Lessons of a China Pizza Chain
In 1997, Anthony Le Corre opened a restaurant in the southwestern Chinese city of Kunming, selling pizzas for between $2.50 and $5. He got distracted by other projects and sold it. In 1999, he began selling pizzas for the same price in Chongqing, in China's heartland. His pizzeria closed after one year.
In 2001, he opened a restaurant in Shanghai, one of China's wealthiest cities. This time he is selling pizzas for as low as 10 yuan -- the equivalent of $1.20 -- undercutting an army of rivals whose cheapest pies sell for triple that price. Mr. Le Corre has three pizza restaurants, three pizza-delivery centers, and offshoots in the bakery and catering businesses. He says his company, Picolo Foodstuffs (Shanghai) Co. Ltd., is breaking even.
"The value of this company is that three years later, it is still existing, it still has customers," says Mr. Le Corre, an effusive 31-year-old Frenchman in black jeans and a crew cut who zips around town on a dark-green Italian scooter.
It's too early to say whether Picolo's "Hello Pizza" small chain will be successful. But its unusual business plan -- undercut everyone in town, pare costs to the bone, and forsake the premium market loved by most multinationals -- carries lessons for all those seeking to win the hearts, and hard-earned money, of China's consumers.
There is little room for error anymore. The fight to sell everything from hamburgers to hair-care products to consumers, particularly 400 million urban residents, makes China the most competitive market in the world, many say. Huge multinational companies are here, with sales forces and advertising budgets to match. Domestic players have achieved tremendous marketing and distribution reach at lower cost. Companies are increasingly finding themselves sandwiched between the rising costs of promotion, ads and staff salaries on one side, and razor-thin profit margins on the other amid continuing price wars.
"The competition has intensified, and this situation will continue," says Sherry Ding, a principal at consultancy A.T. Kearney in Shanghai who focuses on the consumer goods and retail sectors. She says the China market has a bewildering number of players, yet enough space for many to get a start. "The market is very big, everyone starts from different areas, so they have room to grow in the beginning" before encountering fierce competition later on, she says.
Foreign companies are also questioning the wisdom of sticking to the premium segments that lured them in the early days. In the 1980s and 1990s, many investors entering China focused on the high-end market, selling everything from alcohol to cosmetics at double or more the prices of domestic brands. Many found themselves competing against each other in a market that proved to be tinier than advertised -- most prominently in beer, which led many breweries to make high-profile exits from China. Companies that stuck it out faced a choice: continue in the high-end market, which has fatter profit margins but may be untenably small, or go for the middle -- and tough it out fighting domestic players whose costs will always be lower.
Mr. Le Corre came to China in 1995, working as an accountant at a Swiss water company to complete his military service. Two years later, he opened the Kunming pizza restaurant. But Mr. Le Corre says he was juggling too many jobs, from representing French companies to working at the World Horticultural Expo held in Kunming, and decided to sell the restaurant. The Frenchman's second restaurant, in Chongqing, didn't stand out from the crowd because it sold standard pizzas at the standard prices. Business was bad, so he read a lot. One book he read was a history of McDonald's Corp., which bested rival burger chains by cutting prices while offering consistent quality and service. It was a revelation. "I had a vision," says Mr. Le Corre. "God came to me and said, 'Anthony, you will make 10 [yuan] pizzas.' "
With $500,000 in seed capital from private European investors, he set up a company in Shanghai to sell pizza that was super-cheap but of consistent quality. The idea was to turn pizza, seen as a fancy Western product, into something inexpensive enough to enjoy in daily life. "In China, quality is the opposite of cheap," says Mr. Le Corre. "The secret of my business is not what I put in the pizza. The secret is consistency, providing the same thing from Monday to Sunday." That effort begins in a warren of fluorescent-lit rooms, redolent of yeast, on the ground floor of an apartment building in Shanghai's Gubei district. At 9 p.m. on a recent night, a woman wearing a gauze cap and a surgical mask stands at a big metal table, chopping green peppers and scooping portions into tiny Ziploc bags. Each bag is weighed to make sure it contains exactly 30 grams of green peppers. Next to her are bags with single-pizza portions of chopped eggplant, onions, sausage and bacon. She begins packing cardboard boxes with lettuce, carrots and a small bag of salad dressing each. In the next room, another woman rolls out pizza crusts -- one after another, each resembling a giant cookie, each exactly the same. The goods are delivered to the restaurants in the morning, after the night shift gets off work.
By turning pizza making into a business of interchangeable parts, Hello Pizza has managed to minimize costs. During a weekday lunch hour at one of its restaurants, the narrow, 40-square-meter space with orange-tile floors and about a dozen light wood tables is full. An office worker typing on his laptop computer sits in front; a father and son, heads bent, eat pizzas without speaking; two women in floral-print tops eat together, and a young couple sit in back.
