What is Customer Demographics and Target Market of Xiabuxiabu Catering Management (China) Company?

Who are Xiabuxiabu's customers?

The Chinese catering market, especially hotpot, is seeing consumers prioritize value due to a 'consumption downgrade'. This makes understanding customer demographics vital for companies like Xiabuxiabu Catering Management (China) Holdings Co., Ltd. The company began with a focus on affordable, individual hotpot meals.

Xiabuxiabu pioneered the 'mini hotpot' concept, offering convenience and affordability. Later, they introduced Coucou in 2016, aiming for a more premium hotpot and tea experience, showing a shift towards serving diverse market segments.

Understanding the customer demographics and target market for Xiabuxiabu Catering Management (China) is crucial, especially after reporting a net loss of CNY 400.68 million in 2024 and a revenue decrease of 19.7%. This financial performance, impacted by weak consumption and competition, highlights the need to precisely identify and cater to consumer needs. The company's journey from its initial value-driven approach to a multi-brand strategy, including its Xiabuxiabu Catering Management (China) BCG Matrix, reflects an ongoing effort to adapt to market dynamics and consumer preferences.

Xiabuxiabu Catering Management primarily serves individual diners and small groups through its two distinct brands, Xiabuxiabu and Coucou. These brands are designed to cater to different consumer preferences and spending capacities within the hotpot market.

Xiabuxiabu Brand: Value-Focused Segment

The Xiabuxiabu brand targets a value-conscious demographic, offering an affordable and quick hotpot experience. In 2024, the average spending per customer was approximately CNY 54.8, a decrease from CNY 62.20 in 2023, reflecting a strategy to boost customer traffic through price adjustments.

Coucou Brand: Premium Market Segment

Conversely, the Coucou brand aims for a more premium market, providing a sophisticated hotpot and tea beverage experience. Average spending here fell to CNY 123.5 in 2024 from CNY 142.30 in 2023, indicating a broader trend of 'consumption downgrade' affecting even higher-end offerings.

Implied Xiabuxiabu Customer Profile

While specific demographic details are not public, the pricing and dining style suggest the Xiabuxiabu brand appeals to students, young professionals, and families seeking economical dining options.

Implied Coucou Customer Profile

The Coucou brand likely attracts customers with higher disposable incomes who are looking for a more upscale and social dining atmosphere.

Recent market shifts, particularly the 'consumption downgrade,' have influenced the company's approach to its target segments. The mid-to-high-end Coucou brand has experienced a greater impact, leading to a more selective store expansion strategy focused on quality and strategic partnerships. For the Xiabuxiabu brand, the primary focus in 2024 has been on increasing customer traffic through competitive pricing and enhancing its brand image, aligning with its Mission, Vision & Core Values of Xiabuxiabu Catering Management (China). The company's membership program, including its 'all-you-can-eat card,' has shown robust growth, with sales surpassing RMB 140 million in the first half of 2024, underscoring a strong base of loyal customers.

Key Customer Engagement Metrics

The company's membership program demonstrates a significant focus on customer retention and loyalty. Sales from the 'all-you-can-eat card' highlight a successful strategy for engaging a core customer base.

• Xiabuxiabu customer demographics are shifting towards value-seeking consumers.
• The Xiabuxiabu target market for the Coucou brand is more affluent.
• Recent price adjustments aim to boost the Xiabuxiabu customer profile for the main brand.
• The 'all-you-can-eat card' sales exceeding 140 million RMB in H1 2024 indicate strong customer loyalty.

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Understanding the customer needs and preferences is crucial for any food service business. For Xiabuxiabu, these vary significantly between its two main brands, catering to different market segments with distinct motivations and expectations.

Value and Convenience for Xiabuxiabu Brand

Customers of the Xiabuxiabu brand prioritize value for money and convenience. They seek a quick, satisfying hotpot experience, with purchasing behaviors showing a strong response to affordability.

Upscale Experience for Coucou Brand

The premium Coucou brand attracts customers looking for a more upscale, social, and experiential dining. Key decision criteria include ambiance, high-quality ingredients, and unique beverage offerings.

Communal Yet Personalized Dining

Psychological drivers for the Xiabuxiabu brand include a desire for a communal yet personalized dining experience. Individual hotpots offer flexibility, catering to diverse preferences within a group.

Addressing Hygienic Needs

A common pain point addressed by the individual hotpot model is the need for hygienic and customizable options. This caters to a growing consumer concern for food safety and personalization.

Adapting to 'Consumption Downgrade'

In response to the 'consumption downgrade' trend, there's a demand for even greater affordability and perceived value. This has led to strategic adjustments in pricing and offerings.

Enhancing Customer Stickiness

Loyalty is influenced by food quality, service consistency, and dining atmosphere. The company enhances customer stickiness through personalized member experiences and product variety.

Market trends and customer feedback directly shape product development and strategic decisions. For instance, the company has focused on enriching product variety and optimizing set meal advantages. In 2024, a reduction in set meal prices by approximately 10% lowered the average customer order value to CNY 54.8, reflecting a strategic move to align with affordability demands. To further enhance customer stickiness, personalized member experiences, such as birthday parties and customized gifts, are provided. The company also adapts its menu, introducing new items like the tangerine salt soup base and premium lamb chops for 2025. Furthermore, an expansion of the delivery business and the launch of new delivery products cater to evolving consumer usage patterns and convenience preferences, a strategy that has also been observed in the Competitors Landscape of Xiabuxiabu Catering Management (China).

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The company's geographical footprint is predominantly within China, with a strategic focus on expanding its presence across various provinces and key municipalities. As of December 31, 2024, the Group managed a total of 957 restaurants, with 938 located in Mainland China and the remainder in Hong Kong, Macau, and Taiwan.

