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… platform called <a href="https://www.coze.com/">Coze</a>. Zhang opened Coze’s developer panel and was stunned—it was strikingly similar to Dify. Zhang recalled that, because Dify was moving fast when first launching, some words were misspelled in its interface. He said he didn’t expect to find the same typos in Coze—insinuating that Coze may have copied Dify.
Meanwhile, stronger competitors also raised customer expectations of AI. ConnectAI’s stay in Yiwu lasted less than three months. During those months, Meitu, Baidu, Taobao, and Temu—all eyeing Yiwu’s coffers—arrived as well.
Turning a set of complicated live stream operations into an AI assistant took ConnectAI three months. Just as it had a product to deliver, Feng realized the big players had already captured Yiwu. Former clients poured cold water on him: "Why doesn’t your AI help us interview hosts?" "Why can’t it do product image recognition like Baidu’s?"
As competition intensified, prices plunged and profits shrank. For instance, the cost of AI face-swapping in short dramas fell from RMB 100,000 for 100 minutes to mere four-figure RMB sums, courtesy of Baidu and Meitu. Only three months after starting AI face-swapping, Xia realized he had been outplayed by the big players with low prices.
Old customers gradually lost contact. Occasionally, an MCN would inquire, and Xia Nan would offer rock-bottom prices, offering to translate 100 dramas for just RMB 10,000 (USD 1,400). His coping mechanism became late-night snacking. By the end of 2023, AI face-swapping had nearly no demand, and Xia Nan gained several pounds from stress eating. Friends who saw him assumed he was doing well.
"Thought about finding a job?"
"No." Xia Nan answered without hesitation. Gaming, the metaverse, AI—none of these trends made him enough to retire. "But I’m not giving up. Why should only the bigwigs make money?"
While Coze ventured into freemium options, Zhang never considered lowering Dify’s pricing to compete with ByteDance. "Many customers come for the subsidies, and once those end, they leave," Zhang told 36Kr. He chose to stick with the original pricing, avoiding subsidies in favor of attracting long-term, committed customers.
The strategy of sacrificing some customer volume for healthier revenue proved effective. At an AI event, Zhang met with members of Coze’s team. A product manager admitted that Coze’s freemium approach had attracted fewer serious users compared to Dify.
The entrepreneurs who once struggled also worked to carve out new paths. After three failed ventures, the only remaining valuable asset for Xia Nan was his server farm’s computing power. As long as technology advances, he realized computing power is a steady need. His new direction: move upstream, selling resources.
He reviewed his assets—over 100 GPUs and cloud service reseller contacts. Believing he can make money off these, renewed excitement fueled him, and Xia Nan transformed into a computing power leasing agent, relaunching his business. Lately, Xia’s social media was active again. Posts had shifted from AI face-swapping videos to RTX 4090 machines that he was looking to lease out.
Feng saw Yiwu as an avenue for him to understand product-market fit. His team quickly regrouped, reaching out to old clients for research, seeking new opportunities. Many clients said that standardized smart office assistants still didn’t meet their unique needs. So, within weeks, the co-founders rolled up their sleeves and launched a platform to develop enterprise AI applications.
For Zhang and his co-founders at Dify, the most urgent task was enrolling in an English course. In May, Dify hosted its first developer meetup in Japan. In June, Zhang visited the epicenter of AI—the US—for the first time. He felt that his team’s growth had to match Dify’s global expansion. "Our team isn’t overseas, and our English still isn’t good enough."
"How long do you think Dify can last?" 36Kr asked Zhang.
"Until the next tech comes along to disrupt large models."
"And what will you be doing then?"
"Still starting businesses."
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/2983699449946114">article</a> was written by Zhou Xinyu for 36Kr.

