The China Observer

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Restauranteering in China: Little Sheep Hot Pot

An old friend was in town from the US a few weeks ago and we planned to meet for dinner. I asked him if there was anything he had been craving since his last visit. He told me that we needed to go for a hot pot dinner.

What is hot pot? Hot pot (火锅) is a truly unique dining experience in which restaurant patrons do their own cooking.  There are a variety of styles, but here are the basics of how it works. A giant bowl of soup sits on an electric burner at your table. The waiter brings you plates of raw beef, lamb, chicken, vegetables, tofu…there are a lot of choices. To cook the food simply use a spoon or chopsticks to dip the raw ingredients in the bowl of boiling soup and after a few seconds dinner is served.

For months I had been hearing about Little Sheep hot pot, but never had an opportunity to try it. Little Sheep is known for its fragrant soup base made from a secret mix of Chinese herbs and spices. The secret soup may be one of the keys to how a simple hot pot restaurant founded in 1999 in Baotou, Inner Mongolia, became a listed entity just ten years later. On June 12, 2008 backed by PE investors 3i and Prax Capital, with sponsorship from Merrill Lynch and Deutsche Bank, Little Sheep Group Ltd raised 780 million Hong Kong dollars in its IPO.

Here are the different elements of Little Sheep Group Ltd’s operations according to the Little Sheep website:

“Little Sheep has three holding subsidiaries (including Hong Kong Little Sheep Holding Co., Ltd, Canada Little Lamb Corporation, Inner Mongolia Little Lamb USA Corporation), the co-partnership Company (Little Sheep Japan Corporation), five Branches, two meat bases, the condiment base, the marketing sales Branch and the logistic Branch. Nowadays Little Sheep has 326 chain restaurants covering 34 provinces (including Hong Kong, Macao, Taiwan) in China. Additionally, there are also Little Sheep restaurants in USA, Japan and Canada.”
Note: There may be a job opening for an English editor at Little Sheep headquarters.

Little Sheep has a unique business model that involves franchising and food processing. The meat processing and condiment facilities supply the 326 restaurants as well as Chinese supermarkets. Consumers can purchase these products under the brand names  “Little Sheep,” “Yangwang,” and “Jinmei.” Little Sheep has become a trusted brand for the Chinese consumer, which is especially important in times like these when concern for food safety is intensifying as a result of the melamine milk and egg scandals.

Now back to my dinner at the Little Sheep restaurant in Beijing…

We went to the restaurant-lined Gui Jie Little Sheep location on a Saturday night at 6:15. Needless to say, we had to wait for a while. We sat on plastic stools while the waitresses walked around distributing glasses of warm soy milk and salty snack crackers. After about a 25-minute wait we finally heard them call a number. 35! We were number 94. It was at that point that we walked across the street to a competing hot pot restaurant for dinner. I am still waiting to try the secret soup…

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