Just desserts in business

By Jonny Clement Brown Source:Global Times Published: 2013-1-5 20:36:00


An employee serves guests at the opening of Chaoyang district gelato parlor Vai Milano on December 18.
An employee serves guests at the opening of Chaoyang district gelato parlor Vai Milano on December 18. 
Business partners and guests make a toast at the parlor. Photos: Courtesy of Robert Kadhim
Business partners and guests make a toast at the parlor. Photos: Courtesy of Robert Kadhim

Gelato is a dessert that caters to all taste buds, coming in countless chocolate, nut and fruit varieties. But there's one flavor Robert Kadhim, managing director of Beijing's newest gelato parlor Vai Milano, is struggling to sink his sweet tooth in.

"What do you think of the green tea? It's not really my thing, but if locals like it that's fine by me," he says in between licks of the ice cream in question at his store, which opened last month at the Solana Mall in Chaoyang district.

Kadhim tries the green tea again, visibly annoyed that his potential bestseller to Chinese customers is failing to win over his picky Western palette.

"It's possibly a touch too strong," he decides. "Have you tried the sesame or yoghurt flavors yet? They're my favorite."

The Londoner has an impressive culinary CV, having formerly worked for British celebrity chef Jamie Oliver and served as personal chef to German supermodel Claudia Schiffer.

But his biggest challenge has been launching his first business in China, far from the familiar surrounds of his native England.

Kadhim, 30, relocated to Beijing about a year ago. His business partners - Julian Seydoux from France and Yang Jin from Northwest China's Ningxia Hui Autonomous Region - are both graduates of the London Business School with investment banking backgrounds.

The trio represents the newest crop of entrepreneurs, both from China and abroad, hoping to take advantage of the fast-growing consumer class within the capital.

Teaming up with Chinese

For any foreigner, part of the excitement of starting a business in China is the abundant opportunities the world's No.2 economy offers.

People's disposable incomes are growing and government policies that aim to spur domestically driven economic growth all make for a favorable environment.

But with great opportunity comes great challenges and risk, especially in a country where language and customs can sometimes mean the difference between going boom or bust. Even for the savviest business owners, China is nothing short of a daunting market.

Kadhim, who previously worked as a hedge fund trader, described setting up shop in China as stepping into the proverbial "tiger's den."

"We'd heard so many stories [and] read many books on business, culture and etiquette in China. We had many contacts in Asia with firsthand experience, so we felt as prepared as we could be," he noted.

Kadhim describes Vai Milano's management team as "multicultural," saying the addition of Yang as a Chinese helps "guide us through the intricacies of consumerism in China."

"Without [Yang] we wouldn't have got where we are now," he asserts, noting she has helped him learn about the intricacies of guanxi (personal contacts) and other Chinese customs vital for business.

The 'lone laowai' route

Tim Hill, 23, is planning to open his own gym in Beijing. However, unlike Kadhim and his team, the native of Birmingham in the UK has decided to go it alone without a Chinese business partner.

"Basically, the whole process is very slow if you don't have a Chinese partner," said Hill, who currently works as an English teacher.

"But having a Chinese partner is risky because they can kick you out whenever they want. Laws don't support you as a foreigner."

Being the sole proprietor means Hill's future business will be a wholly foreign-owned enterprise (WFOE), a common investment vehicle for businesses based on the Chinese mainland.

Having WFOE certification will allow Hill to sponsor his own visa and permit him to operate his business without the involvement of a Chinese investor.

Nevertheless, there are still red tape-related obstacles awaiting entrepreneurs such as Hill.

He plans to go to Hong Kong to set up his business legally before he obtains a WFOE in Beijing, but he insists it will be worth the hassle because it will offer him "control" of his own business.

Hill has already picked a location in Beijing for his gym, established contacts with suppliers and has everything he needs to start the business.

There is just one gray area preventing him from taking the plunge: the law.

"The law is unclear. For example, we [foreign business owners] don't know how to report our earnings. The frustration for me is that there doesn't seem to be a set of laws that my lawyers can follow methodically," he said, noting his lawyers have been helping him trawl through a legal minefield for six months. "They are always saying to me that they'll find out and get back to me."

Patience and passion

Having patience in areas of cross-cultural misunderstanding is a virtue every foreign entrepreneur must learn to acquire if their business is to prosper, Kadhim advises.

"There was one incident where I needed to order the first batch of fresh watermelons," he recalled. "We had the supplier and all we needed to do was call and place our order."

But this process took over an hour, as Vai Miliano's Chinese staff entered deep discussion over how many stripes each watermelon should have. "In the UK, it would have taken five seconds to [place the order]," Kadhim said.

American Michael Wester, general manager of media company True Run Media, which produces English-language magazines The Beijinger, BeijingKids and the Immersion Guides series of guidebooks, says one thing foreigners looking to start up a business in Beijing should understand is that the copying of ideas is considered an art.

Wester, who is also current president of the Beijing chapter of the Global Entrepreneurs' Organization, concludes that China's regulations tend to be protectionist in ensuring that domestic businesses flourish and have the upper hand against their foreign competitors.

"If you don't have the drive or passion to fight that uphill battle, you ought to reconsider your entrepreneurial future in China," he said.

Posted in: Metro Beijing

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