In China, cities like Yiwu reveal a less known side of the AI boom

Deep Tech

China

… undermined the value proposition of proprietary models. "Companies with high budgets typically have their own tech teams and can develop directly using open-source models," the account manager said. "For companies lacking technical capability, open-source models have reshaped their expectations of what models should cost."
In 2023, a notable example emerged with the release of Llama 2, when one AI unicorn saw a client reduce its offer to just one-tenth of the original price. The limited ability of models to generate revenue means that, for now, AI companies must rely heavily on financing or AI applications that can quickly achieve product-market fit.
Currently, only two factors are attracting investment for AI model companies: impressive user data or a significant leap in model performance. One investor told 36Kr that companies need to match the capabilities of OpenAI’s latest model, o1, if they hope to excite the primary market.
Yet, by 2024, many AI companies have hit a technological bottleneck. Following the release of GPT-4, the pace of large-model development has slowed, and multimodal AI remains in its early, challenging stages. "Before GPT-4, OpenAI published detailed technical reports, offering a blueprint for others to follow. But once OpenAI stopped releasing those reports, Chinese companies lost their guide," an industry insider explained. "And even OpenAI’s approach may not be the right one."
A growing number of large model developers are losing direction and seeking stability amidst technological uncertainty. Companies that have stepped away from pre-trained models are now focusing on AI applications with clearer revenue potential. Several sources told 36Kr that one company’s overseas AI productivity tool generated the bulk of its revenue in 2024. "70% of the company’s workforce is now focused on products," and the underlying model for this tool is gradually shifting from self-developed to GPT-4 and GPT-4o.
Another company that initially focused on B2B in China also began releasing consumer-facing AI productivity and entertainment apps in mid-2024.
Meanwhile, those still committed to pre-trained models are exploring ways to cut costs and improve efficiency. One employee at an AI unicorn told 36Kr that the company has been cautious with its computational power spending, instead focusing on optimizing its training framework to reduce expenses.
For example, OpenAI’s latest model, o1, employs a self-play strategy, which enhances performance without increasing the number of parameters. This strategy has become a lifeline for companies seeking more cost-effective model training.
For the broader AI industry, abandoning pre-trained models is not necessarily a negative sign. Guangmi Li, CEO of Shixiang Tech, recently predicted that 80% of companies will abandon pre-training in the future.
The emerging consensus in Silicon Valley is that reinforcement learning could be the next major breakthrough, offering a way to fine-tune model parameters while controlling costs.
This shift indicates that, after a period of hype, companies are returning to rational thinking and reassessing both their technological paradigms and resource allocation strategies.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/2985143610892032">article</a> was written by Zhou Xinyu for 36Kr.

Two of China’s "AI tigers" abandon pre-trained models to pursue app-driven growth

China Tech

Artificial intelligence

China has kicked off a trial for cross-border payments using central bank digital currencies (CBDCs) with Saudi Arabia and other partners, eyeing alternative uses for the digital yuan amid its struggles in the home market.
Other participants include Hong Kong, Thailand, and the UAE. The International Monetary Fund and other organizations are also taking part as observers.
CBDCs use blockchain technology to record transactions. They can allow cross-border payments to be completed within seconds and cut costs by up to 50%, according to the People's Bank of China (PBOC).
PBOC deputy governor Lu Lei said in September that the central bank wanted to promote interconnectivity in global financial infrastructure under a multilateral framework. The new trial aims to find solutions to issues that arise in cross-border settlements, Lu said.
Currently, international payments pass through so-called correspondent banks based on orders placed via the SWIFT messaging platform. The process can take a few days to about a week.
Cross-border payments are also typically made in dollars. Low-cost transfers using CBDCs could help promote non-dollar transactions and curb China's dependence on the dollar.
In light of China's progress in the field, seven central banks—including in Japan, the US, and Europe—also announced a <a title="" href="https://asia.nikkei.com/Business/Markets/Currencies/Top-central-banks-to-lay-groundwork-for-instant-digital-cross-border-payments" target="_blank" rel="noopener">joint trial for CBDC payments</a> in April with private sector partners.
China "aims to take a leading role in creating new technologies and standards for next-generation transactions," said Naoki Tsukioka of Mizuho Research &amp; Technologies.
The new trial comes as the digital yuan face headwinds at home.
The PBOC launched a research group in 2014 toward launching the digital yuan, eyeing its use in China's retail sector. The idea was for commercial banks to launch digital wallets that could be used for payments at restaurants and other stores by scanning a code.
The first pilot program kicked off in October 2020 in Shenzhen. Access has since been expanded to 26 areas across 17 provinces and municipalities.
China has also experimented with using the digital yuan for salary and tax payments. Digital yuan transactions totaled RMB 7 trillion yuan (USD 992 billion) at the end of June, according to the PBOC.
Still, there is no clear path for its full-scale launch. The Communist Party Central Committee vowed "steady progress" in the research, development, and application of the digital yuan in a July resolution but did not lay out any specific steps.
Part of the challenge is that Chinese users see little advantage to the digital yuan over popular private sector payment apps, such as WeChat Pay and Alipay. More than 80% of payment transactions in China are already cashless, the Payments Japan Association has estimated.
"I used the digital yuan during a pilot, but it's basically the same thing as WeChat Pay and other platforms," a restaurant worker in Beijing said.
This article first appeared on <a tabindex="0" href="https://asia.nikkei.com/Business/Markets/Currencies/China-explores-cross-border-uses-for-digital-yuan-in-new-trial" rel="noopener noreferrer" data-token-index="1">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing <a tabindex="0" href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/" rel="noopener noreferrer" data-token-index="3">partnership with Nikkei</a>.

