Didn't last four years! Another mainland chain brand announces "full closure," completely bidding farewell to Hong Kong

(Source: Chief Business Think Tank)

Author | Zeng Youwei

Tai Er steadily advances, while Yao Yao exits helplessly.

In 2023, a wave of mainland dining brands surged into Hong Kong.

At that time, dozens of mainland dining brands made a grand entrance, full of momentum and confidence.

During that period, dining and tea brands viewed Hong Kong as a “gold mine.”

Leading the charge were mainland brands like Heytea, Haidilao, and Tai Er Spicy Fish, followed by brands like Green Tea, Ba Wang Tea Princess, and Cha Bai Dao entering Hong Kong.

A booming trend, unstoppable.

However, in just two to three years, the situation took a sharp turn, and “not adapting” became a frequently used term.

The Hunan cuisine brand “Luo Bo Xiang Nan” closed down just four months after opening. The “Ning Meng Meng Lemon Tea” and “Gu Lu Meatball House” in Mong Kok similarly left the market quietly.

Even the popular mainland barbecue restaurant “Xi Ta Lao Tai” announced a complete withdrawal from the Hong Kong market after less than three years.

As early as 2023, Xi Ta Lao Tai was reported to be in rent arrears just months after opening in Hong Kong.

Compared to the ambitious entry into Hong Kong, the current batch of mainland dining brands seems somewhat forlorn.

Recently, another name joined the “exit list.”

The mainland chain brand “Yao Yao Spicy Fish,” whose last store in Harbour City, Tsim Sha Tsui, closed on March 15.

This means that after four years in Hong Kong, Yao Yao Spicy Fish has now completely withdrawn from the market.

However, just as Yao Yao Spicy Fish exits with a whimper, another mainland spicy fish giant “Tai Er Spicy Fish” is steadily expanding in Hong Kong, now with eight stores and plans for further expansion.

Both brands originating from the mainland feature spicy fish, yet face the same high rents, discerning diners, and the diversion of “northbound consumption.” Why do their fates differ so starkly?

Failed in the rent game?

After four years, four stores closed.

Yao Yao Spicy Fish entered Hong Kong even earlier than Tai Er Spicy Fish.

In 2022, Yao Yao Spicy Fish ventured into Hong Kong, while Tai Er Spicy Fish only arrived at the end of 2023.

At that time, the early mover Yao Yao Spicy Fish quickly opened four stores in core business districts like Tsim Sha Tsui and Causeway Bay, thanks to its supply chain story of “traceable fish sources” and standardized quality. During those years, the store in Harbour City had long lines almost every day, seemingly a social media sensation.

Yet, in just four years, its presence shrank from four stores to one, ultimately to none.

According to reports from local media Sing Tao Daily, staff revealed that the store in Harbour City faced the expiration of its lease. The owner intended to continue operations but was unable to renew the lease with the landlord, leading to the unfortunate closure.

The landlord plans to combine the space and lease it to the more popular hot pot brand “Niu Qi.” Despite Yao Yao’s willingness to renew, they ultimately could not reach an agreement.

“Our boss said we can’t afford a space that big, we have to move.”

It is evident that in the prime business districts of Hong Kong, the current market presence and future potential of a brand are undoubtedly crucial chips in the rent negotiation.

With high rents, landlords naturally prefer brands that can offer stable rent, higher expected returns, and better popularity.

Clearly, in the landlord’s assessment, Yao Yao Spicy Fish was less appealing than the trending “Niu Qi.”

In a time when consumers particularly seek emotional value, trending projects that accurately resonate with consumer preferences and possess the ability to create buzz and attract foot traffic have become the more assured “premium assets” in the eyes of landlords, even key to maintaining the overall vitality of the business district.

While it is harsh, the reality is indeed stark; the business world values profit over sentiment.

Comparing with Tai Er

Where did Yao Yao Spicy Fish lose?

Looking back at Yao Yao Spicy Fish, it initially entered the Hong Kong market with the halo of a viral brand, but like all viral brands, its popularity has a cycle.

Moreover, a year later, the top mainland spicy fish brand Tai Er Spicy Fish came to compete, and Hong Kong people were more familiar with Tai Er Spicy Fish.

Even before the pandemic, many Hong Kong customers traveled specifically to consume or purchase from Tai Er Spicy Fish’s Shenzhen outlets.

After cross-border travel resumed, this trend intensified. In 2024, Tai Er’s store in Shenzhen’s Jinguanghua Plaza became a direct beneficiary of the resumption.

Since the full resumption of cross-border travel, the mall’s foot traffic has increased by 30%, with almost all new visitors being from Hong Kong.

