Jia Guolong, the founder who built Xi Bei into one of China’s best-known restaurant chains, faces a stark reckoning. Xi Bei has confirmed it will shut 102 outlets in the first quarter of 2026, affect roughly 4,000 staff and suffer cumulative losses exceeding RMB 600 million between September 2025 and March 2026. The closures span more than 30 cities, with Shanghai alone accounting for 18 of the affected locations.
The immediate spark has been a months-long public spat with internet personality Luo Yonghao, who accused Xi Bei and other chains of serving pre-made or centrally prepared dishes rather than food cooked fresh in each restaurant. Jia has publicly blamed Luo for damaging Xi Bei’s reputation, posting long defenses after temporary platform bans and insisting the chain’s central-kitchen food does not meet statutory definitions of “pre-made” dishes.
That technical defense misses a larger point: consumers do not adjudicate by regulatory categories. For many diners, a dish that arrives after centralised preparation feels indistinguishable from factory-made food. In an already weakened dining market, perception matters as much as definition, and Jia’s combative responses have hardened public disapproval rather than quelled it.
Wider economic trends are cutting against Xi Bei. In the third quarter of 2025, national per-capita spending on dining fell to RMB 33, down 23.6% from two years earlier. Among 44 major cities tracked, only Beijing maintained per-capita restaurant spending above RMB 100; roughly 80% reported figures under RMB 50. Those numbers reflect a durable softening in domestic consumption that will pressure margins across the sector.
The timing is cruel for a company that had been preparing an IPO in 2026. Founded in 2017, Xi Bei completed three funding rounds and remains majority-controlled by Jia, who owns about 77.6%. The last round closed in January 2025 with Chengdu Xinchao Media as an investor. With high-profile closures, a social-media controversy and growing losses, the path to listing looks increasingly fraught.
This episode is a cautionary tale about the limits of technical rebuttals and the power of digital opinion leaders in China’s consumer sectors. A CEO’s instinct to fight back publicly against a critic can deepen reputational damage when it alienates average customers. Repairing that damage will probably require humility, visible operational changes, and a communications strategy aimed at regaining trust rather than scoring rhetorical points.
Xi Bei’s immediate choices are stark. The company can double down on legal and technical defenses and risk further erosion of customer goodwill, or it can pursue damage control—apologise where appropriate, increase transparency around kitchen processes, and offer concessions to affected customers and staff. Either path will determine whether the current round of closures is an inflection point toward deeper retrenchment or a painful but recoverable correction.
Beyond Xi Bei, the affair signals something broader about China’s consumer economy and corporate governance. Hospitality chains now confront not only weaker demand but also a more volatile reputational environment, where influencers and social platforms can swiftly reshape consumer behaviour. For investors and founders alike, the lesson is plain: managing public perception is integral to operational resilience, and losing that battle can be as costly as any supply‑chain failure.