China explores cross-border uses for digital yuan in new trial

Blockchain

Payments

Digital Banks

… srcset="https://console.kr-asia.com/wp-content/uploads/2024/10/AgAABnOQU_QS0tDObWFEDqWT2pDfLxR8-1024x768.jpeg 1024w, https://console.kr-asia.com/wp-content/uploads/2024/10/AgAABnOQU_QS0tDObWFEDqWT2pDfLxR8-300x225.jpeg 300w, https://console.kr-asia.com/wp-content/uploads/2024/10/AgAABnOQU_QS0tDObWFEDqWT2pDfLxR8-768x576.jpeg 768w, https://console.kr-asia.com/wp-content/uploads/2024/10/AgAABnOQU_QS0tDObWFEDqWT2pDfLxR8-1536x1152.jpeg 1536w, https://console.kr-asia.com/wp-content/uploads/2024/10/AgAABnOQU_QS0tDObWFEDqWT2pDfLxR8-2048x1536.jpeg 2048w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption id="caption-attachment-150497" class="wp-caption-text">Sunmi Technology’s booth at GITEX Global 2024, featuring its products and solutions. Photo source: 36Kr Global.</figcaption></figure>
Other companies, such as <a href="http://www.sztozed.com/en/">Tozed Kangwei</a>, a leading Wi-Fi router manufacturer, have also leveraged GITEX Global to expand their Middle Eastern presence. The company’s global shipments of 4G and 5G CPE devices rank just behind Huawei and ZTE. Despite its relatively low profile in China, Tozed Kangwei has been participating in GITEX Global for nearly a decade, and the event has been instrumental in their international success.
<a href="https://www.pudurobotics.com/">Pudu Robotics</a>, another Chinese exhibitor, showcased its cleaning robots, attracting interest from local buyers. Its wall-climbing cleaning robot, in particular, garnered attention due to the labor shortages and extreme heat in the region, making automation a necessity.
<h3>Setting up the Middle East as a hub for global innovation</h3>
GITEX Global, as one of the world’s most well-known tech exhibitions, has once again demonstrated the Middle East’s growing role in the global tech landscape. The event serves as a critical platform for companies looking to enter the region or use it as a springboard to international markets. The UAE’s ambition to become a leader in AI, coupled with its openness to global partnerships, creates fertile ground for innovation-driven companies from around the world.
Next year, GITEX Global will expand further with the launch of <a href="https://www.gitexasia.com/">GITEX Asia</a> in Singapore, scheduled for April 23–25, 2025.

