Introduction
Haidilao is a high-quality hot pot brand founded in Jianyang, Sichuan, China in 1994. As
of June 30, 2021, it has opened 1,597 chain restaurants around the world (including China,
Singapore, the United States, Malaysia, etc.). Besides that, Haidilao always puts customers first
and provides them with personalized, enthusiastic, thoughtful, and innovative services as well as
safer, healthier, and more nutritious food. It also combines various features of hot pot by offering
a variety of hot pot soup bases, dishes, special sauces, snacks, and beverages to customers
(Haidilao, n.d.).
According to Haidilao International Holding, it has suspended or closed 300 stores by the
end of 2021due to the Covid-19 pandemic and too aggressive expansion of stores (Tan, 2021). In
the case of the Covid-19 pandemic, many countries have now reopened their borders for tourists,
and Brazil has done so without any restrictions (Capture the Atlas, 2022). Therefore, the epidemic
will not have much impact on the current expansion in Brazil. In terms of the store closure due to
an aggressive expansion plan, we decided to start by opening only one Haidilao restaurant in Brazil.
We chose Brazil because it is one of the emerging countries nowadays (World Population Review,
2022) and will be one of the largest economies in 2030 (Visual Capitalist, 2019). In addition, Brazil
has not had a Haidilao restaurant until now, so we think it would be a good opportunity to open
one in Brazil because of the many opportunities and possibilities that come with expanding a
business in a developing country.
Among so many cities in Brazil, we decided to open the first Haidilao restaurant in Rio de
Janeiro as it is a huge seaside city in Brazil. Since there is a lot of seafood in the ingredients of the
hot pot used by Haidilao, it is relatively convenient to open a restaurant in a city near the sea.
Besides that, Rio de Janeiro is recognized as one of the most interesting and beautiful urban centers
in the world and is also known for the beauty of its beaches, peaks, ridges, and hills. This city is
also a leisure center for both Brazilian and foreign tourists, where people in swimsuits can be seen
walking along the beaches and in the streets (Guimarães et al., 2022). Therefore, since Haidilao is
known worldwide, it is more likely to attract foreign tourists.
In Rio de Janeiro, there is a large shopping mall which is the RioSul Shopping Center. Due
to its location close to the city's main tourist attractions, it was soon included in the routes of those
visiting Rio (Welcome to the World, 2022). As the first shopping center in Rio de Janeiro, it brings
,together a variety of national and international stores such as well-known fashion brands,
restaurants, a fully equipped gym, and six cinemas (RIOSUL, n.d.). Moreover, there are also a lot
of tourist attractions in the city near the shopping center such as Cristo Redentor, Sugar Loaf,
Copacabana, Ipanema Beach, etc. (Rogers, 2020). Therefore, we decided to open the first Haidilao
restaurant in the RioSul Shopping Center.
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Product and Services Analysis
In addition to the food service, Haidilao restaurants also offer a variety of special services
to customers at each of their stores. However, each store's services may vary depending on the
local culture. For instance, some restaurants offer children's playgrounds with dedicated staff to
watch over them. While waiting in line, there are also fruits, snacks, and games to keep customers
from getting bored. Haidilao also offers freehand treatments and manicures to female customers,
whether while waiting or eating. In addition, there is also a noodle-making performance, Sichuan
face-change show as well as free leather shoe care (Haidilao, n.d.).
Since there are no hot pot restaurants like Haidilao in Rio de Janeiro, first-mover advantage
is the most appropriate international trade theory for this situation. This theory allows Haidilao to
build strong brand loyalty as well as recognition before other companies enter the market. Haidilao
can also establish the services as the industry standard in Rio, thus creating a strong market entry
barrier for potential competitors. Besides, Haidilao may be able to control various important
resources, such as locating the restaurant in a strategic location (the largest shopping center in Rio),
establishing good relationships and contracts with key suppliers, or hiring talented and suitable
employees (Corporate Finance Institute, 2022).
In addition, there are also drawbacks to being the first company in an industry. For instance,
to convince Brazilian consumers, especially those in Rio, to try hot pot, which may be a new
product for them, Haidilao may invest heavily in terms of cost and time as a first mover (Corporate
Finance Institute, 2022). However, Haidilao can be less concerned about this drawback because
Rio has not only locals but also a lot of tourists. Therefore, Haidilao can choose to target mainly
Asian tourists, with locals and other visitors as secondary targets. This can help avoid the large
investment in convincing local consumers.
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, Demographic Analysis
Brazil, officially known as the Federative Republic of Brazil, is not only the largest country
in South and Latin America but also the fifth largest in terms of size and population. According to
the latest data from the United Nations as of April 2022, Brazil has a population of approximately
215 million people and a population growth rate of 0.71%. As the most famous city in Brazil, Rio
de Janeiro has a population of about 6 million people and it ranks second in Brazil in terms of the
city population, after São Paulo, the largest city in the country. In addition, the total median age in
Brazil is 32.6 years, with a median age of 31.1 years for men and 32.8 years for women. Brazil has
a population of roughly 160 million people over the age of 18. Besides that, Christianity is the
main religion and Portuguese is the main and official language in Brazil (World Population Review,
2022). As of January 2022, the labor force participation rate in Brazil is 62.3% which means that
there are 62.3% of people are employed and unemployed but looking for work (Trading Economics,
2022). Since 62.3% is more than half, Haidilao won’t have to worry about the labor force in Brazil.
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Economic Anal
Brazil’s economy is the 12th biggest in the world and the largest in South America, with a GDP of
1.44 trillion USD and contributing 49.3% of South America’s GDP (Silver, 2022). Brazil’s GDP
per capita is forecast to reach 11,000 USD by the end of 2021 and to trend around 11,200 USD in
2022, according to Trading Economics global macro models and analysts. In 7 years, the inflation
rate has risen to its highest level of 10.79% (Ayres, 2022). Furthermore, the service sector is the
largest in Brazil, accounting for 63% of all sectors, and the food and beverage business has a
turnover of 170 billion USD every year, accounting for 9.5 percent of GDP. As a result, there is a
chance to benefit from running a restaurant. Furthermore, the tourist industry in Brazil has
contributed 78 billion USD in 2020 (Swiss Business Hub Brazil, 2022).
We are planning to expand HaiDiLao, a Chinese hotpot in Brazil instead of Argentina since Brazil
has higher commercial potential to operate a business as Argentina’s GDP is only 383 billion USD,
which is 3.8 times less than Brazil. Rio de Janeiro is the city where we intend to build the business
since it is one of the largest economic centres in South America, with which 60% of the Brazilians'
GDP is concentrated in it. Furthermore, Rio contributes 17.78% of Brazil's GDP, which is 256
billion USD in 2020, ranking 2nd in Brazil whereas Sao Paulo, Brazil’s capital city is 411 billion
