Note From Shlomo: Glad to publish interview #4 on Dim Sum project led by Kevin. We’ve got more and more people interested in learning more about different industries and how they work, bringing in great interviews to Startup Noodle. Thank you guys and keep learning!
If you want to join in the project, email directly to Kevin!
Thanks to Tom Wicksteed for conducting the interview!
What first brought you here to China, Adlyn?
So long ago! I’ve been here 9 years now. I came here in December 2004 to sign up for a Mandarin course. Before that I was living in the States. I’m originally from Malaysia and moved to the States to study and then started working after I graduated but I could see my future living the suburban American life with two and half dogs and three children and I thought no! [laughs]
So what was the initial inspiration behind Hias?
In terms of the idea: you do it, I think every foreigner living in China does it – you have family or friends visiting and you end up playing tour guide. But you’re really just a food tour guide for the most part. Straight after the sites you’re talking about what you’re going to have for dinner! So the idea came out of that.
I did more research and found a whole industry called culinary tourism that I’d never even heard of before. And I thought oh my god the mother of all Asian cuisines, Chinese food, doesn’t have anything on tours, there was no culinary tourism. It didn’t exist. So that’s when I thought I’d try and set something up.
Did you have a background in cooking? Was it a hobby?
No I didn’t cook, I just ate [laughs]!
Well that’s half of the game isn’t it!
I know! I used to eat out a lot so I knew the food scene really well in Beijing. Cooking though came much later. My clients started asking me if I cooked and I had to admit I didn’t. It was a bit embarrassing. So I decided I needed to learn how to cook properly so I could understand more about food.
So what did Hias Gourmet look like in the beginning? Was it just you on your own doing small tours and then it grew organically from there?
It was very interesting because you start off with a business idea but then it often doesn’t transpire. My original idea was to have high-end culinary tours in China. But it just didn’t work out. No one bought the tours they just didn’t sell.
[pullquote]Creativity and ideas come from anybody regardless whether they’re foreign or Chinese.[/pullquote]
So I thought, we really need to make the purchasing experience much easier and make it less of a commitment for clients. So instead of selling expensive items, expensive services, expensive products, I moved to cheaper, simpler, more manageable tours. I set up short two to three hour tours instead and it worked.
I still try and sell the one-week expensive tours but they still don’t sell. I don’t think China’s ready for it yet.
In essence, tourists that come to China still want to see the big sights. It’s still seen as a once-in-a-lifetime destination so they don’t have a week they want to dedicate just to food. They still want to see the Great Wall, the Forbidden City, the Yangtze River. So the way I decided to fit in was to set my tours at convenient times, at the end of the day after people had done their sight seeing and more likely to want to go on a food tour. We also made it very cheap and they only need to commit two or three hours. So it was these products that really got the ball rolling.
How do you market yourself in the increasingly busy Chinese tourist market? Is it word of mouth or do you have an aggressive marketing plan?
No real marketing plan except focusing on growing our web presence and making us as easily searchable as possible. We don’t get so many accidental clients who come across our website and decide to buy a product. They’re mostly actively looking for a food related experience.
We don’t get the passive clients because I think food in China still doesn’t sound very appealing to many people. In fact out of most things it’s one of the things people are most worried about when they travel here. They think Chinese people still all eat dogs and cats. So there are a lot of stereotypes. You’ve got places like Paris or Tuscany or even Bangkok which are so much more appealing than Beijing, which I understand and is fine!
[pullquote]I don’t think language is ever a hindrance. Some of the best foreign entrepreneurs in China or even Chinese entrepreneurs don’t speak other languages.[/pullquote]
So we’ve got to fight again those food and cultural stereotypes. We’re not necessarily going to change the world’s opinion but maybe slowly we can challenge people’s stereotypes.
One thing that makes it a lot easier is that the food out here is so good. So when people come here it’s very easy to impress.
I agree. When my friends come here they all want to go to the Wangfujing Night Market and see the scorpion and tarantulas. But there’s so much more than that.
So how has culinary tourism grown in China and how do you position yourself against the competition in Beijing such as The Hutong Kitchen, Black Sesame Kitchen and The Hutong Cuisine?