GITEX Global 2024: AI at the center of global innovation

… https://console.kr-asia.com/wp-content/uploads/2024/10/Jetour-Burj-Khalifa.jpg 1080w" sizes="(max-width: 640px) 100vw, 640px" /><figcaption id="caption-attachment-150422" class="wp-caption-text">Photo of a promotional lighting display by Jetour on the Burj Khalifa. Photo source: Al Shasia.</figcaption></figure>
The success of Jetour’s partnership with Elite Cars offers valuable insights for other Chinese automakers entering the Middle East. According to internal data, Jetour is now the bestselling Chinese car brand in the UAE, and Elite Cars received the “Market Share Breakthrough Award” at Jetour’s 2024 business conference.
Analyzing the factors behind Jetour’s success highlights several key lessons for automakers in the Middle East:
<ul>
<li aria-level="1">Product: Rapid growth requires a deep understanding of local consumer needs, with the right product serving as the foundation.</li>
<li aria-level="1">Pricing: Mastering the balance between perceived value and actual price is critical. Positioning a mid-range product as high-end has proven to be a winning formula.</li>
<li aria-level="1">Partnerships: Local partnerships should be based on complementary strengths. The right partner depends on the automaker’s own capabilities.</li>
</ul>
Jetour has capitalized on a unique window of opportunity in the UAE and the Middle East, moving swiftly while other Chinese automakers are still refining their strategies. However, as more Chinese brands expand into the region, Jetour will face increasing competition in the future.
This <a href="https://mp.weixin.qq.com/s/FzAo0pGu9BfMVpXyjulMQw">article</a> was adapted based on a feature originally written by and published on Al Shasia (WeChat ID: ShunShiZhongDong). KrASIA is authorized to translate, adapt, and publish its contents.

Jetour is the hottest car brand in Dubai—here’s why

Transportation

Mobility

MENA

Japanese media companies Kadokawa and Bandai Namco Holdings are acquiring independent anime studios as they struggle to supply enough content for a booming overseas market due to a shortage of workers.
By deepening ties with affiliated studios, the companies aim to boost production capacity and the supply of high-quality content, giving momentum to efforts to develop intellectual property abroad.
In July, Kadokawa said it purchased Doga Kobo, the studio behind the hit anime Oshi no Ko. Kadokawa now counts six anime studios as subsidiaries.
By 2025, Kadokawa seeks to consolidate legal, accounting and similar administrative functions. The animation industry relies heavily on freelancers, so the process of managing contracts and invoices is often complicated.
Bringing those tasks under one roof will let Kadokawa cut expenses and offer better compensation to employees.
"There's an urgent need to implement business systems to improve the quality of creative works and pay for animators," said Takeshi Kikuchi, chief anime officer at Kadokawa.
More than 300 television anime titles are now produced annually, along with an increasing number of major anime movies. Production costs have swelled, and schedules run longer as studios seek to meet mounting fan expectations for appealing artwork and dynamic action sequences.
The labor shortage in the anime industry is spurring changes to the business models. Until now, so-called production committees were formed from investments by TV channels, publishers, and other stakeholders that held the IP rights to an anime.
