---
title: "Giants Enter, Small Bistros 'Fragrant'"
description: "Small bistros are waiting for spring, poised for growth. In 2021, leading small bistro brand Helens listed on the Hong Kong Stock Exchange, sparking investment fever. However, the heat has since cooled, but the industry continues to evolve quietly, with new entrants and funding rounds in 2022. This article explores the logic, market size, and competitive landscape of the small bistro industry."
author: "康治强"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2023-01-30"
language: "en"
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# Giants Enter, Small Bistros 'Fragrant'

> Small bistros are waiting for spring, poised for growth. In 2021, leading small bistro brand Helens listed on the Hong Kong Stock Exchange, sparking investment fever. However, the heat has since cooled, but the industry continues to evolve quietly, with new entrants and funding rounds in 2022. This article explores the logic, market size, and competitive landscape of the small bistro industry.

**Introduction: Small bistros are waiting for spring, poised for growth.**
In 2021, Helens, a leading small bistro brand, listed on the Hong Kong Stock Exchange, drawing market attention and triggering an investment boom in the sector. That same year, multiple small bistro brands received funding, with amounts ranging from tens of millions to hundreds of millions of yuan. The trend also crossed industries, with Nayuki Tea and Haidilao entering the small bistro space. Over time, the 'small bistro craze' of 2021 has faded. A search for small bistros online shows most analysis articles date back to 2021. The market no longer seems sensitive to small bistros, and media attention has shifted to other hot tracks. While small bistros may have faded from the spotlight, industry changes often happen quietly. In January 2022, the chain restaurant-bar brand COMMUNE completed a Series A+ funding round of hundreds of millions of yuan. According to the Wine Research Institute, in the first half of 2022, there were 13 financing events for new alcoholic beverages, with craft beer accounting for 7, or 54%. At the end of December 2022, media quietly reported that China Resources Snow would launch a线下 small bistro called 'JOY BREW', following Qingdao Beer and Yanjing Beer's entry. Clearly, small bistros are just returning to market normalcy. In the first year after pandemic policy relaxation, this article attempts to answer some basic questions: What is the logic behind small bistros? What is the market size? And what is the competitive landscape? To glimpse the basic face of the small bistro industry.

**Why are brands entering the small bistro market?**
The night economy is boosting a hundred-billion-yuan market. Capital is entering small bistros thanks to the huge market size and industry prospects. Data shows that total revenue in China's small bistro industry grew from approximately 84.4 billion yuan in 2015 to 117.9 billion yuan in 2019, with a compound annual growth rate of 8.7%, and is expected to reach 183.9 billion yuan by 2025. In terms of volume, reaching over 200 billion yuan is only a matter of time. Small bistros operate mainly at night, serving alcoholic drinks and snacks as nighttime entertainment venues. Therefore, the night economy has become the biggest driver of the small bistro industry. Nighttime consumption accounts for 60% of total retail sales, with bars accounting for 19%, second only to dining at 22%. The scale of the night economy grew from 26 trillion yuan in 2019 to over 30 trillion yuan in 2022, and will continue to grow. Most critically, the number of small bistro openings in China is far from saturation. According to a report by East Asia Qianhai Securities, the industry's opening space is 216,500 stores, with an expected CAGR of 7.55% over 25 years, reaching saturation by 2047. Meanwhile, in 2020, only 5% of small bistro companies had three or more stores, and the CR5 was only 2.2%, with the largest, Helens, accounting for just 1.1%. In comparison, the CR5 for tea and coffee industries exceeded 50% in the same period, indicating room for increased concentration in the small bistro industry. The industry's scale and low concentration have attracted various brands to enter.

**Which model can succeed as major brands enter?**
The future development space of small bistros has attracted cross-industry players, most notably the multiple financing events for small bistro brands in 2021. Data shows that in 2021, besides Helens' IPO, financing events for small bistros occurred almost throughout the year. For example, in August, Cat Waiter Beer House received a Series A round of 100 million yuan from Shenzhen Guozhong Venture Capital; in August and September alone, there were five financing events. △Cat Waiter store. Specifically, this article will introduce representative players by different models. Currently, there are three main models for small bistros.

