Facing operational challenges or growth bottlenecks, several major restaurant chains are exploring new business avenues.

Recently, Xiabu Xiabu (00520.HK), known as the "first listed hot pot chain," unveiled its new brand "Xiabu Steak" with its first outlet in Beijing's Longde Plaza. Although not yet open, the move has drawn industry attention. This marks Xiabu Xiabu's entry into the steak market, diverging from its core identity as a Taiwanese-style individual hot pot brand. Public information indicates that "Xiabu Steak" will focus on affordable, high-quality "handcrafted Taiwanese-style thick-cut steak," targeting mass consumers.

**Struggles in the Hot Pot Business** This pivot is no accident but a strategic shift amid persistent financial pressure. Founded in 1998, Xiabu Xiabu expanded rapidly with its single-serving hot pot model and went public in 2014. However, recent years have seen declining fortunes, with four consecutive annual losses from 2021 to 2024, totaling over RMB 1.3 billion.

Core brand performance has been particularly weak. In H1 2025, Xiabu Xiabu's sales dropped 13.5% YoY to RMB 1.135 billion, with same-store sales down 15.6%. Store count also fell by 63 to 763. Its upscale sub-brand, Coucou, fared worse, with sales plunging 25.8% and nearly 30% of locations closing.

To counter this, Xiabu Xiabu launched initiatives like the "Phoenix Return" partnership program and seasonal promotions, reporting a 10–15% traffic increase recently. The steak venture follows Chairman He Guangqi's November announcement of a new brand to diversify its portfolio. Notably, its previous barbecue brand, "Chèn Shāo," shut all outlets in 2024, underscoring the risks of expansion.

**Industry-Wide Crossovers** Xiabu Xiabu's move reflects a broader trend as chains seek growth beyond saturated markets.

- **HAIDILAO (06862)**: Its "Red Pomegranate Project" has spawned 14 brands, including BBQ and fried chicken concepts, with 126 stores generating a 227% revenue jump in H1 2025. It recently debuted a "seafood market hot pot" format in Guangzhou, with plans to expand to other cities. - **JIUMAOJIU (09922)**: Its Tai Er brand, grappling with a 13% sales decline, tested Sichuan cuisine in Guangzhou, rebranding some outlets as "New Tai Er Fresh Sichuan Cuisine" with dishes like boiled fish and spicy chicken. - **KFC**: Its KPRO sub-brand, emphasizing healthy fast food, accelerated expansion, reaching 165 stores by late 2025.

**Expert Insights** Industry analyst Zhu Danpeng notes that many firms adopt a "multi-strategy" approach—spanning brands, categories, and channels—to capture diverse consumer segments. However, he cautions that diversification carries risks, especially for companies like Xiabu Xiabu with unstable core operations. "For giants like KFC, exploring coffee or health food leverages existing strengths. But weaker players risk overextension," he said.

As competition intensifies, these crossovers represent high-stakes bets on revival—or further strain.