Roles were clearly demarcated in this arrangement. Planning and distribution was separated from the production of the works.
Those lines increasingly are blurred. For example, production companies might have subsidiaries handle the animation and may also invest directly in the production committee.
Production company sources have reported waiting 2–3 years for an outside studio to complete a title, which they said illustrates the growing need to possess in-house animation capabilities.
When it comes to an anime based on a hit original work, having the TV series air two years later risks missing out on the height of the work's popularity. Anime studios also take on risk by investing in a production committee, but they would reap recurring earnings if the series they animate becomes a hit.
Bandai Namco is improving productivity in its anime business through integration. The subsidiary Bandai Namco Filmworks came into being in 2022 after Bandai folded its anime operations into Sunrise, the affiliate studio behind the Gundam franchise.
As part of the consolidation, former Sunrise studios once scattered in multiple locations were moved into the building serving as the home office for Bandai Namco Filmworks. Roughly a dozen animation teams were reorganized into five groups.
"The groups are divided into their areas of expertise to maintain diversity, and by combining locations, they are able to help each other out in line with how busy their schedules are," said Shin Sasaki, managing director at Bandai Namco Filmworks.
In April, Bandai Namco Filmworks acquired anime studio Eightbit as a wholly owned subsidiary. The two sides share processes and coordinate production and release schedules.
Toho, the Japanese movie company, bought anime studio Science Saru and turned it into a wholly owned subsidiary this June. Science Saru animated the movie Inu-Oh.
"Science Saru is highly regarded overseas," said Keiji Ota, Toho's managing executive officer who heads the anime group. The group is also the parent of Toho Animation Studio.
Japan's anime market, including goods and related products, totaled JPY 2.92 trillion yen (USD 20.4 billion) in 2022, the Association of Japanese Animations reported. The scale is double from a decade prior.
Despite the growing market, animator pay has not kept up. The Japan Research Institute reported that animators make a median of roughly JPY 1,300 (USD 9.1) an hour, which is JPY 1,100 (USD 7.7) lower than the overall average for all industries.
This could change with the buyout of anime studios by larger companies. Toho said it will raise the pay levels of newly acquired employees to match that of Toho Animation Studio. Bandai Namco Filmworks pledged to improve the working hours to correspond with Bandai standards.
"Production studios often run shoestring operations even if they produce popular titles, so being a subsidiary of a large company will lead to business stability," said Yosuke Yasui, senior economist at the Japan Research Institute. "However, it is necessary to watch closely whether [a takeover] will lead to the development of young talent, and not just the short-term profit of the studio."
This article first appeared on <a tabindex="0" href="https://asia.nikkei.com/Business/Media-Entertainment/Bandai-Kadokawa-snatch-up-anime-studios-in-scramble-for-talent" rel="noopener noreferrer" data-token-index="1">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing <a tabindex="0" href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/" rel="noopener noreferrer" data-token-index="3">partnership with Nikkei</a>.

