In London's Chinatown, groups of young Europeans now gather around steaming pots of spicy mala tang, celebrating birthdays with beer and cake. This cultural fusion represents the successful European expansion of Chinese hot pot chain Yang Guofu, which is redefining fast food for middle-class Europeans.
Global Strategy: Targeting Cultural High Ground
Since accelerating its globalization strategy in early 2022, Yang Guofu has established nearly 200 international locations. Unlike brands forced overseas by domestic competition, the chain continues strong growth in China, with franchise numbers doubling in 2023. European operations head Ping Junjie reveals overseas expansion became a core strategy under new CEO Yang Xingyu, who took leadership in June 2022.
Breaking from traditional Asian restaurant expansion patterns, Yang Guofu strategically prioritized Europe over Southeast Asia or America. Despite Europe's $840 billion food service market, Asian cuisine represents just 2-3%, with mala tang occupying less than 1% of that segment. The company views Europe as the cultural high ground for establishing premium brand positioning.
Premium Positioning: Challenging Japanese Ramen
Yang Guofu deliberately avoids budget positioning, instead framing mala tang as "light full-service dining" competing directly with Japanese ramen - the highest-priced Asian cuisine category in Europe. Japanese ramen commands 4-6% of Europe's Asian food market, valued at $500-800 million across 3,000 locations.
The chain specifically targets Japanese competitor Takumi, which operates 60+ European locations across eight countries with average checks of €21-25. Yang Guofu matches this pricing (€20-25), significantly above fast food alternatives. "We've already surpassed Takumi in customer ratings," Ping states. "Our two-year goal is to outperform them in both store count and revenue per location."
Industry Transformation: Standardization Meets Opportunity
Yang Guofu's expansion coincides with a generational shift in Europe's Chinese restaurant industry. Traditional establishments, typically family-run operations, face succession challenges as younger generations reject labor-intensive models. Rising European labor costs further drive demand for standardized, low-labor concepts.
"Berlin alone saw four to five new mala tang shops open between May and August 2024," Ping notes. "Many are independent operators who couldn't secure Yang Guofu franchises." The company currently operates approximately 50 European locations (including pending openings), predominantly in Germany, with only one corporate-owned store.
European franchisees invest €200,000-350,000 upfront for 120-150 square meter locations generating €80,000-100,000 monthly revenue. Flagship stores like Düsseldorf's can reach €180,000-200,000 monthly with €500,000+ investments. International operations now contribute over $14 million annually through franchise fees, branding materials, and ingredient sales.
Customer Evolution: From Students to Local Professionals
Yang Guofu's European clientele has shifted from predominantly Chinese students to 60-90% local residents, including students, professionals, and middle-class workers. The chain actively cultivates social dining occasions, with groups frequently spending over £200 on celebratory meals. In Spain and Germany, pairing mala tang with beer has emerged as an unexpected cultural hybrid.
To enhance community engagement, Yang Guofu transforms spaces into lifestyle venues. London's flagship location converted its basement into a live music venue, while another repurposed a former bank vault as a private karaoke room.
Operational Challenges: Compliance and Cultural Barriers
Yang Guofu maintains strict supply chain control from its Chinese production facilities, with European distribution centers planned for late 2024. The company adapts recipes to meet rigorous EU food standards regarding allergens, religious dietary restrictions, and animal product regulations.
Europe's fragmented regulatory landscape presents significant hurdles, with licensing processes often requiring six months per location. Cultural differences compound these challenges. "It sometimes feels less like selling food and more like facilitating cultural dialogue," Ping reflects.
Exclusive city franchise agreements help prevent internal competition but inadvertently spawn rival operators. Yang Guofu counters with three strategic advantages: established brand recognition among Chinese diaspora, consistent supply chain quality, and lean local teams averaging one staff member per 1.5 countries.
With 5-15 year leases reflecting long-term commitment, Yang Guofu aims to surpass Takumi as Europe's premier Asian chain. Whether this ambitious Chinese brand can sustain its European momentum remains to be seen, but its cultural and culinary impact already simmers across the continent.