The director of the planning department stated, “This is currently the highest-grossing Tai Er Spicy Fish store in the country, with daily long queues, over 70% of customers coming from Hong Kong.”

It can be said that the name “Tai Er Spicy Fish” is synonymous with spicy fish for Hong Kong people. This depth of brand recognition is a moat that is hard for other brands to cross.

This inherent advantage has placed Yao Yao Spicy Fish at a significant disadvantage in competition.

Furthermore, Tai Er Spicy Fish not only brings a stronger brand momentum and a more mature operating system but also actively localizes its flavors, such as introducing non-spicy versions that suit local tastes.

Additionally, it has launched a rich product matrix to meet the diverse taste demands of Hong Kong diners during group meals, extending consumption scenarios.

Moreover, given the high rents in Hong Kong, Tai Er Spicy Fish’s parent company, Jiu Mao Jiu Group, is a publicly listed company with stronger financial capabilities and brand management experience, making it better equipped to handle unexpected situations and risks.

In a mature market like Hong Kong, relying solely on initial traffic as a viral brand and standardized products cannot build a long-term competitive barrier.

The transition from a viral brand to a lasting one hinges on the product, but it also requires timely strategy adjustments, local adaptations, and continuous product innovation and experience refinement.

Moreover, a painful fact is that in recent years, the trend of “Hong Kong people going north” has made it more appealing to go to Shenzhen on weekends for the same spicy fish, where there are more choices, lower prices, and shopping opportunities, making the cost-effectiveness far superior to dining in Hong Kong.

Thus, regarding the complete closure of “Yao Yao Spicy Fish,” some netizens bluntly stated: "Four years of laughing quietly, thinking it would last a year. Did the business really investigate what Hong Kong people like to eat?

Everyone wants to open a branch in Hong Kong, but the people who actually want to eat will just go north."

Therefore, when the novelty of the product fades and competitiveness declines, the brand loses its bargaining power in the face of high rents.

Survival rules for mainland dining brands in Hong Kong

In recent years, the trend of Hong Kong people “going north” has led many mainland dining brands to seize the opportunity and “head south” to open stores.

When these brands first came to Hong Kong, they were thriving. Everyone hoped that mainland dining could revitalize Hong Kong’s dining industry.

Unfortunately, as idealistic as the vision was, the reality is harsh. In just a few years, many mainland dining outlets have closed down…

Upon deeper analysis of the reasons for these brands’ exits, common challenges emerge: high rents and labor costs in Hong Kong are two significant financial burdens that many brands accustomed to mainland operational models struggle to bear.

However, the deeper reason lies in the fundamental differences in market environments.

While the Hong Kong market shares cultural similarities with the mainland, consumer habits, taste preferences, rent structures, and labor regulations vary significantly.

Whether it is Tai Er Spicy Fish or Mixue Ice City, they have adapted deeply. Simply copying the mainland model can easily lead to failure due to “not adapting.”

Moreover, the Hong Kong market tests not only product taste but also the brand’s financial strength, supply chain management ability, and cost control levels.

Tai Er benefits from being backed by a publicly listed company, giving it advantages in supply chain and funding, allowing it to bear higher trial-and-error costs and longer market cultivation periods.

Mixue Ice City is also backed by a listed company, with nearly 50,000 stores nationwide. Such a vast network allows for stronger bargaining power over upstream costs, enabling it to offer competitive prices to consumers and capture market share through exceptional cost-effectiveness.

This is a scale capability that many small and medium brands cannot match.

On the other hand, Tai Er’s unique “two culture” and dining rituals, such as slogans during dish serving, create distinct brand memory points.

In the highly competitive Hong Kong dining market, a unique brand personality and consistent experience delivery are also important soft powers for attracting and retaining customers.

Therefore, mainland dining brands entering Hong Kong can no longer rely solely on the mindset of scale expansion; instead, they need to shift to refined operations.

Brands must not only have solid products and mature models but also the financial resilience to face high fixed costs, a deep understanding of local markets, and the cultural creativity to shape unique brand value.

In summary, making money in Hong Kong is not as easy as it sounds, but ultimately, the service industry is all about serving customers. As long as service is good, experiences are pleasant, and quality is high, consumers will naturally vote with their feet.

In conclusion

Hong Kong, as a front line and training ground for mainland brands, has always been a place of both opportunities and challenges.

For mainland dining, entering Hong Kong is no longer about simple scale expansion but requires a comprehensive consideration of brand resilience, operational intelligence, and cultural adaptability.

Only those brands that truly understand and embrace these rules can take root and grow in this “Pearl of the Orient,” moving towards a broader global market.