On October 28, the ‘self-heating’ instant hotpot brand Zihaiquo, announced it has secured more than 50 million US dollars in Series C financing, with a valuation of 500 million US dollars. The previous shareholder Matrix China continued to provide funding, supplemented with funding from the CICC. With this latest round of funding, the brand will be able to further continue internal product development and innovations.
In the beginning of 2020, Matrix China exclusively invested towards Zihaiguo’s B round of financing, continuing it for another round. Wang Huadong, a partner of Matrix China, said: “After obtaining Matrix’s investment, ZIHAIQUO has consolidated the foundation of offline business and strengthened the construction of the upstream supply chain. We believe that this will bring out even more potential for ZIHAIQUO, continuing to disrupt the market with innovative products and drawing more interest from consumers.”
The brand aims to expand into more types of convenience food alongside their renowned “self-heating” instant hotpots: such as clay pot rice, bentos, vermicelli, noodles, and more. The product range aims to incorporate all kinds of techniques, such as brewing, boiling, and other instant cooking processes, to deliver traditional Chinese foods in instant ready-to-eat form.
At the recent Chinese Food Show, the brand showcased a new sub-brand of noodle cooking series that will be added to their product line -“Picture”, cold soba-style noodles. The new product debuted to great excitement by the market and consumers.
From the source, the “Picture” series of products selects high-quality wheat flour from the Hetao Plain; a farmland with sunshine at 40 degrees north latitude, pollutant-free land, and irrigation using water sourced from the Yellow River. It is high in gluten and nutritious, with the production process is similar to existing procedures that mass produce existing ramen products.
The brand aims to apply modern technology to preserve the traditional recipe for the noodles: using a fully automatic closed mixer to evenly distribute salt and water in the production process, along with the mixing & kneading processes. The temperature and humidity of the environment is controlled through each production process, such as hair, pressing, drying, etc., ensuring the gluten value remains saturated; so that the texture of the noodles is elastic, resistant to boiling, and not sticky. Through this approach, the brand aims to reshape public perceptions towards instant food products: demonstrating they can be nutritious and delicious as if they were made from scratch.
Compared to existing instant noodle products on the market, the “Picture” series from Zihaiquo offer an innovative way for instant food products to be cooked and produced, through the process of ‘cold water cooking’. The cold water cooking of noodles not only, is a way for Zihaiquo to stand out from competing brands, but also allows the product to be made more convenient for consumers: making the noodles more delicious, satisfying even more consumers, and spurring competition within the Chinese instant noodle market.
Currently, the daily production capacity of Zihaiquo “Picture” series products can reach up to 90 tons. With the injection of this round of financing, production capacity and SKU will also be further improved, which will help the Zihaiquo brand to continue leading innovations within the convenience food industry.
Product strength [differentiation] is the key to competition, and high standards allow it to thrive.
It only took 10 months for the Zihaiquo brand to secure its initial funding of 500 million U.S. dollars. According to industry insiders, the high recognition of the Zihaiquo brand is due to their continuous innovations in product research and development.
Examples include the use of FD Aerospace freeze-drying technology to preserve foods, being the first to use aluminum foil lunch boxes, cemented the brand’s Their instant hotpots have established a clear position in product differentiation, allowing them to stand out among the saturated market of Chinese self-heating convenience food companies.
As the leading brand in the self-heating convenience food industry, Zihaiquo has always set high standards for their products. Being the first to pioneer the ‘self-heating’ products, the brand has even participated in the drafting of the “Self-heating Convenience Food” and the “Food Heating Pack” product regulations/standards set by the Government.
Throughout the past four years, the brand has achieved numerous milestones:
In 2017, Zihaiquo completed their first year of product research, focusing on product development and refining the innovative production techniques they use to this day.
In 2018, Zihaiquo launched their self-heating hot pot series into the market, to mass popularity. The sales of the product exceeded 100 million yuan in the first three quarters of its release.
In 2019, Zihaiquo announced more innovative products, expanding into new products such as self-heating clay pot rice bowls.
In 2020, in addition to improving on their hot-pot series, the brand has begun construction of a factory run by artificial intelligence. Production and pre-cooking Ingredients such as rice, flour, and vegetables using A.I technologies will be developed and applied to their production lines, to further improve production efficiency.
“The four years of product development have achieved the scale and status of Zihaiquo today. In the future, Zihaiquo will continue to focus on the deep cultivation of product capabilities, further improve production technology, innovation capabilities and iteration speed, and help build the core barriers of the brand. Said Cai Hongliang, founder, chairman and chief product officer of the Zihaquo brand.