To have dining / snack business in China

[mcgau]

Like many uncreative minds, the most common way for entrepreneur wanna is to open up a bar, cafe or restaurant.

I'm thinking of opening my small shop in China, preferably in the south east, like yunnan, sichuan. The shop is less than 400-700 sq. feet, small enough for me to manage. It helps me pay my bills and kill my time. I don't have my plan on budget yet, but I guess even if the business fails, the loss of such small shop is limited.

Cuisines is non-Chinese food, easy to make, possible for standardization, frozen food is preferred, less dependent of the technique of a chef.

doner kebab seems to be a good choice. It's possible to serve a roll, burger, and even rice and the variety of sauces seem okay to serve different needs. If they want a Sichuan mala sauce for kebab, why not?

The best of all is that people don't know what the authentic donner kebab look like.

What do you think of this?

Edited December 20, 2009 at 09:25 AM by mcgau
Title Change

[valikor]

Donner Kebab in China would be amazing! I'm not saying this from a business standpoint, but rather because I would really, really like some right about now. If you open it in Beijing, I can guarantee you have at least one customer.

Plus, you can just open it on the back of a bike (at least to start, and test the waters), The investment would be small, and the thousands of other people doing the same thing seems to indicate that it's viable. I wonder how much profit they make, though.

By the way, we have something in Beijing that is kind of similar to Donner Kebab (though definitely not as good). I forgot what they call it, but they roast the lamb on the rotating skewer, shave it off, and mix it with cucumbers or something... I like it, for 3 kuai..

[gougou]

If you open it in Beijing, I can guarantee you have at least one customer.

Ditto.

At least if you assume that your customers know what the real thing looks like - which is not too far off from the mark, as your customers should mostly be foreigners anyway.

[mcgau]

Correct me if i'm wrong. I'm not actually deeply familiar with kebab yet.

The cost of making the so-called 'authentic' donner kebab seems quite high in China. It may need sour cream and a lot of fresh chili to make parts of sauces. This can be expensive, especially fresh chili and sour cream.

Pork may possibly be avoided in these shops. I dunno. I mean it may offend Muslims, but beef and lamb is around 1.3-2 times more expensive than pork. Chicken breast is cheap but I've never tried chicken one. Always go for lamb or beef when I'm home.

Pricing is really a big issue in China. I mean, I can easily set the price to over Rmb20 but customers, no matter where they come from, possibly compare this with 肉夾饃 or 夾餅, which is around RMB1.5 to 4 only. In my observation, the snack market is rather grass root. Things over RMB10 aren't that common but for the price like this, it's impossible to get enough profit margin (>50-100%, depending on location) to offer "sufficient" meat and provide homemade sauce.

Weird is the purchasing power. When people take 肉夾饃, they can afford to buy 2-3 pieces and they feel satisfied, but it seems that they aren't willing to pay the sum of these money to buy a bigger one.

If I can make the one 90% the same as the one you buy in a shop next to a bar in london, how much are you willing to pay this? What about a miniature kebab roll? Let say, if I'm gonna make the palm-sized one, how much are you willing to pay?

[mcgau]

Another simple choice for me is to have a confectionery shop, possibly located in some commercial areas in a provincial capital.

Similar to the Jelly bean shop, it allows customers to pick their choices and put it in a plastic bag, then weigh it. If I really go for it, the product will be similar to what local Chinese call "QQ Tang" (Gelatin-based candy like Gummi Bear, or Gelatin-Marshmallow like Gummi Burger) , but sharp and color will be more complicated than this.

Products of Haribo (in case you don't know it: http://en.wikipedia.org/wiki/Haribo ) is available in China but the wholesales pricing seems to be too high. I've contacted several suppliers before and their offer is > RMB50/ kg. ( i.e. RMB5 per 100g.)

The best of all is that substitutes are always here in China and some cheaper alternatives may be good too.

