Chris DeLong is the owner of Highlands Coffee in Guiyang, the capital city of Guizhou Province. Originally from Indiana, he has a background in customer service businesses, ranging from the food and beverage industry to owning a business dealing with high-end automobiles and marine craft. Having first visited China in 1996, he moved here in 2002 with the intent of starting a business. He then spent three years studying Chinese, before opening the first foreign-owned coffee shop in Guiyang in late 2006.
What were your business objectives in opening Highlands Coffee, and how do you reevaluate them? My goal was to open and run Guiyang's first American coffee house, and then to eventually build a chain of stores throughout the province. We want to develop Highlands Coffee into a "third place" – where people spend a substantial amount of time besides home and work – so customers can not only enjoy our beverages, pastries and panini's, but also the American atmosphere and cultural events we put on. We have been profitable since shortly after starting the business, so this is, in one sense, the bottom line in measuring whether we are successful. For a more thorough evaluation, we, month by month, objectively evaluate the business according to various categories in our business plan, and see whether we are on target. Afterwards, we do a more subjective evaluation in regard to how customers are adopting our business model, as well as the success of our brand recognition throughout the city. This information and feedback comes from a lot of face-to-face interaction I personally have with customers. Before opening, you undertook considerable market research. Can you elaborate on this process? I did about two years of research prior to opening Highlands Coffee. Over the years, I have observed many dreamy-eyed western businessmen and women come to China wanting to strike it big, but they did not do any language and/or cultural study, nor do fundamental business research so they could validate their business dreams. This resulted in too many assumptions being wrong, and a lot of disappointment along with a loss of investment capital. After this observation, I committed that I was not going to do the same. My research consisted of language and cultural study, talking to the foreign investment department many times regarding application processes and requirements, visiting many existing Chinese coffee shops, coffee suppliers, business trade shows and lots of informal surveying among Chinese friends. Once I felt like I had a fairly good handle on the coffee industry, and the status of our potential customers, I wrote a formal business plan and began the paperwork process to incorporate our foreign investment. I believe this initial time of research and learning has paid off significantly on the back end of the coffee house start-up. What have been the major challenges of operating a coffee shop in Guiyang? I think that one major challenge has been learning to deal with the attitude toward employment that most young Chinese have. Most come with a cultural and educational background where they have accumulated no work experience prior to starting a job or career. Their attitude towards work is not based on real life experience, but only what educators or family members have told them. They have the idea that if they have gotten a higher education, then they are going to immediately get an upper level employment position which will be given to them, not earned. Another challenge is that they have not developed the skills to problem-solve, do pre-emptive planning or creative thinking on their own. For too many years, they just memorised what their teachers/superiors told them, which does not develop the decision-making skills and leadership abilities that are needed in a career. This is especially challenging for them at Highlands Coffee since we incorporate certain American management practices into our business, and we also create an American coffee house atmosphere and culture, which differs from anything they have experienced before. It takes an incredible amount of time to develop these skills and abilities, so that they are qualified to take on more responsibility. Another challenge has been that of developing a business run on ethical principles, because there are many dynamics in China that go against doing that. As an example, just trying to get a proper receipt (fa piao) from a supply company, so it can be recorded as an official company expense, is a challenge because many, many people refuse to supply these since they would then be obligated to pay tax (which they don't do). Recently, I read an article about an exchange in the United States. where a visiting group of Chinese entrepreneurs had expressed serious concerns that in the eyes of many Chinese young people, becoming rich and being ethical are somehow mutually exclusive. That is certainly a daily reality we deal with in the business world here. How have local customers responded to the new concept, and how different/similar are customer preferences to those in the United States? When customers first come here, they are not accustomed to our concept, since we are Guizhou Province's first American coffee house. We differ in many ways to a local Chinese style coffee house. We offer speciality coffee and other beverages, as well as home-made American pastries and panini's with fresh baked bread. We have a quiet atmosphere, with jazz and other American music in the background, and separate our smoking and non-smoking sections. We also provide wireless internet service. Most customers are accustomed to a Chinese coffee house, which is a smoke-filled establishment and more of a restaurant, bar or mahjong house than a western style coffee house. It has taken a lot of time to educate them on our concept. Once they understand it, though, they love it. I cannot say that a Chinese style coffee house is their preference, but, until we opened, it had been the only choice available. We now have many customers that come here several times a week because, in general, the requirements of a customer are the same as those in the United States. They want a high-quality product, with good service, and the experience of enjoying both in a hip place. What has running the business taught you personally about operating in China? Firstly, it has taught me that, "the flexible shall not be broken." There are many hats I must wear here in Guiyang that I have never had to deal with prior to opening Highlands Coffee. I have had to learn to walk through the open doors of opportunity, even if some of them are not what I consider my strong points. Things such as the Provincial TV station walking through the door and wanting to do an interview for a programme they are putting together. Programme content then needs to be quickly put together, for which they want my help, and then I need to formally communicate it all in Mandarin for the camera. Secondly, I have learned a lot more about what is happening in the investment scene here in Guiyang. Highlands Coffee has become somewhat of a place for expats and other Chinese investors to network, since we are the only foreign-owned and run food and beverage establishment in the entire province. In the first nine months that we have been open, customers from 23 different countries and 19 different provinces in China have come to the coffee house. Most of these folks walked through our front door because of word-of-mouth networking and advertising. This has just been a really great experience.
Last update : Monday, 31 December 2007
|
|
|
News & Interviews 
(0 vote)