Domestic Market Dominance

Xiabuxiabu operates a substantial network of restaurants primarily within China. By the end of 2024, 938 of its 957 global locations were situated in Mainland China, underscoring its deep penetration into the domestic market.

Brand Presence by Region

The Xiabuxiabu brand alone had 757 outlets in 115 cities across 21 provinces and 3 major municipalities. The Coucou brand contributed 181 restaurants across 38 cities in 18 provinces and 3 municipalities, alongside international outlets.

Strategic Expansion Focus

For 2025, the Xiabuxiabu brand is concentrating its expansion efforts on key cities like Beijing, Hebei, Shanghai, Guangzhou, and Shenzhen. This aligns with its strategy to strengthen its position in the East and South of China.

Adapting to Market Dynamics

The company is adjusting its expansion strategy for the Coucou brand, prioritizing first-tier cities and developed second-tier urban areas. This shift is influenced by the 'consumption downgrade' trend impacting its premium segment.

Regional differences in consumer demographics, preferences, and purchasing power significantly shape the company's operational and expansion strategies. For instance, the decision to slow Coucou's expansion in some second- and third-tier cities and refocus on more developed areas like Shanghai, Jiangsu, Zhejiang, Guangdong, and Beijing reflects an adaptation to current economic conditions and consumer behavior. This approach aims to optimize resource allocation and ensure brand alignment with market potential, a key aspect of understanding Target Market of Xiabuxiabu Catering Management (China). Despite plans to open at least 95 new Xiabuxiabu restaurants in 2025, the company strategically closed 219 outlets in 2024, indicating a proactive management of underperforming locations to maintain brand integrity and commercial viability.

Key Cities for Xiabuxiabu in 2025

The Xiabuxiabu brand will specifically focus its presence in Beijing, Hebei, Shanghai, Guangzhou, and Shenzhen for 2025, targeting major urban centers for growth.

Coucou's Refined Expansion Strategy

Coucou's expansion is now prioritizing first-tier cities and developed regions within second-tier cities, such as Shanghai and Guangdong, to counter the 'consumption downgrade' impact.

Restaurant Closures in 2024

In 2024, the company closed 219 restaurants, including 138 Xiabuxiabu and 73 Coucou outlets, as part of a strategic review of underperforming locations.

Historical Strongholds

Major Chinese cities like Beijing, Tianjin, and Shanghai have historically been strong markets for the company, influencing its ongoing development strategies.

Geographic Expansion Strategy

The company's strategy of 'expansion into the East and entering the South' guides its efforts to reshape brands in Southern China and secure advantageous areas in Northern China.

Localization of Offerings

Product development is localized to meet the diverse needs of consumers, particularly the younger generation, by adapting offerings across different price points through its supply chain network.

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The company employs a comprehensive strategy to attract and retain customers, focusing on digital engagement and loyalty programs. This approach aims to strengthen brand presence and encourage repeat business in a competitive market.

Digital Engagement and E-commerce Expansion

Leveraging platforms like TikTok and expanding e-commerce collaborations are key to enhancing brand image and driving traffic. The rapid growth of its delivery business, with new products designed for high click-through rates, targets the snack and cooked food market.

Loyalty Programs and Membership Growth

The 'privilege membership business' and 'all-you-can-eat card' program are central to customer retention. In the first half of 2024, card sales exceeded RMB 140 million, with average daily card sales per restaurant increasing significantly. A major upgrade in May 2024 saw monthly card sales jump from 80,000 to 240,000, a 3x increase.

Enhanced Member Value and Benefits

The company continuously improves its loyalty program by increasing member value and offering exclusive benefits through multi-brand collaborations and integrated online-offline experiences. For the Coucou brand, over 70% of dishes on a new menu version launched in February 2024 offer exclusive prices for 'all-you-can-eat card' holders.

Strategic Pricing and Employee Incentives

In 2024, price reductions were implemented, with the average customer order value for the main brand decreasing to CNY 54.8, a roughly 10% reduction in set meal prices, to attract more customers during a period of 'consumption downgrade.' An internal partner program, 'Return of the Phoenix,' aims to align front-line employees with the company's success through equity and profit-sharing.

Understanding the Xiabuxiabu customer profile involves recognizing their engagement with digital channels and their response to loyalty incentives. The company's efforts to enhance member value and adapt pricing reflect a dynamic Marketing Strategy of Xiabuxiabu Catering Management (China) designed to meet evolving consumer behavior.

Premium Member Spending

Premium members contributed RMB 540 million in consumption during the first half of 2024. Their average consumption was RMB 432, with a frequency of 4.9 times, significantly higher than ordinary members.

Delivery Business Focus

The company is rapidly expanding its delivery services. New delivery products are being launched with a focus on high click-through rates to capture market share in the snack and cooked food segments.

Price Adjustments

A strategic price reduction of approximately 10% on set meals for the main brand was implemented in 2024. This aims to boost customer flow by lowering the average order value.

Employee Incentive Program

The 'Return of the Phoenix' program is designed to share risks and benefits with front-line employees. This is achieved through equity and profit-sharing mechanisms to support future growth.

Brand-Specific Offers

Exclusive benefits are offered to loyalty members, such as the new menu version for the Coucou brand in February 2024. This menu provides special pricing for over 70% of dishes for 'all-you-can-eat card' holders.

Digital Marketing Channels

Digital marketing, including leveraging platforms like TikTok, is a key strategy to enhance brand image and reputation. Expanding e-commerce collaborations is also crucial for attracting customer traffic.

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