Rising living standards in urban areas, along with changes in consumption habits, help hot pot, grill, and draft beer chains prosper at breakneck growth rates.
The section of Tran Thai Tong street (Cau Giay, Hanoi) from the intersection with Duy Tan is less than half a kilometer long but has more than a dozen restaurants, more than half of which are hot pot chains and draft beer chains.
The business model of hot pot, grill, and draft beer is booming in big cities.
At an intersection on Trung Hoa Street, Hanoi, located on three out of four street corners are Korean barbecue restaurants, of which the two largest restaurants of Gogi House and King BBQ are located opposite each other.
Golden Gate Trading and Services Company (Golden Gate) was established in 2008 with the starting restaurant chain model of the Ashima brand.
Golden Gate’s competitor in the hot pot and grill restaurant chain market is Redsun.
Pushing into a market segment that is still quite new and attractive to customers, the revenue of these two names has increased sharply in recent years.
If Golden Gate had 227 restaurants by the end of 2017, Redsun’s entire system also had more than 140 restaurants.
These two companies also have in common a willingness to eliminate ineffective brands and focus on names that attract customers.
Applying the buffet business model of Golden Gate or Redsun is considered the main reason for the high growth rate of these two chains.
However, revenue is not the most impressive number of these two chains.
This is not difficult to explain when Golden Gate or Redsun restaurants mostly apply the buffet model – a business model that is considered to be super profitable in the culinary field if it has a large number of customers.
Golden Gate’s gross profit margin reached nearly 62% in 2017. In other words, for every 100 VND customers pay for using services at this chain’s restaurants, on average only 38 VND is for raw material costs.
According to the 2018 business plan, Golden Gate sets a revenue target of more than 4,400 billion VND this year, an increase of more than a trillion VND compared to 2017. The company hopes to open 89 more restaurants (36 restaurants in the area).
With the current high growth rate in revenue and the number of restaurants springing up like mushrooms after the rain, it is not difficult to evaluate the attractiveness of this business field.