BEIJING, February 24 (TMTPOST) — Popular Chinese hot pot chain Haidilao (HKG: 6862) was recently called out by netizens on social media for labeling customers.

The labels that Haidilao gives to its customers include appearances, dining demands and even tendency to make complaints. The news report has gone viral on Chinese social media Weibo, attracting thousands of comments.

Netizens’ opinions are divided on social media. While one side of netizens believe it is normal for businesses to create a user profile to better operate their business, the other side thinks that it is still offensive for Haidilao to put labels on its customers, especially labels that involve physical appearances.

Haidilao told 5D Diaocha that managers of Haidilao restaurants can add descriptions of customers’ personal dining needs to its membership system. The feature is designed to improve service for customers, according to Haidilao. Descriptions of customers’ dining needs include dietary needs and beverage preferences.

Haidilao adjusted the customer profile feature in 2020 and has prohibited the staff from putting labels that concern customers’ personal information, such as physical appearance, the company said. The adjustment was already completed in January 2021, according to Haidilao.

New additions of customer information will be strictly assessed, the company said.

Haidilao has been catching the market’s attention recently. The company announced on February 21 that it suffered a net loss of 3.8 billion to 4.5 billion yuan in 2021 (ending December 31, 2021).

In 2021, Haidilao closed around 300 restaurants and saw a decline in revenue, which led to the net loss. The rapid expansion in 2020 and 2021 and internal management issues had negatively impacted the operation of Haidilao, the company said.

Established in 1994, Haidilao is a popular Sichuan hot pot chain in China. It is the largest hot pot chain in China, famous for its exceptional service. The company went public in Hong Kong in September 2018.