First, the pure bar model, where alcohol is the focus, snacks are supplementary, and ambiance is emphasized. This model suits casual drinking and chatting with friends. Representative companies include Helens, Perry's, and Haiwuli. This is the mainstream model in the market. Taking Helens as an example, its revenue grew from 115 million yuan in 2018 to 1.836 billion yuan, showing rapid growth. Although it lost 99.9 million yuan in 2022, the loss was mainly due to the pandemic. In terms of scale, as of June 30, 2022, Helens had 846 stores across 167 cities nationwide. Currently, excluding the 2022 pandemic impact, Helens has performed well in revenue, achieved scale replication, and will continue to expand.

Second, the 'dining + alcohol' model, which focuses on meals during the day and alcohol at night. This model extends operating hours, meets consumer needs all day, and helps increase revenue. Representative brands include Hutaoli Music Bar, Erma Bar, and COMMUNE. The Hutaoli model targets mid-to-high-end consumers with higher average spending. The compound restaurant model weakens social attributes, focusing more on dining atmosphere and food quality. However, due to the large single-store model of over 500 square meters, it is difficult to replicate on a large scale due to cost constraints. The largest, Hutaoli, has 470 stores. Although the large single-store model is hard to scale, it performs well in profitability. Data shows that in 2021, Hutaoli's daily revenue per store was 60,000 yuan, compared to Helens' 9,229 yuan. The high daily revenue is due to two factors: first, the average ticket is over 120 yuan, while Helens is 70-80 yuan; second, Hutaoli operates all day, covering both day and night.

Third, the cross-industry model, mainly from catering and tea drinks, where alcohol is supplementary. The main purpose of these players is to find new growth curves. Current players include Nayuki's Nayuki Wine House, Hefu Noodles' Xiaomian Xiaojiu, Yunnan Cuisine's Yunnan Cuisine Erting Bistro, and Haidilao's Hi Lao Bistro. △Source: Canbaodian. Revenue in this model mainly comes from the main business, and performance in the small bistro track is weaker than the other two models. According to media reports, Hefu Noodles' Xiaomian Xiaojiu opened in Shanghai in 2021 has closed, with some stores converted to regular stores, and all stores in other cities like Fuzhou and Shantou have closed. Yunnan Cuisine also returned to Yunnan cuisine shortly after entering the bistro space. Other players like Haidilao and Nayuki have not made a splash. The cross-industry model does not focus on alcohol, simply replicates the model, lacks innovation, and is essentially still a restaurant. To gain a share of the small bistro market, they need to adjust their business model.

In summary, small bistros are still in a golden period. The introduction of various models and the entry of many players have intensified competition. Who will win in the small bistro industry still needs to answer one question: the logic of small bistros.

**The logic of small bistros**
With the market reaching hundreds of billions and the rapid development of the night economy, small bistros are accelerating. But why do various industries flock to this sector? Market size and night economy alone may not explain it; there are deeper reasons: alcohol addiction driving repeat purchases and the strong need for social interaction in modern society. Of course, socializing is not a new concept for bars, but only Helens has made socializing the core scenario and achieved scale. Other brands have weakened the social attribute to varying degrees. Below, we will break down the core logic of small bistros.

**Social needs:** Small bistros ostensibly sell alcohol, but in essence, they are social platforms. The slight intoxication after drinking allows young people to release emotions and stress, and they are willing to confide in friends. According to NCBD's '2021 China Small Bistro Industry Development Research Report', the top three consumption purposes for Gen Z small bistro consumers are socializing, entertainment, and gathering. Socializing is the biggest consumption motive. Previous nighttime venues like KTV also had social attributes, but singing was the main purpose. Small bistros focus on drinking itself, creating the most suitable social atmosphere through music and environment. For example, Helens' average consumption time is 3.5 hours, giving consumers a long social experience. East Asia Qianhai Securities data shows that small bistros have better social time, efficiency, and utility than board games or KTV. Taking Helens as an example, its main consumers are students and young people just entering the workforce, who have ample time but limited spending power, and have natural social needs when entering stores. According to Helens' official account comments, words like 'girlfriend', 'bro', 'finding love', 'peach blossom', and 'love' are high-frequency, so Helens strategically focuses on an ultra-high cost-performance offline social platform. From its official account comments, the brand actively interacts with consumers, meeting their emotional needs. Therefore, socializing is the core logic of small bistros. No matter how the model innovates, a bar that does not emphasize socializing is unlikely to succeed. This is also a major reason why cross-industry models have not been validated: first, cross-industry players still emphasize food; second, other bars have cultivated consumer loyalty. Combined, cross-industry models need to more accurately understand consumer psychology.
△Source: Helens official website Weibo

**Alcohol addiction:**
Besides social attributes, another factor is alcohol addiction.


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