Hong Kong-listed Chinese restaurant operator Jiumaojiu is betting on younger consumers for growth in 2021

Jiumaojiu plans to open 100 to 120 Tai Er restaurants popular with younger consumers, with a third of these in the Greater Bay Area

Company’s total revenue has recovered to near pre Covid-19 levels, CFO says

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Published: 2:00pm, 17 Jan 2021Updated: 9:36pm, 17 Jan 2021

Guangzhou-based restaurants operator Jiumaojiu International Holdings is pivoting to younger consumers, as it emerges from the economic dislocation caused by the coronavirus pandemic.

The company, whose shares debuted in Hong Kong in January last year following a HK$2.08 billion (US$267.4 million) initial public offering (IPO), will double down on its Tai Er restaurants, which specialise in pickled sauerkraut fish and are popular among younger consumers. Jiumaojiu plans to open 100 to 120 Tai Er restaurants this year, with a third of these in the Greater Bay Area.

“The younger generation are the new mainstream consumers and opinion leaders” in China’s restaurant scene, Li Zhuoguang, Jiumaojiu’s chief financial officer, said in an interview. “The younger generation isn’t just influencing the catering industry – they are the new trend and the direction” of the catering industry in China, he added.

Jiumaojiu’s pivot to young diners does not come as a surprise – its Tai Er brand has been the quickest among its portfolio of five restaurant chains to recover from the pandemic, precisely because of its popularity among young diners. Jiumaojiu stated in its IPO prospectus that it planned to open 80 Tai Er restaurants in 2020. In the end, it opened 108 eateries under this brand, despite the coronavirus outbreak.

The company, on the whole, operates about 300 eateries across mainland China. All of them were closed from January 26 because of the pandemic, and operations resumed gradually from March. By May and June, Tai Er’s revenues had already exceeded those for the same period in 2019, Li said. “Those in their youth tend not to be as frightened by the coronavirus outbreak,” he added.

“The bad thing is that traffic flows in shopping malls have gone down, so customer flows still haven’t recovered to pre Covid-19 levels,” he said. “On the other hand, it is easier to find more attractive locations to open new stores, and to negotiate better leases with shopping malls.”