The Hutong Cuisine is so good! They do cooking classes and private dinners. I don’t get into cooking classes at all – I work with the Hutong Cuisine and I send my clients their way. It’s a Chinese business and I’m also a big feminist so I try and support her (the founder Chunyi Zhou). In my opinion she’s the best culinary instructor for tourists and expats in Beijing. So I work with the Hutong Cuisine and don’t try and get into that side of things.
Can I go back to the beginning? Many people come out to China with the idea of becoming entrepreneurs and don’t always know where to start. They have an idea but they see a daunting wall of bureaucracy, language barriers and a government system that can shut you down in the blink of an eye. So what was the first concrete step you took to start on your entrepreneurial journey?
Yeah there’s a lot of red tape. I remember talking to my Dad about starting this idea and he said whatever you do make sure you keep it legal. So that really set the stage for how to proceed. So I incorporated in Beijing and Hong Kong.
As a WFOE (wholly foreign owned enterprise)?
Yeah as a WFOE.
Back in England it costs less that 1,000RMB to set up a company but out here the restrictions and minimal capital for a WFOE seem to be ever increasing which can be a barrier to entry for those who want to start small.
Yeah the barrier to entry for a foreigner is pretty high here. And I understand, [the Chinese Government] want to have a high barrier to entry for small foreign businesses and I can see why they are very strict about that. They want to encourage more home grown businesses or those who bring technology and ideas that have more concrete benefits to them, rather than all these noisy little foreign businesses like myself set up!
Do you think that China’s need for Western entrepreneurs has decreased over the years? Do you think that ten, twenty years ago they wanted Westerners to come over and bring their ideas, creativity and methodology but now home grown entrepreneurs already have these skills?
I think entrepreneurs will be entrepreneurs and they come in all different shapes so creativity and ideas come from anybody, regardless whether they’re foreign or Chinese.
As well as cost of setting up a business out here, did you find that language was another major barrier to entry?
I started from zero. I was mute for the first four to five months and then suddenly I started speaking [laughs]!
When you set up Hias what sort of level where you at?
I still wasn’t very good. When I first set up Hias I couldn’t use purely Chinese companies or banks to help me set up the business. They needed to have bilingual services. I’m much more confident now and in fact have just made the big leap from banking with HSBC to ICBC.
And do you now mostly speak Chinese on a day-to-day basis?
I guess with my guides, yeah, Chinese. Still quite rough though but enough to get by and make my opinions understood. I don’t think language is ever a hindrance. Some of the best foreign entrepreneurs in China or even Chinese entrepreneurs don’t speak other languages.
[pullquote]You have to build the company hand to hand. I think you can’t wait until you have guanxi otherwise you’ll never start.[/pullquote]
So it’s a barrier that can be dealt with?
Yeah people find their way.
And one the other big cultural difference that’s often talked about is ‘guanxi’ (network relationships). How important do you think it is to both starting a business and growing it?
I think guanxi definitely helps in business. It’s very hard without. Even today we can’t work with the Culinary Association of China because we don’t have common guanxi network. So it’s very hard but it hasn’t stopped us getting to where we’ve got to.
Networking is useful in the West but it seems to be in the blood of Chinese. They take it to a new level.
Yeah I mean even on a grassroots level, when building relationships with restaurants for instance, it’s so important. Everything is based on trust out here. You don’t trust anyone outside your circle of family and friends. So we can’t just go to a restaurant and say we want to work with them. We have to go and eat at the restaurant for maybe a year and then maybe they’ll talk to us.
Did you have to build up guanxi before you started the business or was the guanxi more useful when trying to grow and develop?
The difficulty with our product is that we sell to travellers coming in to China. They’re not going to buy from a Chinese company so you need credibility and that was one thing we lacked at the beginning. We were very lucky when we first started out we were contacted by Discovery Channel China who were doing a feature on bizarre foods in China so we got a bit of credibility and we grew from that.
[pullquote]It’s probably the hardest thing for people who want to start a business to do, make that decisive jump to just go in there and do it. I thought I’d just go in there and learn along the way![/pullquote]
But you have to build the company hand to hand. I think you can’t wait until you have guanxi otherwise you’ll never start. It’s probably the hardest thing for people who want to start a business to do, make that decisive jump to just go in there and do it. I thought I’d just go in there and learn along the way!
