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| FROM Cambridge Admissions Blog: China’s service companies |
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Last week, the Cambridge Judge Business School took another step to deepen its engagement in China when the Director of the Business School, Christoph Loch, launched the China Advisory Council at the Sanya forum in Hainan. Its members include Dame Sandra Dawson, one of the former Directors of the School, and several luminaries of Chinese business. What received less attention was the launch of a research study on the competitiveness of China’s SMEs. The faculty at CJBS have done extensive research already on this topic, in particular, Peter Williamson’s books on China and Eden Yin also wrote an article about how Chinese companies, some of them SMEs, had developed new methods of R&D. While I don’t know the details of the research study, my recent trip to Shanghai to meet prospective candidates did give me some insights into how some Chinese service-sector SMEs are positioning themselves for the global stage. I am not an academic but I suspect that when you mention Chinese SMEs, most people have a mental map of manufacturing companies. But what I saw in my brief stay in Shanghai is that a handful of service-oriented SMEs were exploring different types of service innovation. Some of these innovations were new to China, but a staple feature in the West, while some were brand new. I should say upfront that my examples are both food-related because that’s the easiest to experience as a tourist on a two-day turnaround. The first example was 大董 or DaDong. A friend of mine treated me to dinner at the first branch of this famous Peking duck restaurant outside its native Beijing. I had eaten at one of the Beijing restaurants before where the food was amazing but the surroundings were, if I am being polite, dingy. Then again, being from Asia, I had always thought it odd that my friends from Europe placed so much emphasis on the ambience of a restaurant and not the quality of the food. What struck me about DaDong in Shanghai was the ambience and presentation of the food would not have been out of place at a top-end restaurant in London or Paris. All the dishes were beautifully put together and the quality was still top-notch. Then there was a video that was played on repeat that showed the head chef sourcing all the ingredients, whether it be fishing for fresh crabs or harvesting fresh chestnuts. It was beautifully shot to the extent that I almost called it food porn. Now to most readers, this might not sound very revolutionary. But this was the first time I had observed this emphasis on the sourcing of food in restaurants in China. And this was not the only example. In one of the food courts near my hotel, I saw a wonton stall with a picture of verdant landscapes and the explanation that all their roast ducks came from farms in Guangxi where ducks had wide open spaces to grow. I have no doubt that this movement towards educating consumers about the sources of ingredients was partly due to the many food scares in China and I am also under no illusions that some of what I read might not be strictly true. But it also struck me that this also meant a convergence towards the more global sensitivity about sourcing of food, which meant that if and when the likes of DaDong were to expand outside China, they would have a better chance of success. The second example was 海底捞火锅 (Hai Di Lao hotpot). By sheer chance, I found a branch of this famous hotpot chain just outside my hotel and decided to have dinner there. I was bowled over by their customer service. It starts from the waiting area which many restaurants try to minimise thinking that this was a cost centre and doesn’t generate revenue. Instead, HaiDiLao had a huge waiting area with free wifi, tables for customers to have drinks, snack on peanuts and play board games while waiting. And unless you turned up at 5pm like I did, you would be looking at a wait of at least 45 minutes. For those of you who have not tried hotpot before, it can be a messy affair because the boiling soup at your table could create some splatter. HaiDiLao has thought of everything to make your experience splatter-free. They give you bibs to cover your clothes, and even little ziplock bags for your mobile phone, because in China everyone has their mobiles on the table when they eat to take selfies, food photos, or just reply to weibo, wechat etc. They also gave me free lens wipes for my glasses. And I am not even going to talk about their good food with an almost encylopaedic collection of sauces and condiments, or the free flow of home-made soya bean drink. While much of the customer service at HaiDiLao could be put down to protocols or SOPs, I found everyone of their staff to be extremely helpful and knowledgeable. Again, this might not sound surprising but I am used to eating in Chinese restaurants where there is a strict hierarchy among the waiting staff —- only certain people are allowed to take orders, only one person is allowed to collect payment etc. To see everyone at HaiDiLao pitch in on all aspects of the customer service experience was amazing. The challenge for places such as DaDong and HaiDiLao will of course be how to expand their business. Unlike their manufacturing cousins, service companies have to ensure consistent service delivered through that most unpredictable of resources, humans. And what works in one city in China might flounder in another city, let alone another country, where the attitudes of the staff and customer tastes and tolerances might be very different. It calls on a very different set of leadership and strategic skills and I am very interested to see how Chinese companies manage this part of the global expansion. Because while China will see lots of revenue and possibly success through its manufacturing expansion, it will be the service-related globalisation that will educate people outside China about China’s culture and its people. In this respect, I am keen to see how HaDiLao’s first restaurant outside China performs. In a sign that HaiDiLao management already understands the importance of localisation and signalling, they have priced their hotpot in Singapore significantly higher than what I saw in Shanghai. Make of that what you will. |
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Hi Guest,
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