Bandai, Kadokawa snatch up anime studios in scramble for talent

Creative

Content

Japan

… in the US coming from?
Since 2022, posts on anonymous online forums have been asking why there is so much anti-EV rhetoric in the US lately. One reply suggested that USD 30 million had been spent on a covert PR campaign—and the amount is still increasing.
Historically, the debate over EVs in the US has been a contentious issue between Republicans and Democrats.
During Bill Clinton’s presidency, renewable energy companies lobbied for the “Partnership for a New Generation of Vehicles” in 1993, resulting in a slew of policies supporting new energy vehicle (NEV) development.
When George W Bush took office, he was lobbied by the oil industry, obstructed renewable energy progress, and in 2000, withdrew the US from the Kyoto Protocol, claiming that China was the largest carbon emitter.
Barack Obama, on the other hand, heavily subsidized renewable energy and announced plans to invest USD 150 billion over a decade in clean energy.
Donald Trump reversed course again, strongly opposing EVs, calling them “job killers” and a “green new scam.”
Under Biden’s administration, the US has taken a more supportive approach, continuing to increase investment in EV infrastructure and offering more support to domestic EV industries.
This partisan divide has only deepened over time.
According to <a href="https://www.washingtonpost.com/climate-environment/2024/05/06/ev-polarization-republicans-electric-cars/">The Washington Post</a>, most EV buyers in the US are Democrats, with most Republicans not yet joining in. Additionally, a March Gallup poll found that 61% of Democrats are “seriously considering” or “might consider” buying an EV in the future, while only 24% of Republicans feel the same.
Republicans have been lobbying from various angles, claiming that mandates to buy EVs infringe on personal freedom, disrupt America’s economic stability, and that subsidies for EVs are funded by taxpayers, while only wealthy people can afford to buy them—essentially arguing that the Democratic coastal elites are benefiting themselves with these tax breaks.
Due to this partisan divide, the development of EVs in the US has been a rollercoaster. Trump even said during a recent speech that “[he] will end the electric vehicle mandate on day one,” if reelected to office.
This resistance stems partly from the desire to win votes from traditional automotive industry workers and partly to protect the US oil business. Oil giants like the Koch brothers and ExxonMobil, one of the largest publicly traded oil and petrochemical companies in the world, are key backers of Republican efforts. In fact, in 2016, Trump appointed the chairman of ExxonMobil as the US secretary of state.
The greatest obstacle to EV development in the US, however, comes from the oil industry itself.
Surprisingly, ExxonMobil was actually one of the pioneers in lithium battery development. Following the first oil crisis, ExxonMobil viewed renewable energy as the future and created the world’s first lithium battery in 1976. However, when oil prices dropped, the company refused to mass produce the battery and instead doubled down on oil.
As things took off, ExxonMobil, ChevronTexaco, and ConocoPhillips grew concerned that the widespread adoption of EVs in the US would reduce gasoline consumption by 370 billion liters annually. These oil giants began suppressing NEVs, buying up motor companies, placing restrictions in the supply chain, and hindering car manufacturers from purchasing motors. They even acquired numerous startups with patents related to EVs and shelved them, stalling the development of electrification.
Despite this resistance, global trends show that gas stations are disappearing while charging stations are increasing.
For example, in China, according to the latest blue book on the domestic petroleum industry, there were about 105,800 gas stations nationwide in 2023, down by more than 1,800 from the previous year. Since peaking in 2020, the number of gas stations has steadily declined.
The US, which has the highest per capita vehicle ownership in the world, had 200,000 gas stations in 1992, but that was its historical peak. Since then, the number has declined, from around 170,000 in 2000 to about 150,000 in 2012. Today, there are approximately 130,000 gas stations left.
Japan has seen a similar trend. After peaking at close to 60,000 gas stations in 1994, the number has steadily decreased. In 2022, 76 new gas stations opened, while 555 closed—a closure rate over seven times higher than new openings. Japan’s gas stations continue to dwindle.
The Biden administration remains committed to pushing domestic EV policies. Recently, it announced over USD 3 billion in funding for US companies to promote the domestic production of advanced batteries and other materials used in EVs. Should Kamala Harris win the presidential election and continue promoting EVs, it may help revive the US EV market.
On September 22, <a href="https://www.cbsnews.com/news/trump-harris-poll-debate-economy-09-22-2024/">CBS</a> and <a href="https://www.nbcnews.com/politics/2024-election/poll-newly-popular-harris-challenging-trump-change-rcna171308">NBC</a> released new poll results showing that Harris holds the largest lead over Trump to date, though it’s only by 4–5 percentage points. In the 2016 and 2020 elections, Democratic candidates were leading by at least twice as much at this stage in the race.
Regardless, shutting out popular Chinese EVs from the US market means that, in the face of economic downturns, US consumers seeking affordable, quality EVs won’t have access to them. This will only accelerate the decline in vitality in the US EV market—a decision that doesn’t appear to be in the best interest of the country’s automotive industry.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/2965424211415040">article</a> was written by Zhai Fangxue for 36Kr.