Candy is not what you will buy every day as Donner kebab (well, people may not eat this every day too, but the target market for rice, roll or burger should be wider) , but candy market has two of biggest pocket customers in China: Wedding (wedding candy, Xi Tang) and Little Emperor.

What do you think of these ideas?

Anyway, I still enjoy indulging myself into Chinese Dream. Don't wake me up.

[anonymoose]

There are some Turkish restaurants in Shanghai that serve kebab. I've not been so I don't know what the quality is like, and they tend to be in foreigner-frequented locations (like Hengshan Road), so I suspect they also have "foreign" prices.

Yunnan is one of the poorer areas of China, so I suspect quite a lot of the local population will not be part of your customer base, and I'm not sure if there are enough foreigners to keep you afloat. You could always diversify and combine a kebab restaurant with English school. That way you would get more customers.

Also, regarding the price of meat, you could always insert a few layers of cardboard between the meat that goes on the rotating skewer to bulk it up a bit and keep your costs down. Once all the fat has been absorbed into the cardboard, noone will be able to tell the difference.

[liuzhou]

This can be expensive, especially fresh chili

What makes you think that chilli is expensive in China?

It may need sour cream

I've never, ever come across sour cream on a doner kebab.

I'm not actually deeply familiar with kebab

Go on. You had me fooled!

[mcgau]

Also, regarding the price of meat, you could always insert a few layers of cardboard between the meat that goes on the rotating skewer to bulk it up a bit and keep your costs down. Once all the fat has been absorbed into the cardboard, noone will be able to tell the difference.

Hi I don't really get it. cardboard...you mean serving cardboard as a meat to a customer...? It makes me think of the famous Chinese paper bun

What makes you think that chilli is expensive in China?

because i bought it. Long green chili costs RMB10-12 per kg and it takes a load of it to make a sauce.

I've never, ever come across sour cream on a doner kebab.

Wikipedia helps : http://en.wikipedia.org/wiki/D%C3%B6ner_kebab

that's a problem in making "authentic" because variations are a lot. My favorite one is sour cream dressing possibly mixed with cucumber juice. The taste is so fresh.

What kinds of dressing are common to your local kebab shop? If I had a kebab shop, i actually wouldn't want to make these dressing. Too costly, too time consuming. Ready made is the best.

[liuzhou]

Quote:

I've never, ever come across sour cream on a doner kebab.

Wikipedia helps : http://en.wikipedia.org/wiki/D%C3%B6ner_kebab

The only mention of sour cream on that link is to the "fact" that doner kebabs are sometimes served with sour cream in Denmark!

Good luck with your Danish Kebab shop.

[gougou]

You need to decide whom you want to sell too. If it's to Chinese, you better be able to compete with the 4-kuai snack vendors - on price, that is. If it's to foreigners, you got some more latitude on price, but you better make sure you're selling something well (even though those guys in Sanlitun got a lot of money out of me already for some pretty bad kebabs...)

[adrianlondon]

Surely there are lots of Turkish style kebab places in China? Beijing is full of them and they make it in a similar style to those I've had in mainland Europe, which is more "gyros" style than "doner". The UK is an exception as we tend to have doner - the thin slices of lamb taken from a special piece of pressed and processed meat. We also eat it in pitta bread.

In Athens (I've not ben to Turkey) they use a small round nan type bread and fill it with gyros. Very similar to the kebabs I've eaten many times in Beijing and they are both equally tasty. In Germany (with a huge Turkish population) they have both the gyros and doner styles and serve them in very thick bread. Germans love bread and potatoes - they like to feel full as cheaply as possible hence the adaptation.

I am not sure a doner place will do well in any city which already has those (Tu'erqi kao rou : 土耳其烤肉). However, I've not travelled much in China so may only Beijing and Shanghai has these (outside the west of China which, I assume, must have them).

[liuzhou]

Jellied Eels! That's the way forward!

(But no Danish eels!)

[adrianlondon]

I was going to suggest fish and chips - Fish Nation in Beijing is good - but you need good quality fish and you need to know what you're doing. The locals will be wary and the expats will slag you off on every internet forum if they're not very good.

