenue grew from ¥5.76B to ¥10.6B at a 70.5% compound annual growth rate, as the chain added 36, 32 and then 98 restaurants a year — 273 by end-2017, making it China's first restaurant brand above ¥10B in annual revenue.

In September 2018 Haidilao listed in Hong Kong at HK$17.80; the shares rose more than 10% at the open and market capitalisation briefly passed HK$100B, closing at about HK$94.4B. Zhang and his wife held 57.67%.

From 40 stores (2011) to 363 at IPO (2018); revenue ¥5.76B (2015) → ¥10.6B (2017); market cap topped ¥100B on debut — China's first ¥10B-revenue restaurant brand

Standardising the unstandardisable: service was encoded into checklists, mystery-diner audits and, crucially, who got promoted — so the culture travelled instead of eroding.

The refusal to list early was a moat: rivals scaled capital first and service second; Haidilao built the system first, so its growth compounded instead of fracturing.

Everyone owns quality: grading staff on customer happiness and initiative, not sales, made every store's economics self-reinforcing rather than a race to the bottom.

If your edge is service, industrialise it before you scale: systems, audits and promotion rules can carry a culture across hundreds of stores — capital alone cannot

Haidilao kept growing after the 2018 IPO into one of the world's largest casual-dining chains, expanding overseas; years later the machine also proved it can over-run, with underperforming stores closed in 2021.