Tag: brand-driven growth

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The journey of Zhang Lan is the tale of an entrepreneur who exemplifies the story of globalization. She has gone from working many part-time jobs while studying overseas, to becoming one of China’s most successful food entrepreneurs.

Starting with a very small and humble restaurant specializing in spicy food from China’s Sichuan province, Zhang has cannily used branding innovation to grow her business and build her reputation in the food trade. Today the company she started, South Beauty Group (southbeauty.com), has 71 restaurants, most in major cities such as Beijing and Shanghai.

A series of bold moves focused on raising the profile of her restaurants and the South Beauty Group has paid off: the group was singled out by the China Hotel Association as one of the top 10 Chinese restaurant brands. By riding the country’s breakneck growth and urbanization, her restaurant group has enjoyed double-digit growth in recent years in revenue and profits.

Zhang’s mission is to revitalize the Chinese restaurant scene by introducing a more upscale and consistent dining experience.

China’s restaurant industry is booming and represents a significant opportunity: it is said it will have revenue of 3.7 trillion yuan (US $590 billion) by 2015 (China Daily).

“Most people in China don’t know how to present food. I am happy that I have given some importance to the appearance of food,” Zhang told the China Daily newspaper.

“I strike a balance between popular and high-end brands in my daily life. This also works for South Beauty Group, which aims to attract customers to a modern place to enjoy high-grade and popular Chinese cuisine.”

Her business mission is to take the group outside of China and become a global brand.

“Buoyed by the booming domestic high-end catering market, South Beauty Group is looking to be a major luxury brand in the global catering industry. It is not an easy task considering that there are different cultures and eating habits. But my past experience has taught me that opportunities often come along with challenges,” she told China Daily.

Zhang’s business story started in a journey to Canada to pursue further education. To make ends meet, at one time she took on six part-time jobs, including washing dishes and food preparation.

Anybody who has gone to another country to work and better their life knows how hard this can be: “During that period, I was so tired by the end of the day that I had to lift my legs onto the bed with my hands,” Zhang said.

But working hard in restaurants and beauty shops earned her US $20,000 in savings within two years.

She returned to Beijing in the early 1990s, a time when the country was undergoing significant market reforms. She opened a small restaurant in Beijing in 1991 serving Sichuan cuisine. Dining out was still a new experience in a country that had spent decades under austere communism. She made her restaurant different by emphasizing cleanliness and unique flavours for the food. She even used the design of the restaurant to set it apart: she gathered bamboo from Sichuan and used it to transform the restaurant into a little bamboo house.

This attention to detail paid off. By 2000, Zhang had been successful enough to give her the confidence to open her first South Beauty Restaurant in Beijing’s China World Trade Center, a high-end office building in the Central Business District. It proved to be a great way to boost her business’s profile.

“It was a bold decision, as rents were high, but I knew the returns would also be high,” she said.

By 2006, she was successful enough to make another brave move: open a luxury restaurant called the Lan Club, in Beijing. Having learned about the importance of distinguishing herself in the ever-growing restaurant marketplace in China, she invited world-famous designer Philippe Starck (http://www.starck.com/en/) to design the restaurant.

For Zhang, there was a bigger strategy at work: “I was not disheartened when some people said that I threw money away like dirt and 12 million yuan (US $1.92 million) was too much for a design draft. But I got great publicity and brand recognition with this design, far more than what is received by most companies which spend millions of yuan on television advertisements. Not everyone in China can boast of a Starck design in their restaurant.”

In 2007, the company also started cooking meals for airlines flying between China and France, the Netherlands and South Korea. In 2008, it won the bid to be food and beverage provider for the 2008 Beijing Olympics and was named official caterer to the 2010 Shanghai World Expo.

“These international events have given us great confidence in planning overseas expansion,” Zhang said.

The hallmarks of the dining experience at a South Beauty Restaurant include dramatic food presentation, upscale décor, a pleasant dining atmosphere and critically, waiting staff who are informed about the dishes they are serving.

Dramatic food preparation includes cooking food at the table for the diners and serving stir-fried shrimp on a plate with a goldfish bowl filled with live fish.

“I want to change the cheap price and bad atmosphere tag that most Westerners have about Chinese food,” Zhang told China Daily.

She has attracted investors to take a stake in the business and become the second richest female entrepreneur in China, according to the 2011 China Restaurant Rich List.

While the international economic crisis is still damaging growth in the United States and Europe, Zhang still plans to go global. She is looking to initially expand into Asia before moving into Europe and North America.

“Our mission is to promote authentic Chinese cuisine across the world. With (the) Chinese economy growing steadily and its cultural influence gaining, it will not be long before we see some big global Chinese catering companies, much like McDonald’s,” Zhang concluded. And it looks like South Beauty Group wants to lead the way.

Published: November 2012

Resources 

1) Restaurant Branding: A website dedicated to discussing restaurant branding and how to do it. Website:http://www.restaurantbranding.com/

2) How to Start a Restaurant: Tips from the Entrepreneur.com website. Website:http://www.entrepreneur.com/article/73384

3) Top tips on opening a restaurant from successful celebrity chef Gordon Ramsay. Website:http://www.channel4.com/programmes/ramsays-kitchen-nightmares/articles/gordon-ramsays-top-tips-for-starting-a-restaurant

4) Tips on how to handle the start-up costs of staring a restaurant. Website:http://www.inc.com/articles/201111/business-start-up-costs-restaurant.html

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Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

Southern Innovator Issue 2

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ORCID iD: https://orcid.org/0000-0001-5311-1052.

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