A staff of only four workers can handle the space that seats up to 25 customers. In a tiny kitchen in back, a young woman assembles salads and other side dishes onto serving plates. At a glassed-in cubicle in the middle of the restaurant, another woman takes out a pre-made pizza crust, spreads one Ziploc bag's worth of tomato sauce on it, another of shredded cheese, sprinkles a mix of toppings from separate bags, then pops the finished product into an oven behind her. A third woman works the cash register and another serves. In a small room behind the kitchen, a team of young men sits waiting to deliver goods on bright-yellow electric bicycles; deliveries account for more than half of sales.
The setup eliminates the guesswork, inconsistency and waste associated with preparing dishes on-premises as most restaurants do. It also allows the company to have a small staff with only limited skills that are easily taught -- key in a market where job-hopping is common. The company hires workers from neighboring provinces -- like Anhui, Zhejiang and Jiangsu -- rather than Shanghai. "They are hungry for life," Mr. Le Corre says of the migrants. "They have to go back home with something, so they work very hard." Workers make between $140 and $180 a month. Of 50 employees at the restaurants and the factory, there's only one expatriate, a French baker.
Even for cost-conscious Chinese consumers, price alone isn't enough of a draw. Initially, Hello Pizza offered only five types of pizza, each for $1.20. In 2002, Mr. Le Corre closed and then reopened the restaurants with a new design and a new menu featuring 20 different types of pizza, at prices ranging from $1.20 to $4.20 apiece. "People want not only low price, they also want choice," he says. The menu offers a variety of flavors to cater to Chinese tastes. One new offering is curry chicken pizza; other toppings include cherries and Thousand Island salad dressing, which might turn the stomachs of many Westerners but are well liked by most Chinese. Items change often to entice fickle urbanites hungry for new things. "Don't be afraid to kill off old products," Mr. Le Corre says. "Even if a product sells well, people will get sick of it."
In theory, Hello Pizza's business model lends itself to economies of scale: Once the factory is set up, it's not much harder to chop green peppers and shred cheese for 30 restaurants than just three. In reality, the business is still small; the company's sales in December were $72,000, giving it annual revenue, on that basis, of less than $1 million. About half of company revenue comes from the pizza restaurants, one-third from supplying bread and pastry products to hotels and caterers, and the rest from a bakery and occasional catering events. Mr. Le Corre is looking to double the total number of units -- encompassing restaurants, delivery centers and bakeries -- to 14 by September.
在中国经营比萨饼店的经验教训
