Eliza Wong
Restaurant Industry Shockwaves as Xi Bei Founder Issues Public Mea Culpa
In a stunning reversal, Xi Bei founder Jia Guolong (贾国龙) has publicly admitted fault in his handling of the recent pre-made dishes controversy that rocked China’s restaurant industry. The unexpected apology, delivered through industry chat groups on September 14, represents a significant shift in strategy for one of China’s most prominent restaurant chains. This development comes as national regulators prepare to release long-awaited standards for pre-made dishes, potentially transforming how the entire food service industry operates in China.
The controversy began when consumers discovered that Xi Bei, known for its premium positioning, extensively used pre-made dishes in its operations. The revelation sparked widespread debate about transparency and consumer rights in China’s rapidly evolving food service sector. With new national standards imminent, Jia’s apology signals a broader industry reckoning that could redefine customer expectations and operational practices across Chinese restaurants.
Jia Guolong’s Complete Strategy Reversal
The Xi Bei founder’s unexpected change in position demonstrates how quickly consumer sentiment can influence even established industry leaders. Jia’s commitment to complete transparency marks a potential turning point for the entire restaurant sector.
Public Admission of Fault
In his group chat message, Jia Guolong stated: “My response method was wrong, I will change. The cook revolves around the diner! You say how to make it better, we’ll do it that way.” This remarkable admission from a successful entrepreneur shows the growing power of consumer opinion in China’s market economy. His additional comment that “customers may abuse me a thousand times, I’ll treat customers like first love” further emphasizes this customer-first transformation.
Learning from Pang Donglai Model
Jia specifically pledged that Xi Bei would “thoroughly learn from Pang Donglai,” referring to the highly respected Henan-based retailer known for exceptional employee treatment and customer service. This commitment to emulate Pang Donglai’s transparent business practices suggests a fundamental shift in Xi Bei’s operational philosophy. The move could potentially set new industry standards for corporate transparency and customer relations in China’s competitive food service market.
Luo Yonghao Declares End to Conflict
The resolution of this controversy received significant validation when prominent entrepreneur and social media influencer Luo Yonghao (罗永浩) announced an end to his criticism of Xi Bei. His involvement had amplified the issue significantly, making his cessation of criticism particularly meaningful.
Call for Regulatory Clarity
On September 13, Luo posted on Weibo: “The Xi Bei matter can come to an end. Looking forward to the national regulations regarding pre-made dishes being introduced as soon as possible.” His statement came alongside reports that the National Health Commission’s “Pre-made Food Safety National Standard” draft had quietly passed expert review and would soon seek public feedback. This regulatory development represents a critical milestone for an industry that has operated with minimal standardization until now.
Balanced Perspective on Pre-made Dishes
Luo clarified his position, stating that he doesn’t oppose pre-made dishes personally and sometimes chooses them for convenience, time-saving, or when he has little appetite. However, he emphasized that while restaurants have the right to use pre-made dishes, consumers have the right to know whether they’re being served them. This balanced perspective reflects growing sophistication among Chinese consumers regarding food preparation methods and transparency expectations.
Implications for Pre-made Dishes Industry
The resolution of the Xi Bei controversy coincides with crucial regulatory developments that could reshape China’s food service industry. The upcoming national standards represent the most significant regulatory movement in this sector to date.
Standardization and Transparency Requirements
The new standards will for the first time require restaurants to disclose whether they use pre-made dishes and how they incorporate them into their menus. This mandatory disclosure represents a victory for consumer advocacy groups that have pushed for greater transparency in food preparation. Industry analysts predict this could lead to market segmentation between restaurants that emphasize fresh preparation and those that utilize pre-made options.
Market Impact and Consumer Response
– Increased consumer awareness about food preparation methods
– Potential premium pricing for freshly prepared dishes versus pre-made options
– Possible emergence of certification systems for “fresh-prepared” establishments
– Greater scrutiny of food sourcing and preparation across the industry
Market research indicates that Chinese consumers are increasingly concerned about food quality and transparency. A recent survey showed that 68% of urban consumers prefer restaurants that clearly disclose their use of pre-made dishes, suggesting that transparency could become a competitive advantage.
Broader Industry Implications
The Xi Bei incident reflects larger trends affecting China’s consumer markets, where increasingly sophisticated customers demand greater transparency and higher standards from brands. This case demonstrates how quickly social media can amplify consumer concerns and force operational changes even at major corporations.
Changing Consumer Expectations
Chinese consumers, particularly in urban areas, have developed more sophisticated expectations regarding food quality, safety, and transparency. The pre-made dishes controversy highlights how these evolving expectations can quickly become business-critical issues for restaurant chains. Companies that proactively address these concerns may gain significant competitive advantages in an increasingly discerning market.
Regulatory Environment Evolution
China’s regulatory framework for food safety continues to evolve rapidly, with authorities responding to both consumer concerns and industry development needs. The upcoming pre-made dishes standards represent part of this broader trend toward more comprehensive food safety regulation. Industry participants should expect continued regulatory development in this area as authorities balance consumer protection with industry growth objectives.
Future Outlook for Restaurant Industry
The resolution of the Xi Bei pre-made dishes controversy likely represents just the beginning of broader changes in China’s restaurant industry. Several key trends suggest continued evolution in how restaurants operate and communicate with customers.
Transparency as Competitive Advantage
Restaurants that embrace transparency regarding their ingredients and preparation methods may increasingly differentiate themselves in a crowded market. The Pang Donglai model that Jia Guolong referenced has demonstrated how exceptional transparency and customer service can build fierce brand loyalty. Other chains may follow Xi Bei’s lead in adopting more open communication practices.
Regulatory Compliance Challenges
As new standards take effect, restaurants will face compliance challenges including:
– Implementing new disclosure requirements
– Potentially reformulating menus to reduce pre-made components
– Training staff to communicate accurately about food preparation
– Adjusting supply chains to ensure compliance
These changes may particularly affect chain restaurants that have relied on pre-made dishes to maintain consistency across locations while controlling costs.
Strategic Considerations for Market Participants
The evolving situation around pre-made dishes presents both challenges and opportunities for various stakeholders in China’s food service ecosystem. Understanding these dynamics is crucial for investors, operators, and suppliers.
For Restaurant Operators
– Proactively review and potentially adjust pre-made dish usage
– Develop clear communication strategies regarding food preparation
– Consider consumer education about modern food preparation techniques
– Monitor regulatory developments closely to ensure timely compliance
For Investors and Analysts
– Evaluate how different restaurant chains are positioned regarding pre-made dish usage
– Assess management responsiveness to changing consumer preferences
– Monitor regulatory developments that could affect cost structures
– Identify potential winners and losers based on transparency practices
Path Forward for China’s Food Service Industry
The Xi Bei pre-made dishes controversy and its resolution highlight several critical trends that will likely shape China’s restaurant industry for years to come. The incident demonstrates the growing power of consumer opinion, the importance of transparency, and the evolving regulatory landscape.
As national standards for pre-made dishes approach implementation, the entire industry faces a period of adjustment and potential transformation. Restaurants that embrace transparency and adapt to changing consumer expectations may emerge stronger, while those that resist these changes could face increasing market pressure. The coming months will likely see continued debate and development around food preparation standards, consumer rights, and industry practices.
For international investors and industry observers, these developments offer valuable insights into the evolving nature of Chinese consumer markets and the business practices needed to succeed in this dynamic environment. The resolution of the Xi Bei situation suggests that responsiveness to consumer concerns and commitment to transparency may become increasingly important success factors in China’s competitive food service sector.