Why the US struggles with EVs, and it may be their own doing

Electric Vehicles

23 years ago, Du Zhongbing made a promise to a friend that he never expected to define his life: to open a hotpot restaurant. Back then, he was busy making a fortune in crude iron and coke trading. Three years in, Du became his own boss, and the money flowed. By his calculations, he’d made enough to last a lifetime. But days filled with baths and mahjong left him uneasy, restless.
The decision to open a hotpot restaurant stemmed from a casual challenge over dinner. One evening, while eating hotpot, Du was astonished to find the vegetables still had mud on them, yet a long line stretched out the door. “These places should be out of business,” he thought. “One day, I’ll open my own hotpot restaurant.”
Although Du grew up not knowing much about hotpot, he took the plunge with serious intent. He moved to Chongqing, bought a house, and spent months there researching the history and culture of hotpot. When he opened his first three restaurants, Du was his own delivery driver, working himself to the bone every day. To improve his management skills, he even enrolled in an executive MBA program at Tsinghua University, balancing classes with running his budding business.
Hotpot is the crown jewel of Chinese cuisine, with a market value nearing RMB 1 trillion (USD 140 billion). But it’s also a brutal industry known for its high failure rates. A recent report by Tomato Capital revealed that, while there are 513,000 hotpot restaurants operating, the ratio of new openings to closures is almost 1:1, and only 58% of new restaurants survive their first year. Behind the booming opportunities lies a harsh reality.
Banu, the brand Du founded, is one of the rare survivors that has thrived in this environment. After expanding out of Henan in 2018 and entering first-tier cities, Banu has now opened stores in over 30 cities, including Beijing, Shanghai, and Shenzhen. Banu’s approach is more upscale than its better-known competitor Haidilao—Banu’s average per-person spend in Beijing is RMB 150 (USD 21), compared to Haidilao’s average of RMB 97.4 (USD 13.6).
Banu specializes in Sichuan- and Chongqing-style hotpot, the largest segment. According to Hongcan Big Data, Sichuan- and Chongqing-style hotpot accounts for nearly 40% of all hotpot restaurants, but those charging over RMB 150 per customer make up less than 4% of the market. Across the entire hotpot category, brands with more than 100 stores represent less than 0.5%.
While Banu’s store count is modest—about 140 locations, just 10% of Haidilao’s total—its approach stands out. Banu operates all its stores directly and has continued to expand, even amid a market downturn. The company opened 12 new locations in the first half of 2024, close to meeting its annual target. Meanwhile, other high-end chains struggled: CouCou, under Xiabu Xiabu, closed 23 stores in the first half of 2024, with sales down nearly 30% year-on-year. Haidilao also closed 43 stores in the same period.
Banu’s steady pace of expansion is a key part of its identity. “We didn’t grow like a balloon in the past, and we don’t need to artificially slow down now,” Du said. Except during the pandemic, Banu has maintained a consistent 20% annual growth rate.
<figure id="attachment_150410" aria-describedby="caption-attachment-150410" style="width: 540px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" class="wp-image-150410" src="https://console.kr-asia.com/wp-content/uploads/2024/10/Banu-Du-Zhongbing-1024x683.jpg" alt="Photo of Du Zhongbing, founder of Banu." width="540" height="360" srcset="https://console.kr-asia.com/wp-content/uploads/2024/10/Banu-Du-Zhongbing-1024x683.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2024/10/Banu-Du-Zhongbing-300x200.jpg 300w, https://console.kr-asia.com/wp-content/uploads/2024/10/Banu-Du-Zhongbing-768x512.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2024/10/Banu-Du-Zhongbing-1536x1024.jpg 1536w, https://console.kr-asia.com/wp-content/uploads/2024/10/Banu-Du-Zhongbing.jpg 1920w" sizes="(max-width: 540px) 100vw, 540px" /><figcaption id="caption-attachment-150410" class="wp-caption-text">Photo of Du Zhongbing, founder of Banu. Photo and header photo source: 36Kr.</figcaption></figure>
Du follows what he calls the “three-flip rule,” meaning a restaurant must turn its tables over three times a day to generate an 8–10% profit margin. If it fails to meet that standard, it will struggle to break even. Du’s belief is that, when a hotpot restaurant with a per-person spend of RMB 200 (USD 28) only manages two table flips, it ends up cutting corners on ingredients to scrape by, which is unsustainable.
In 2023, Du faced a significant setback. His son launched a self-service hotpot venture, Mega Land, which soon found itself embroiled in a scandal after lamb was discovered to contain duck meat. Du swiftly stepped in, personally compensating customers with RMB 8.354 million (USD 1.2 million). This crisis led to a heartfelt discussion between father and son at a temple, after which his son joined Banu as a product manager. For Du, product development is a demanding but essential path to building a lasting brand.
An avid adventurer, Du practiced martial arts in his youth and took up hiking later in life. More recently, he’s developed a passion for paragliding, despite injuring his foot in the process. He’s particularly drawn to the sensation of descending and has found parallels between paragliding and running a business: the parachute represents the company, the lines symbolize team members, and the weather reflects the external environment. Managing these elements too tightly or loosely can lead to consequences.
One of the most valuable lessons Du learned from paragliding is that the hardest part isn’t taking off, but resisting the urge to fly when conditions aren’t right. “At one point, I really wanted to open more stores, but I had to hold back, calm myself, and just sit there cracking sunflower seeds, picking at my nails, waiting,” he told 36Kr. Today, Du has handed over the roles of general manager and product manager to others, focusing on being a mentor and advisor.
With the trend of restaurant brands going global, Du has been traveling the world, exploring Banu’s potential for international expansion. But he’s in no rush to take the leap. Entrepreneurship has taught him patience and calm—qualities at odds with his naturally fiery personality. “Even if I live to 90, I’ll always be at 90 degrees Celsius, ready to boil at any moment.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/2971887308837128">article</a> was written by Yang Yafei for 36Kr.