1997年，安东尼?科雷(Anthony Le Corre)在中国西南部城市昆明开了一家比萨饼店，每份比萨售价在2.50-5.0美元之间。因为被其他事分了心，他卖掉了这家店。1999年，他又在中国腹地重镇重庆开了一家比萨饼店，供应同样价格的比萨，但在一年后关张。
2001年，他在中国最富余的城市上海重操旧业。这次他将售价降至最低人民币10元，约合1.20美元。而那些竞争对手们最便宜的比萨也是这个价位的三倍。他现在拥有三家比萨饼店，三个外卖中心，还经营著一些糕点烘烤等其他配餐业务。这家由他起名为Picolo Foodstuffs (Shanghai) Co. Ltd.的公司即将实现盈亏平衡。
31岁的法国人科雷热情洋溢。他理了个小平头，身穿一套黑色牛仔服，脚踩墨绿色意大利式样的滑板车，穿梭在这个繁华都市之中。他说，这家公司的价值就在于持续经营了三年之久，仍然能够吸引顾客光顾。
他的小型比萨饼连锁店统一命名为Hello Pizza，现在预言它能否成功还为时尚早。但它有一个不同寻常的商业计划，就是定价低于城内任何同行、将成本降至最低、放弃多数跨国企业热衷的高端市场。对所有希望吸引中国消费者掏出血汗钱的人来说，这些可都是宝贵的经验。
市场已容不得再有些许闪失。中国消费市场广阔，城市居民就有4亿之众。商家们各显其能在此兜售各种商品，从汉堡到护发产品无所不包。许多人都说，中国已经成为全世界竞争最为激烈的市场了。凭借著强大的销售队伍和宽裕的广告预算，大型跨国公司在此占据著一席之地；而国内公司则以更低的成本将营销和分销渠道成功地延伸至各个地区。越来越多的公司发现，在促销及广告成本和员工薪资不断高涨的同时，持久的价格战却使得利润越来越薄。
咨询公司科尔尼(A.T. Kearney)驻上海的主管丁海英(Sherry Ding)主要追踪消费品和零售业的发展。她说，竞争不断加剧的势头还会持续下去。中国市场虽然参与者众多，但仍有足够空间开创新企业。她还说，中国市场广阔，不同的人能从不同的角度创办企业，所以在初期有很大的发展空间，逐步壮大以后才会遭遇激烈的竞争。
利润丰厚的高端市场是吸引众多外国公司的最初诱因，但现在他们也对这一目标提出了质疑。上世纪八十年代和九十年代，许多海外投资者瞄准的都是国内的高端市场，他们出售的酒类和化妆品的价格都是国内品牌的两倍以上。不久他们就发现相互争夺的市场要比预想中小很多，因此不少企业纷纷高调退出中国市场，最显著的例子就是啤酒业。而坚守在此的公司则面临著这样一个选择：继续开拓高端市场，还是进入普通市场。前者利润丰厚，但难免逐步缩小；而后者就要与低成本的国内公司面对面展开激烈竞争。
科雷1995年作为瑞士一家水厂的会计来到中国，同时服完瑞士兵役。两年后他在昆明开了一家比萨饼店。但他说当时身兼数职，还要代表一家法国公司参加昆明主办的世界园艺博览会(World Horticultural Expo)，因此决定卖掉这家店。他的第二家比萨饼店开在重庆，但未能吸引众多客户光临，原因是他按照标准价格出售标准风味的比萨。生意很不好，但他也有时间读了很多书。其中一本讲述了麦当劳(McDonald's Corp.)的发展历程，其制胜法宝就是以大大低于同行的价格提供质量和服务均保持稳定的产品。这是一个重要的启示。科雷说，他有一个幻觉，就像上帝降临并对他说，要按人民币10元的价格来卖比萨。
他从一家欧洲私人投资机构得到了50万美元的种子资金，在上海创办了公司，供应质量稳定而价格非常低廉的比萨。他的想法是，把比萨这种中国人眼中时髦的西方食品变成价格低廉的日常食品。他说，在中国，高质量通常是低价格的反义词。他的秘方并不是比萨，而是从周一到周日提供品质高度稳定的比萨。最初的店面是在上海古北区一桩公寓楼的底层，一个狭小拥挤的空间，点缀了闪亮的萤光灯，充斥著发酵粉的味道。以最近一天晚上九点为例。一位女工戴著纱帽和医用口罩，在一个大大的金属台旁切著青椒，然后把它们装进Ziploc小塑料袋里。每袋青椒都要过秤，确保每袋装有不多不少正好30克青椒。她旁边的袋子里也都是单独包装的比萨配料：切好的茄子、洋葱、香肠和咸肉。然后她在每个纸盒里装好生菜、胡萝卜和一小袋沙拉酱。隔壁房间里，另一位女工正在□制比萨饼坯，几乎个个相同，看上去都像大蛋糕。夜班收工后，这些东西都会一早送到各个店面。
通过这种办法，Hello Pizza已经尽力使成本降至最低。在一个普通工作日的午餐时间，Hello Pizza一个不到40平方米的小小连锁店里人满为患。橙色地砖上十几套木质桌椅全部满座。前面的这位办公室职员在他的笔记本电脑上敲敲打打；旁边一对父子埋头大吃；那边的两位女士正在互相品尝对方的比萨，还有一对年轻的情侣安静地坐在后面。
这样一个最多坐满25位顾客的小店只要4名员工就够了。一名年轻的女服务员在后面的小厨房里往餐盘上摆放沙拉和其他配菜；餐厅正中一个玻璃隔开的小空间里，另一位女服务员取出预制好的比萨饼坯，挤出一袋番茄酱，倒出一袋碎干酪，把其他几个袋子里的配料拌匀撒上，然后砰地一声放进身后的烤箱。第三位女服务员收银，还有一位上餐。厨房后面还有一个小房间，几位年轻人正在等候外卖下单，他们用这些明黄色电动自行车送出的外卖占餐厅销售额的一半以上。 这种安排消除了顾客的疑虑，同时保障了食品质量的稳定，还可以避免浪费。而这些缺点在其他多数餐厅普遍存在。此外，只需少数员工，甚至无需他们具备多少经验（这些程序很容易学会），公司就可以展开经营了。在员工经常跳槽的环境下，这一点至关重要。公司从附近省份招募员工，例如安徽、浙江和江苏，而不是在上海本地招聘。科雷说，民工更急于谋生。他们回家时不能两手空空，所以工作起来就更卖力。工人月工资约为140-180美元。科雷一共招聘了50名员工，只有一位外籍人士，就是那位法国面包师。
即便是对价格颇为敏感的中国消费者，仅有价格优势也还是不够的。Hello Pizza最初只提供5种口味的比萨，每份售价1.20美元。2002年科雷关掉店铺重装开业后提供了一份20种口味的新菜单，价格从1.20美元到4.20美元不等。他说，顾客想要的并不仅仅是廉价，他们还希望能有更多选择。他还提供各种迎合中国顾客口味的比萨，其中有一款咖喱鸡风味的比萨，其他的配料还包括樱桃和千岛酱等。许多西方人也许不喜欢这些佐料，但多数中国人都很喜欢。Hello Pizza经常调整比萨的口味和种类，吸引那些热衷于追求新事物的都市人。科雷说，即使是畅销食品，人们也终究有一天会感到厌倦的。 从理论上来说，Hello Pizza的商业模式使其获得了规模经济效益。生产厂一旦建立起来，那么给30家餐厅切青椒和干酪并不比给3家餐厅切起来难多少。而实际上，科雷的业务规模还很小。该公司去年12月的销售额为72,000美元，以此计算的年销售额也不到100万美元。该公司大约半数收入都来自于比萨饼店，向酒店和配餐机构供应面包等糕点的收入占三分之一，其余来自一家面包房和偶尔的配餐服务。科雷预计，到今年9月份，该公司包括餐厅、外卖中心和面包房在内所有分支的数量可增加一倍。
