It’s difficult to fail in China

This is the third installment of a new ``Doing Business in China: Learning from Mistakes’’ series. China is South Korea’s largest trading partner. Many Korean businesses are presently in China. In this series we ask successful CEOs to share a business mistake they made in China and how they improved on it. — ED.

By Sunny Lee

BEIJING — Shin Ja-sang, the head of South Korea’s food chain giant Jung Sung Bon, entered the Chinese market six years ago and found it hard not to succeed.

“It’s difficult to fail in China. I even prefer the Chinese market to the Korean one,” said Shin.

That’s a bewildering statement. As China has become a global business obsession, various Korean companies have joined the global bandwagon to enter its market. There are opportunities, but competition soon proves to be very fierce.

But Shin argues that when it comes to running a Korean restaurant in China, there are a few advantages. “First of all, Korean food is the most favored foreign food among Chinese people. Secondly, there are many Korean companies in China. And they naturally tend to bring their clients to Korean restaurants. In a sense, the companies function like a natural PR rep for the restaurants. With these two advantages, when you offer the right menu you are bound to succeed,” said Shin.

So, what’s Shin’s secret recipe for success?

“I serve Korean food in the old style. Don’t you think the food here looks more Korean than in restaurants in Korea? And I do it ‘bap han sang’ (a table full of food). I make everyone who comes here feel they have had a hearty meal. That’s it.”

Indeed, the interior of Shin’s restaurant looks like a courtyard from the Joseon Dynasty, with a brook passing through. They don’t use plastic bowls, common in other restaurants. The dinner set is all made from metal, just like in the old times.

During the recent global financial crisis, many of the 700-odd Korean restaurants went belly up. Shin’s was one of the few exceptions, faring well with continued sales growth.

Shin attributes his success to his pursuit of a “high-end” market strategy, as he saw Chinese people becoming richer. “I wanted people to bring their business clients here and not lose face. But at that time, it was hard to find such a place in Beijing. So, I started one,” said Shin, at one of his three chain restaurants, Ai Jiang Shan, which offers 249 different dishes.

Today, Ai Jiang Shan is arguably the most famous, up-scale Korean restaurant in Beijing with 1,800 customers each day. Even the Chinese foreign minister and movie celebrities such as Zhang Ziyi have dined there.

Today, the South Korean government is spearheading a campaign to make Korean food, or hansik, a worldwide cuisine, as part of its strategy to boost its soft power.

While welcoming the move, Shin is also concerned about the approach that seems to prefer a propagation of quantity over quality. “The globalization of hansik doesn’t mean mass-producing Korean food in factories,” said Shin, adding big companies often disregard the “emotional” aspect of the food that comes with the non-quantifiable aspects such as atmosphere, music, interior design and immaculate service.

“Things can go wrong in the so-called globalization of hansik. Korea should keep its self-esteem for its food. Otherwise, you could see mass-produced, low-quality food all over the world,” said Shin.

He debunks the view that foreign companies in China are placed at a natural disadvantage when it comes to local competitors due to government favoritism. “You’re not at a disadvantage simply because you’re a foreigner in China,” he said, advising that while labor costs in China are cheaper, it is very important to abide by the local labor laws, to which the Chinese government is paying keen attention to these days.

Maintaining a good chemistry with Chinese employees is also important. And he has a way of gently prodding them to cultivate a more customer-oriented mindset that provides better service.

“Many people bring their business partners to my restaurants. I tell my employees that we don’t just sell food. We are helping them to succeed in their business.”