Zhang Yong, creator of the wildly popular Chinese hot-pot chain Hai Di Lao, may not have the global cult following Steve Jobs, but in China’s food and beverage industry, he isn’t far behind

May 24, 2013, 12:00 PM

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Zhang Yong, the creator of the wildly popular Chinese hot-pot chain Hai Di Lao, may not have the global cult following of Apple founder Steve Jobs, but in China’s food and beverage industry, he isn’t far behind. In 2011, bookstores stocked the shelves with “Learn from Hai Di Lao.” Media outlets are clawing for an opportunity to interview him, a spokeswoman said.

The question for the entrepreneur—who has built a growing empire of 75 restaurants that serve sliced lamb, beef and vegetables to be boiled in spicy broth—is always, What’s next? And how did he come up with the idea to distinguish his chain with service perks like manicures, board games and noodle performances?

Mr. Zhang, who confesses that after 20 years of eating hot pot he doesn’t particularly like it, said he plans to take Hai Di Lao public, but isn’t sure in which market. The timing isn’t optimal right now, he adds, noting that other Chinese companies have listed and flopped almost instantaneously.“I’m from the countryside, where rural people believe that if you take money from other people and you don’t bring benefit to them, then you are a liar,” Mr. Zhang said, saying he’ll list Hai Di Lao when the business model can be profitable and more easily replicated.

Hai Di Lao pulled in a 10% profit on 3.127 billion yuan ($510 million) in revenue in 2012, up 54% from a year earlier.

The native of China’s southwestern Sichuan province is eager to expand overseas—and has already begun, opening an outlet in Singapore last year. This September, it’ll be the U.S.

But Mr. Zhang said not to expect a sweeping overseas effort: He’s opening just the one restaurant in Los Angeles and at the moment doesn’t have plans to for more in Singapore.

“It’s not about expanding quickly,” he said, adding, “I want to understand the market.”

Back in China, Mr. Zhang, who says he detests reading management books, said one of the most important aspects of his job is letting employees run the business. Many of the service ideas that have made Hai Di Lao so popular in China, like providing plastic bags for phones (lest they land unprotected in the broth) and hair bands to long-haired girls (lest their hair do likewise), actually came from his employees, he said.

“Not all of these ideas were mine,” Mr. Zhang said. “If you want creativity, you have to let your workers invent and use their creations.”

Still, the 43-year-old entrepreneur has his own brainstorms and has a sincere passion for technology, which is part of the reason that last year he rolled out cyber dining, connecting diners in Shanghai and Beijing through the Internet and flat screens. “I’d put robots in every restaurant if I could,” he said.

But ask Mr. Zhang how others can follow in his success as one of China’s most renowned restaurant owners and he will say, “Don’t study me; learn from Steve Jobs.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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