Hotpot chain Haidi Lao places the emphasis on a very personal service
By Jin JIng |
August 19, 2011, Friday
|
Print Edition
Print Edition
THERE is an old Chinese saying: "Fragrant wine needs no bush." It means you can always find customers if you offer a high-quality product.
I had a first-hand experience with the service sector last week. The occasion was a lunch at Shanghai's hottest hotpot chain, Haidi Lao. The Sichuan-style meal cost me about 100 yuan (US$15.50.)
But it was not the food that caught my attention. While waiting to be seated, diners are treated to free services, such as nail polishing and shoeshines. I decided to have my nails done, but was irritated by the lack of skill and the attitude of the young manicurist, and the poor quality of the polish she used.
After leaving the restaurant, I called to complain about the experience, and was surprised to discover the next day that the restaurant had deposited 300 yuan in my bank account along with a message from the manager thanking me for pointing out the breach in service.
I wrote an account of my experience on my Weibo blog and received about 20 comments from people thinking the restaurant's actions were quite unbelievable.
What impressed everyone was that I had been compensated for a complaint about a service that was free, and that the compensation was substantial enough to pay for three manicures at an upmarket salon.
"We make no excuses," the store manager told me on the telephone. "You complained, and we will try our best to make amends."
I must say his response dramatically changed my perception of the restaurant and made me think how high-quality service is so important in such a competitive market as China's.
Haidi Lao, which means literally "fishing in the bottom of the sea," was founded by businessman Zhang Yong in Sichuan Province in 1994, according to the restaurant chain's website.
The restaurant became so popular that reservations are recommended. Some diners have to wait - sometimes for hours - to get a table. The chain earned fame by offering free distractions in its waiting areas, including Internet access, poker and chess games. Waiters often offer waiting customers complimentary snacks and drinks.
Once at the table, the restaurants offer protective clothing to keep food and drink from staining customers' clothes.
A popular picture on Weibo shows a baby sleeping peacefully in a crib provided by the restaurant. One diner wrote that he was given three top-selling books after complaining to companions during a meal how hard it was to buy them.
Some online comments have given the restaurant the ultimate compliment by saying: "There is no expectation that cannot be fulfilled by Haidi Lao."
The popularity of Haidi Lao highlights consumers' insatiable appetite for quality service in China's hospitality industry.
"Traditionally, service at Chinese restaurants is not very good and Chinese eat out only for the taste of the food," said Professor Yu Hai of the Department of Sociology at Fudan University. "What Haidi Lao does is to offer a different service experience to make customers feel important. When people are in a good mood, they are willing to spend more, and that is what Haidi Lao gets for its premier service."
Last year, the nation's top 100 restaurants - including Yum! Brands and rival hotpot chain Little Sheep - racked up sales of 139.6 billion yuan, a near 12 percent gain from a year earlier, according to the China Cuisine Association.
Yet the earnings of the top 100 accounted for only 7.9 percent of China's overall restaurant revenue, which tells us that the industry is fragmented and ripe for dominant players to play their hand.
Haidi Lao has built its market position in the popular hotpot segment of the market, where rivals include Beijing-style chain Dong Laishun and Inner Mongolia-based Little Sheep, which is now a takeover target for Yum! Brands.
Hotpot restaurants, with similar fare and dining style, have focused on price to distinguish themselves. Haidi Lao is taking that one step further to include service not readily found elsewhere.
The chain owns more than 50 restaurants in cities such as Shanghai, Beijing, Nanjing and Shenyang. It also operates four processing and logistics centers and an ingredients factory. In 2009, its sales revenue was estimated at 1 billion yuan and its workforce numbered 10,000.
According to media reports, the company plans to open its first overseas restaurant in the US later this year. It is also reported to be eyeing expansion in Europe.
Although Haidi Lao is redefining service in the restaurant industry, that does not come without a cost. "Extra services are seemingly offered free, but the cost is no doubt added to the price of the dishes," Yu said.
The menu at Haidi Lao is indeed a little bit more highly priced than similar hotpot chains in the city.
So the challenge is to ensure the peripheral services are of a high-enough quality to impress diners even before they take their seats at the table.
In addition, it is not an easy job for Haidi Lao always to deliver service that beats expectations.
"Satisfaction is a very personal thing," said Yu. "It will not please all the customers all the time. If the restaurant is targeting the mass market, the taste of the food is still the top priority."