This hotpot mogul’s business is booming, and he isn’t following Haidilao’s playbook

Domestic consumption in Japan is showing signs of recovering from the effects of inflation, according to quarterly economic data released on October 1, though the persistent shortage of workers remains a downside risk.
In the September edition of the Bank of Japan's <a href="https://asia.nikkei.com/Economy/Japan-business-mood-stays-flat-from-the-previous-quarter-BOJ-Tankan">Tankan survey of business sentiment</a>, the category for accommodations, eating and drinking services had a diffusion index of 52, matching the record high reached in March. The diffusion index in the retail sector climbed 9 points from the June survey to 28.
Among individual retailers, Daimaru Matsuzakaya Department Stores saw same-store sales rise 5.4% on the year in preliminary September figures. Supermarket chain Inageya enjoyed a 3.7% gain in same-store sales that month, and customer traffic grew by 3.7%.
"Sales of corn, bell peppers and other vegetables have been particularly strong," an Inageya representative said.
At the Prince Hotel chain, sales in the accommodations segment jumped by roughly 20% on the year during the six months ended September. The occupancy rate rose 5 points.
Fueling these numbers was inbound demand by visitors from Western countries, Australia, mainland China, and Taiwan. These guests mainly stayed in Prince Hotels located in Tokyo.
Spending by international travelers coming to Japan, along with higher pay among Japanese residents, has propped up domestic consumption. Real wages grew on the year for two months in a row in June and July, and the BOJ's consumption activity index increased for two consecutive months on a month-to-month basis.
At the Uniqlo casual wear chain, same-store sales in Japan were up about 6% on the year in August to mark an eighth straight month of growth. This figure includes online sales.
"The movement of essential goods is strong, and customers are also increasing purchases of additional items when they visit stores seeking new products," a Uniqlo representative said.
A larger number of businesses are passing higher costs to retail prices. There are 2,911 products that will receive price hikes in October, according to Teikoku Databank, exceeding the April figure.
This is "the biggest rush in price hikes this year," Teikoku Databank said.
Overall, companies predict a 2.3% gain in sales for fiscal 2024, according to the September edition of the Tankan—up 0.5 point from the June survey. They see pretax profit falling by 5.7%, but this is a 2-point improvement from June.
The biggest challenge is the shortage of workers. In the new Tankan, the percentage of large manufacturers reporting "insufficient employment" surpasses those reporting "excessive employment" by 19 points. The metric worsened by 1 point since the June survey.
Among large nonmanufacturers, "insufficient employment" exceeds "excessive employment" by 39 points, which is unchanged from the June survey. This shows that Japan is experiencing the worst labor shortage since 1991.
The Miyako Hotel Kyoto Hachijo reports being roughly 20% understaffed, even though occupancy rates and per-room spending both rose about 10% on the year in September. The Kyoto hotel covers gaps in housekeeping and restaurant staffing by temporarily reassigning people from other posts.
The labor crunch is holding back businesses that are eager to grow. Large manufacturers had planned to increase capital spending by 20% in fiscal 2023, according to the September 2023 Tankan survey, but later reported an actual increase of only about 11%. A new Marriott International luxury hotel in the tourist city of Tottori has repeatedly pushed back its opening date over a lack of workers and higher materials costs.
"It's too early to say that individual consumption is on the rise," said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities. "The strong performance of lodging services is due largely to the effect of inbound demand."
Japanese businesses large and small are set to continue sweetening compensation packages to resolve worker shortages. Suntory Holdings president Takeshi Niinami has said the group intends to offer a 7% pay raise for 2025, in line with the 2024 raise.
This article first appeared on <a tabindex="0" href="https://asia.nikkei.com/Economy/Japan-s-domestic-spending-propped-up-by-wages-and-tourism" rel="noopener noreferrer" data-token-index="1">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing <a tabindex="0" href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/" rel="noopener noreferrer" data-token-index="3">partnership with Nikkei</a>.

Japan's domestic spending propped up by wages and tourism