Countryside business ethics. A firm vision to give customers an unforgettable Sichuan hotpot dining experience. These have become the stepping stones of China’s once small villageman Zhang Yong to Forbes fame as one of world’s wealthiest people.
This CEO of Haidilao International Holding Ltd which in 1994 started the restaurant chain Hai Di Lao Hot Pot — one of the world’s most famous Sichuan-style eateries — has a nett worth of US$6.8 bil, placing him in the 224th position on the list.
In 2017, the Beijing-based restaurant chain reported US$1.6 bil in revenue and, in September, it raised nearly US$1bil in an intial public offering (IPO) that valued the company at roughly US$12bil.
Yet, the successful Hai Di Lao of today did not materialise easily as Zhang’s humble beginnings made this journey extremely challenging.
According to a 2011 Economic Observer interview with Zhang, the new Forbes list member came from a small village. Landing employement after vocational college, he quit his job to start his own business.
At that point, he had not even had a cooking background, let alone a strong handle on preparimg traditional Sichuan hotpot dishes.
However, he had had a vision of giving customers an inviting and memorable restaurant experience.
Penniless then, he got others (whose identities were not stated) to invest in his business, which was worth less than 10,000 yuan. Zhang’s iron will and work ethic did the rest.
He says, “Although I didn’t contribute much in terms of start-up money, I assumed the position of general manager and promised the others that our assets would grow to 150,000 yuan within five years. I swore that if I couldn’t manage it, I would compensate them. That was a huge amount of money for a group of twenty-somethings in the 1990s. So, they were all a bit startled.”
In 2013, he told The Wall Street Journal that he believes in the importance of superior customer service: “I’m from the countryside where rural people believe that if you take money from other people and you don’t bring benefit to them, then you are a liar.”
Zhang also believes in financially incentivising managers who run Hai Di Lao’s many branches towards even better management. His company reportedly offers managers a three percent share of their restaurants’ profits.
He also gives credit to employees who come up with popular ideas, telling The Wall Street Journal, “If you want creativity, you have to let your workers invent and use their creations.”
With regard to Zhang’s name on the Forbes list, netizens have mixed reactions. Some are concerned if the money is donated to charity while others are concerned about taxes.
TISG has reached out to Haidilao for more comments.
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