On a breezy Friday night, as I made my way home with a beautiful new orange polish on my nails that would have cost me 78 yuan at a salon, I thought back on my Haidi Lao experience. I will go back for another meal sometime.
I had a first-hand experience with the service sector last week. The occasion was a lunch at Shanghai's hottest hotpot chain, Haidi Lao. The Sichuan-style meal cost me about 100 yuan (US$15.50.)
But it was not the food that caught my attention. While waiting to be seated, diners are treated to free services, such as nail polishing and shoeshines. I decided to have my nails done, but was irritated by the lack of skill and the attitude of the young manicurist, and the poor quality of the polish she used.
After leaving the restaurant, I called to complain about the experience, and was surprised to discover the next day that the restaurant had deposited 300 yuan in my bank account along with a message from the manager thanking me for pointing out the breach in service.
I wrote an account of my experience on my Weibo blog and received about 20 comments from people thinking the restaurant's actions were quite unbelievable.
What impressed everyone was that I had been compensated for a complaint about a service that was free, and that the compensation was substantial enough to pay for three manicures at an upmarket salon.
"We make no excuses," the store manager told me on the telephone. "You complained, and we will try our best to make amends."
I must say his response dramatically changed my perception of the restaurant and made me think how high-quality service is so important in such a competitive market as China's.
Haidi Lao, which means literally "fishing in the bottom of the sea," was founded by businessman Zhang Yong in Sichuan Province in 1994, according to the restaurant chain's website.
The restaurant became so popular that reservations are recommended. Some diners have to wait - sometimes for hours - to get a table. The chain earned fame by offering free distractions in its waiting areas, including Internet access, poker and chess games. Waiters often offer waiting customers complimentary snacks and drinks.
Once at the table, the restaurants offer protective clothing to keep food and drink from staining customers' clothes.
A popular picture on Weibo shows a baby sleeping peacefully in a crib provided by the restaurant. One diner wrote that he was given three top-selling books after complaining to companions during a meal how hard it was to buy them.
Some online comments have given the restaurant the ultimate compliment by saying: "There is no expectation that cannot be fulfilled by Haidi Lao."
The popularity of Haidi Lao highlights consumers' insatiable appetite for quality service in China's hospitality industry.
"Traditionally, service at Chinese restaurants is not very good and Chinese eat out only for the taste of the food," said Professor Yu Hai of the Department of Sociology at Fudan University. "What Haidi Lao does is to offer a different service experience to make customers feel important. When people are in a good mood, they are willing to spend more, and that is what Haidi Lao gets for its premier service."
Last year, the nation's top 100 restaurants - including Yum! Brands and rival hotpot chain Little Sheep - racked up sales of 139.6 billion yuan, a near 12 percent gain from a year earlier, according to the China Cuisine Association.
Yet the earnings of the top 100 accounted for only 7.9 percent of China's overall restaurant revenue, which tells us that the industry is fragmented and ripe for dominant players to play their hand.
Haidi Lao has built its market position in the popular hotpot segment of the market, where rivals include Beijing-style chain Dong Laishun and Inner Mongolia-based Little Sheep, which is now a takeover target for Yum! Brands.
Hotpot restaurants, with similar fare and dining style, have focused on price to distinguish themselves. Haidi Lao is taking that one step further to include service not readily found elsewhere.
The chain owns more than 50 restaurants in cities such as Shanghai, Beijing, Nanjing and Shenyang. It also operates four processing and logistics centers and an ingredients factory. In 2009, its sales revenue was estimated at 1 billion yuan and its workforce numbered 10,000.
According to media reports, the company plans to open its first overseas restaurant in the US later this year. It is also reported to be eyeing expansion in Europe.
Although Haidi Lao is redefining service in the restaurant industry, that does not come without a cost. "Extra services are seemingly offered free, but the cost is no doubt added to the price of the dishes," Yu said.
The menu at Haidi Lao is indeed a little bit more highly priced than similar hotpot chains in the city.
So the challenge is to ensure the peripheral services are of a high-enough quality to impress diners even before they take their seats at the table.
In addition, it is not an easy job for Haidi Lao always to deliver service that beats expectations.
"Satisfaction is a very personal thing," said Yu. "It will not please all the customers all the time. If the restaurant is targeting the mass market, the taste of the food is still the top priority."
On a breezy Friday night, as I made my way home with a beautiful new orange polish on my nails that would have cost me 78 yuan at a salon, I thought back on my Haidi Lao experience. I will go back for another meal sometime.
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