Chinese Character

Sichuan’s spicy lady

Meet China’s most high-profile restaurateur

Food for thought: Zhang Lan earned her $20,000 seed capital in Toronto

“In the West and Japan, after marriage women stay at home to look after the kids, but in modern China it’s not like that,” says Wang Jiafen, head of the Shanghai Women Entrepreneurs’ Association. “Chinese women do not want to stop their career just to be a housewife.”

Just ask Zhang Lan, founder of the South Beauty Group, one of the country’s most successful restaurant chains. Zhang didn’t stay home. She sent her son Wang Xiaofei to school in Switzerland when he was 14 years old. She remained in China to build a restaurant empire.

Asked if she regretted sending her son so far from home, Zhang said: “At 15, I was sent to the countryside [during China’s Cultural Revolution], and had hardly any playmates. So why should I feel badly about my son having the chance to go to school in Europe?”

When she was 31, Zhang moved to Toronto. To make ends meet, she juggled part-time jobs, washing dishes and cutting meat for $3.50 an hour.

“When you work at a restaurant, there are millions of things waiting for you to do. The hard work and misery are simply indescribable,” Zhang recalls.

“I was so tired by the end of the day that I had to lift my legs onto the bed with my hands.”

But even with her meagre wages in Canada, Zhang earned nearly as much in a day as she might earn in China in a month. Determined to build her career back home, she eventually saved $20,000 to start her own Chinese business in 1991.

She used the money to open a seafood restaurant of her own. It went well and she accumulated another Rmb6 million of savings. These were then invested in her first South Beauty restaurant in 2000.

Zhang set out to offer a different dining experience. South Beauty, the flagship chain and one of three restaurant brands run by her company, has built up a following with its blend of modernised Sichuan food and Western-inspired settings. South Beauty Group became one of the nation’s first upscale domestic restaurant chains.

Zhang was quick to grasp the importance of branding. When she opened her first South Beauty restaurant she chose the China World Trade Tower, one of Beijing’s most expensive buildings. At the time it was a risky move: rental prices were high and her concept of a luxury Chinese restaurant brand was untested. But she pressed ahead. “I want to change the world’s impression of Chinese food. To do that, I first need to change Chinese people’s impression of the cuisine,” says Zhang.

South Beauty soon became popular, not only among expats but also with the local wealthy. Similarly, when Zhang opened the first Lan Club in Beijing, a restaurant and bar, she hired French designer Philippe Stark to do the interior design.

According to China News Weekly, Zhang insisted on hiring Stark despite a rumoured Rmb10 million price tag because she knew his name would put her club on the map. In fact, she thought she had got a good deal. “I was once told in Shanghai that a grand neon advertisement on the Bund would cost Rmb100 million a year,” she adds. But she felt Stark’s touch would help publicise the brand even further. “A good pearl needs good packaging.”

To reach a wider public, Zhang also tempered the cuisine that her restaurants offer. Even though they serve a Sichuan style, she has toned down the traditionally blistering chilli taste of the provincial spices while retaining the nuances that seasoned Sichuan veterans still find acceptable.

She also focused on presentation. Among South Beauty’s signature items is the “rock and roll salad,” says China News Week. Zhang came up with the idea during a vacation in France, where she ordered a salad that was tossed at tableside. Inspired by the experience, she replicated the process at her own restaurants, but stuck with salad with Chinese ingredients.

Last year, South Beauty group was rated by the China Hotel Association as one of the top 10 Chinese restaurant brand names, ranking alongside the likes of Quanjude and Little Sheep, two enormously popular chain restaurants.

Zhang is an aggressive self-promoter and features frequently in media coverage discussing her plans to grow the restaurant chain.

Not all has gone to script. Last year, she told the Wall Street Journal that she expected to have 100 restaurants open by the end of this year. That now looks over-ambitious: she is probably going to have to revise the number as the company had 56 restaurants as of May. Zhang has also been talking about taking South Beauty public since 2006, when Nasdaq was mentioned. That seems to have gone on hold too.

In the meantime, Zhang has been sourcing funds from new backers, and in a recent interview with the China Daily she revealed that she had secured $43.9 million in the latest round of private equity financing. The aim, she says, is to expand the brand’s portfolio to more than 200 restaurants globally and to build what she calls the “Louis Vuitton” of restaurants: “My goal is that one day there is a South Beauty restaurant in every city that has a Louis Vuitton store.”

As part of the strategy, Zhang has been trying to adopt best practices from other major chains, and has reorganised South Beauty’s internal management and marketing capabilities. She has also been hiring Chinese executives from McDonald’s and Coca-Cola to help with her expansion plans.

Meanwhile, to keep herself up to date, Zhang travels frequently to the US and Europe to source new recipe ideas and pick up on regional nuances.

Her verdict? “In the US people are very open and warm,” she says. “In Europe people are gentlemanly and proper – it needs to be perfect.”

But Zhang has also been busy answering questions from the media about her son’s recent engagement to Taiwanese actress Barbie Hsu (see WiC41). Apparently the engagement was announced after only four dates. A case of love at (practically) first sight? Not all are convinced.

The People’s Daily website says some netizens are suspicious of the timing. Some of them reckon that Zhang’s son – who like his mother has a penchant for publicity – is getting married to Hsu because South Beauty is opening a new restaurant in Taiwan.

The pair have not exactly been keeping a low-profile: they have been blogging about their “instant connection”. Hsu meanwhile has caught some online flak, with jibes that her nickname should be adapted from the ‘Big S’ to ‘Big $’. Nonsense, she says: we fell in love before I knew he was rich.

Zhang herself has also called the rumours “vicious, boring and ridiculous” and says she has hired lawyers to pursue those responsible.

Then again, there’s the old cliché that there’s no such thing as bad publicity, and clearly it’s better that people are talking about your brand than not.

After the news broke that Wang and Hsu were engaged (as well as the ongoing speculation on the potential motives behind the proposed union) mentions of Zhang and her South Beauty empire have mushroomed on both sides of the Taiwan Strait.


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