[anonymoose]

I was going to suggest fish and chips

Now that's an idea I like the sound of.

To cater to the different tastes, the most succulent meaty fish could be served to the foreigners, whilst reserving the bony fish for the locals.

[liuzhou]

Forget the fish - just do chips..Outside every school in China.

(Sorry! I patented the idea yesterday!)

[mcgau]

Surely there are lots of Turkish style kebab places in China? Beijing is full of them and they make it in a similar style to those I've had in mainland Europe, which is more "gyros" style than "doner". The UK is an exception as we tend to have doner - the thin slices of lamb taken from a special piece of pressed and processed meat. We also eat it in pitta bread.

In Athens (I've not ben to Turkey) they use a small round nan type bread and fill it with gyros. Very similar to the kebabs I've eaten many times in Beijing and they are both equally tasty. In Germany (with a huge Turkish population) they have both the gyros and doner styles and serve them in very thick bread. Germans love bread and potatoes - they like to feel full as cheaply as possible hence the adaptation.

I am not sure a doner place will do well in any city which already has those (Tu'erqi kao rou : 土耳其烤肉). However, I've not travelled much in China so may only Beijing and Shanghai has these (outside the west of China which, I assume, must have them).

Thanks for the information about different variation of kebabs. One of the variations I like is actually Vietnamese. Meats are put into a crispy baguette and with Hanoi-style chili sauces (brown color, has a taste of fresh chili and vinegar ) and the price was around US$1.

I think that's the problem in making so-called 'authentic' kebab. This is just a kind of global stuff with many variations. If the product cater for homesick souls, some freaky souls will surely be upset not only with a Danish variation, but with any style never available in his life.

[chrix]

What do you mean by freakish souls being upset with Danish kebab? Döner kebab is originally from the Near East, and if I go abroad and see a kebab stall that calls itself KEBAB and not anything else, I expect to get something at least similar to the Near Eastern variety.

I've eaten Döner Kebab in Asia, and the stall was fortunately run by Turkish people and it was all original

But as long as you don't call your shop "Turkish/Near East kebab" but "International Kebab" or whatever, I don't think any of the "freaks" would mind...

[mcgau]

if I were gonna make one, i'd love to call it "American" kebab and serve it in a diner and the wall is hanged with a lot of vintage paintings and posters. The name Danish kebab or Scandinavian kebab looks cool too, although I don't know what it is.

In fact, when i think of doing business in China, I won't really go for expats. I mean I need western customers for attracting local people, but it's mainly for local people.

[adrianlondon]

If you're going to go with American style, better to open a diner and serve decent burgers, hot dogs, fries and onion rings. We go to Ed's Diner in central London regularly. It's simple food cooked well and they must make a decent profit.

Oh, and their peanut butter malt shake is fantastic.

[mcgau]

I really made a few beef patties at my friend's shop today and we calculated the cost of it. Because we thought of making it too.

The cost of a patty:

125g beef = RMB4-5

burger bun = RMB1 , not really nice one

Cheese = RMB2 per slice

egg, vegetable, dressing and seasoning may cost another RMB1-1.5

The very basic cost is RMB9.5. More if we count the cost of labor, rental payment, town gas and taxation.

Let's make it simple. If I set the profit margin to be 125% (based solely on the cost of ingredients used, so the actual margin is lesser), the burger will have to be sold at RMB20.

Pricing is a difficult part. I know Chinese is okay to pay a lot on burger in KFC , McDonald's or possibly Dico's. However most local burger shops can only set their price at around RMB4-8 only, I just don't know if they're willing to pay more for a better burger.

In Kunming, some shops do sell burgers at fairly high price ( >RMB30). They either run out of business, or they are actually a pub or a cafe that enjoys big enough profit margin from their beverages. Burger is just a side dish and they don't care if people buy it or not. This is a disaster for a burger shop.