This touch-point contains insights from a Chinese-Australian expat in China who co-owns 65 food and beverage cafes selling western food.
This is an example of where Australia’s agri-produce can end up in China.
I was privileged to attend a presentation last night by Jackie Yun, co-founder of Wagas.
Jackie is a third generation Chinese-Australian. She did not speak Mandarin when she moved to China in the late 90s after a listless lifestyle in Sydney. The youngest in a big family, a spoilt brat, she was an atypical Chinese-Australian – a poor academic student who loved sport and drinking, and had a poor work ethic.
All this changed in China when her search for her true calling ended up in food and coffee. She met her business partner there – a Danish entrepreneur, John Christensen, also with no Mandarin speaking skills, who convinced her to join his new cafe venture in Shanghai in 2001.
Today, that venture, Wagas, is an up-market cafe chain of 65 stores nationwide with 1300 staff. Initially targeting Western expats, 90% of its customers are now hip, young Chinese millennials keen to be seen in her cafes, and to experience Western food and ambience within China.
Her key insights:
- Healthy and safe eating, in a Western way, are the themes for her chain. This theme has captured a ready audience in China.
- Growth has been organic. No reliance on debt to fund expansion.
- She spends nothing on marketing, but is very careful in site selection. It must be premium high-traffic areas and is usually next to a Starbucks.
- She benefits from Starbucks’ marketing efforts for their 2000+ stores in China, by getting Starbucks customers to visit her cafe next door instead. She spends on design and architecture to make her cafes appealing.
- She acknowledges these are expensive leases, (music to the ears of retail landlords) but believes it is compensated by high visibility, prestige and foot traffic, hence nothing much else on marketing apart from a WeChat account with 400,000 connections.
What struck me was her humility in that she gave credit for her success to others rather than herself.
Brad Chan (who is a speaker at my SIV / Chinese in Australia Lunch Seminar and a third generation Chinese Australian whose family is in the BRW Rich Families List) is a family friend of Jackie’s.
He related a story where Jackie’s father, while was recently on holidays on China, had bought 10 rolls of toilet paper for their apartment and had left it in Jackie’s cafe for her to take home. And so she did, carrying it for a 15 minute walk home, whereas most Chinese tycoons would be aghast at doing something like this.
Jackie’s presentation was organised by HaymarketHQ – a not-for-profit startup incubator seeking to help tech-based startups do business into Asia. HaymarketHQ, based in Chinatown, Sydney, is backed by the Chan family’s Banna Foundation.
Her other insights:
- Due to China’s e-commerce boom, many fashion stores are closing, so landlords are getting food and beverage (F&B) businesses to fill these empty spaces, increasing sector competition.
- Creating a company culture is important. Fostering a ‘brother-sister’ relationship amongst staff has helped. It is part of the Chinese culture to look after your brother or sister, especially in the poorer rural families from where many of their staff come from. (And where often there is more than 1 child in the family).
- Despite this, turnover of staff is around 46% annually due to fierce competition for F&B staff as the consumer society grows.
- The continued crackdown on corruption and constant regulatory changes is actually good for businesses who follow the rules as it wipes out dodgy competitors.
Meanwhile, my lunch-seminar on high-net-worth SIV /Chinese in Australia on track for full capacity. Please register soon to ensure you get a seat at the table!