It’s what so many people say, once you’ve made the leap to start your business you’re already ahead of 50% of the rest.
I guess it’s very scary right? There’s a lot of risk involved and it’s also scary on a personal side because it makes you be very honest with yourself. You have to face your own devils. But it’s ok, don’t take life to seriously.
I said to myself I’d start a business that doesn’t need big start up costs. It’s a service business so essentially there are no big costs. But I didn’t want to have money tied to big inventory, expensive equipment or very expensive talent. So that was the decision that I made. But at the same time what that means is that my business model isn’t particularly scalable, so it will remain perhaps quite small. I think that’s the trade off though.
Having said that, you have a growing number of partner companies around China. Are they franchises or just working relationships?
They have different models. For some we create the product and tell the how we want them to run it for us. For others it’s just on a commission basis.
So are you working on a big five-year growth strategy or just building up partnerships as they seem appropriate?
Initially it was just see how it goes but then it starts getting a bit serious [as the business grows]. To be honest, this is just a vehicle to generate profit so that I can really help little businesses along the way and support the Jolkona Foundation. And it’s also an excuse to do more research into Chinese culture. It’s really just a vehicle for me to follow my personal interests.
So was that always an intention from the start or something that evolved?
That evolved. I thought, OK we’re making money, what can we do with it? Then I got more serious about food. I changed from just saying a dish was ‘hen hao chi’ (very tasty), to really wanting to learn about the history of Chinese food and really work on recording what traditional food cultures and production methods remain today. I want to put a spot light on what’s still out there so people will remember.
I was impressed by the level of genuine social responsibility that you maintain.
When you spend so much of your energy on the business you might as well make it meaningful. I think that’s really is lacking in China, social responsibility and how you can give back. I think in life it’s not just about self, work, or family, it’s also about community. I think that’s currently missing here.
So you think corporate social responsibility is lacking in China?
It’s so often superficial. Companies do it to say they’ve done it.
[pullquote]Every day you make mistakes. Decision-making is pretty tough because you’re working with so many unknowns in China.[/pullquote]
In Hias it’s taken into account throughout the supply chain and beyond. Are you an exception in thinking that CSR can really be an integral part of a business?
I think in Beijing or in China it’s very easy to work with people who really need your help. And not just out of pity but to enable them. It’s so easy – there are so many opportunities.
Is there an argument that, since setting up a business is hard enough as it is, therefore social responsibility is understandably not at the top of every entrepreneur’s priority list?
I really think it comes down to the values of the people who are running the company. You can’t always instill values so it has to be something you really believe in and drives you.
When you first started out you were very much a business entrepreneur but you seem to be morphing into a social entrepreneur. Which do you see yourself as now?
Definitely not as a business any more, because I never think of profit as a priority. I do still think about how to create a great product for our clients so that they have a great time in China. I also think about how we can support the community around us, that’s very important as well. The partnerships are also important. I think them through a lot before partnering with people.
[pullquote]When you spend so much of your energy on the business you might as well make it meaningful. I think that’s really is lacking in China, social responsibility and how you can give back.[/pullquote]
The thing you mention about the night market is quite funny. We have a product called the Night Market, which is one of our best selling products. I remember when I first came to Beijing, like you, I would avoid the night market like the plague. I remember I would take people there, not as a product, we didn’t sell the Night Market at the time, but gourmet chefs and foodies would all love it there! I thought, how could you? This is so not the best of what Beijing has to offer!
But I realized that people loved it and I tried to work out what it was they loved about it, which I guess was the sheer variety and the atmosphere. So we decided to make the tour as human as possible, make it fun and try to find the really good vendors and make a great product out of it. The first thing we see on the tour is that it’s a crazy market with two types of food sold: food that Chinese people really eat and food that’s for your camera only. If we go in with that mindset then people get it.
It’s a very important tour for us because it addresses all the Chinese food stereotypes that exist. Scorpion on a stick? No one eats that! It is used for traditional Chinese medicine but not for food. If you want a photo with it or to eat it, no problem, we’ll tell you how to eat it, we’ll even tell you the best vendor for scorpions. So from thinking it was a terrible place, we were able to turn it around and make it a much more of a fun, informed guided tour of the market.
