Din Tai Fung Closes 14 Restaurants in China

The Taiwanese chain is closing 14 restaurants in China

When I was in Beijing, I was thrilled to see a Din Tai Fung open at a mall called Shin Kong Place, and ate there several times after work. 

So I was surprised to hear the Taiwanese restaurant chain known for its xiaolongbao is closing 14 stores in China, but perhaps it is indicative of the country's weak economy and how the Chinese are looking for cheaper places to eat.

The signature xiaolongbao at Din Tai Fung

On Monday the company's subsidiary, Beijing Hengtai Feng Catering Company announced it will close all of its 14 restaurants in northern China, including one in Xiamen. The brand's parent company in Taipei confirmed its 18 remaining restaurants across eastern China, run by a Shanghai-based partner, will continue operations.

"We deeply apologise for the inconvenience and disappointment this decision may cause our many loyal Din Tai Fung customers," the subsidiary said in a statement on WeChat. The move will affect some 800 employees.

When China finally lifted Covid-19 restrictions, Chinese residents headed out of the country on "revenge travel", and much like Hong Kong, local restaurants lost a lot of business. And now as the property market crisis trickles down, people are more cautious with spending, and that has adversely affected restaurants.

"The current situation in China is that while there is still traffic, the consumption power is weak, including in the restaurant service industry," said Darson Chiu, a Taiwan-based economist and director general of the Confederation of Asia-Pacific Chambers of Commerce and Industry.

At the entrance cooks make dumplings by hand

"A high-end brand like Din Tai Fung may not be able to meet the consumers' needs as they downgrade their consumption in China's current economic environment.

Indeed. Cheng Zhiwu, a professor of finance at the University of Hong Kong, found that some restaurants in Nanjing offered food for a table of 10 guests for 400 yuan (US$56), or 40 yuan per head, down from the previous price of 700 yuan.

Another factor in Din Tai Fung's closures may be because a lot of expats left China, and they made about 20 to 30 percent of the restaurant chain's business. 

It was just so interesting to see a Taiwanese brand become so successful in China despite all the political sabre rattling across the South China Sea. But alas, the slowing economy has forced Din Tai Fung to retreat...