The strongest sense of American community existence is about the Mid-Autumn Festival every year. Hong Kong celebrities holding posters of milky yellow flowing mooncakes are flooding the subway station.
But in fact, this Hong Kong established catering group is the mastermind behind many top tier restaurants in mainland China.
In 2019, American internet celebrity Shake Shack joined mainland China, and even earlier food and beverage brands such as Starbucks, Yuanqi Sushi, and Yifengtang opened stores in mainland China, which was later brought in by American groups. One of the specialized businesses of Meikou Group is to act as an agent to operate overseas catering brands.
Xiao Dewei, Chief Operating Officer of Meikou Group, recently announced that Meikou Group currently has about 2000 branches in mainland China, Hong Kong, Macau, and Southeast Asia. By region, Meikou has lost about 300 stores in mainland shopping malls, with over 200 of them located in urban areas of the Guangdong Hong Kong Macao Greater Bay Area.
Due to the fact that the Meikou Group is not listed, the details of its deeds have not been officially disclosed. But through its shareholders, the outside world can still gain a glimpse of its business.
Dairy Domestic Holdings Limited DFI Wholesale Group holds 50% equity in Meikou Group, which is also the parent enterprise of companies such as Huikang, IKEA, Wanning, and 7-11. According to its 2023 financial report, Meikou Group’s revenue for 2023 was $3.109 billion (approximately RMB 22.54 billion), while DFI Group’s operating costs for this segment in 2023 were $79 million, a year-on-year decrease of more than twice. Based on this, Meikou Group’s net cost for 2023 is approximately RMB 1.15 billion.
According to the financial report, the profit reduction reflects a significant recovery in business after the comprehensive decline of the economy in Hong Kong and mainland China, as well as a good performance in Southeast Asia. Meikou’s restaurants have seen strong growth this year, and mooncake sales have also remained stable.
However, Meikou Group is not overly optimistic because the catering industry has recovered from the COVID-19 epidemic. Similarly, it plans to adopt a prudent growth strategy in the mainland and Hong Kong shopping malls.
Xiao Dewei said that mainland consumers have a habit of buying and selling online, which makes growth more provocative. (Meikou) will spread to expand its business in first tier cities; As for the Hong Kong region, Meikou will expand its focus on mid priced catering, with an estimated net deletion of 30-40 stores annually. And this caution is due to the fact that in the current consumption situation, Hong Kong people are more cautious in their consumption, while visiting tourists are adding and changing their consumption forms, placing more emphasis on “hitting cards” and other emotions.
In addition, the climax of Hong Kong people’s “northward consumption” will inevitably hit the Hong Kong business of American speaking groups. During the recent Easter holiday, data from the Hong Kong Immigration Department showed that over 2.27 million Hong Kong residents were missing, with an additional 1.9 million going to the mainland,
Meikou’s caution is different from its past growth strategy of being more progressive.
On the eve of the closure of Shake Shack’s first store in Shanghai’s New Qiankun, Lou Wei, the general manager of the brand in China, once stated to the interface message that the brand features that are favored by young people, have a sense of fashion, and represent the trend of future consumption degradation are all highly valued by Meikou; In addition, it is also necessary to consider whether the brand can have sufficient shopping malls.
Going back 18 years from Shake Shack, Hong Kong’s American food group has become a trendy brand in the catering industry, accumulating a large amount of experience.
In May 2000, Starbucks closed its first store in Hong Kong at the Central Business Plaza. At the same time, Starbucks and Meikou Food Domestic Co., Ltd. cooperated and established Meikou Starbucks Coffee and Catering (South China) Co., Ltd., handing over the South China shopping mall to Meikou. This is also the beginning of Starbucks starting in mainland China. However, later Starbucks lost the operating rights of Meikou Group in mainland shopping malls, and Meikou currently only holds 100% of Starbucks’ operating rights in Hong Kong and Macau.
In 2006, Meikou Group launched the operation of sushi chain restaurants Yuanke Sushi and Qianyu, bringing Chinese consumers to the forefront of the Japanese cuisine civilization of “Kaiten” food delivery. Four years later, Meikou folded Yuanke sushi to Shenzhen, becoming the first store in mainland China. Similar Japanese brands include Qianliang, Japanese Lamian Noodles brand Yifengtang, etc. To some extent, Meikou’s operation in a series of Japanese food brands contributed to the cultivation of the later popular Japanese food market.
In Chinese cuisine, Meikou Wangzhong restaurants also have different positioning. From the introduction of the famous high-end grilled beef restaurant in China, Lawrence’s The Prime Rib, in 2006, to the mid range European restaurant, simplylife (also known as “Star Beauty”) in 2007, to the famous American restaurant, The Cheesecake Factory, in 2014. In addition, this year’s Shake Shack, from a few tens of yuan hamburger fast food to a few thousand yuan Chinese banquet, has met the needs of consumers for dining at different price points.
Most of the brands introduced by Meikou follow the same route, which is to first introduce them to Hong Kong, rely on the brand effectiveness established in Hong Kong, and then enter mainland Chinese shopping malls, gradually sinking from first tier cities in South China, East China, and North China. And the Meikou group also happened to have hit the time when mainland Chinese shopping malls have been downgraded in the past 20 years.
But there is always a place that is consuming downgrades – American groups are turning their attention to Southeast Asia.
At present, Meikou has nearly 800 branches in Southeast Asia, with about 500 in Thailand, about 100 in Vietnam, and about 170 in Singapore, with Starbucks accounting for the majority in the three regions. Xiao Dewei estimates that the overall number of branch stores in the group will decrease by 3 to 5% annually, with the main reduction being in Southeast Asia. Recently, Meikou’s major actions in Southeast Asia include opening its first Shake Shake store in Thailand in March 2023, and then opening its first Cheesecake Factory store in Thailand in early December.