I always say it’s so touristy but find it amazing when I go there that the Chinese still vastly outnumber the Westerners.
They do eat there and it’s the Chinese who are not from Beijing who go there. But if you look at what the Chinese people eat at the market, it’s often the Beijing snacks like the baodu (fried beef tripe), lamb tripe or pork intestines. But the market really sells foods from all around China.
For the Chinese tourism market, a lot of Chinese tours for many who are not very well off, if they make a trip once in a lifetime it will be to Beijing to see the capital, to see Tiananmen, Forbidden City. But also if this is their only chance to get away from their homes then they want to try as many foods a possible from all around China so they go to the night market. They too know it’s not the best but you get a good idea of the different food styles.
So many cultures have food at the center of the culture but China seems to take it to another level. Even business meetings are held in restaurants and deals are only done after a meal. Any idea why it’s so important?
I’m married to a Chinese person and oh my god, everything is done over the dinner table. I think it’s a bit more regional. Whenever I do any business with people from Beijing, it’s always over some food. I think it’s because when you dine with someone it means you trust them so business deals are always done after a meal.
[pullquote]It’s a service business so essentially there are no big costs…But at the same time what that means is that my business model isn’t particularly scalable, so it will remain perhaps quite small. I think that’s the trade off though.[/pullquote]
And some baijiu (Chinese spirit)?!
If necessary! For me I’m a lady so it doesn’t matter too much!
I think it comes down to the fact you let your guard down and are able to build up a relationship. You never really eat with strangers in China.
I’ve got a few final questions. The first one is whether you’re optimistic about the future of China and specifically for entrepreneurs? Will it still be the land of opportunity?
And do you think the change of government last year was good for entrepreneurs?
I’m such a small business it doesn’t really matter. I think the opportunities are still here but it depends on which industry you’re trying to get into and that’s when policies really matter. To us this doesn’t really matter but if you’re in a specific industry like agriculture or healthcare then it really does.
But tourism is ok?
Yeah, it’s a very soft industry, it’s not too much of a threat.
Do you have any regrets that you’d do differently if you could start up Hias again?
So many! Every day you make mistakes. Decision-making is pretty tough because you’re working with so many unknowns in China. I’ve only worked in an American company and I know how Americans do business and I assumed this was the best way. But it’s different here especially the way you manage employees out here.
Have you tried to change your Chinese employees to embrace a more western mindset or have you changed to adapt to the Chinese business culture?
I think both are necessary. It’s never one or the other but really about understanding what drives them. Then seriously taking that in to account when you manage them. Loyalty is very important especially here. If you do what’s best for them, they will work hard for you.
You may have already answered this but if you have one tip or recommendation for entrepreneurs out here in China, what would it be?
I think keep it legal. Doing things legally out here is important. If you want to be a small business then fine but if you eventually want to grow or have important organizations work with you then it will matter that you’re set up properly. Don’t let it bite you in the back later on.
Also, make sure you understand the subtleties and nuances of working in China.
I’m still learning! Just observe. We all think we’re not biased but you do need to understand the way you think and why they Chinese don’t think in the same way.
And finally trust. Don’t just rely on legal backing. When it finally comes down to business, you may have a signed contract but until the money finally comes in I don’t even consider that a done deal.
[pullquote]When you dine with someone it means you trust them so business deals are always done after a meal…you let your guard down and are able to build up a relationship [over Baijiu].[/pullquote]
Oh it’s terrible! Until you’re friends with that person and have the trust, then you can relax a bit more. So it’s important to have both. The legal contracts need to be backed up by trust.
I hear that you judged the 2013 Time Out Food Awards? So my final question is, it you had to leave Beijing tomorrow, where would you have your final meal tonight?
There are so many great restaurants out here. I’d have to do a restaurant crawl. I’d have hotpot for sure then some chao cai (stir fry), gong bao ji ding (sweet & spicy chicken) and dumplings.
A culinary binge!
Yeah just overload! I was vegetarian for a year before I started the business and I remember at the end of my year I went to a Brazilian BBQ and ate so much meat I was ill.
Now I eat meat [laughs], I don’t want to miss out!