The entrepreneur's haven

By Zhong Nan, Zhou Lanxu, Ren Xiaojin,Chen Meiling, Wang Ying in Shanghai, Jing Shuiyu, Liu Yukun and Liu Zhihua | China Daily
Updated: Feb 11, 2019

Deepening reform and opening-up, innovative tech ecosystem, and astonishing success of domestic startups inspire foreigners in China to unleash their entrepreneurial energies

Editor's Note: There is an old Chinese saying that a coward can't be an entrepreneur. Potential big rewards go hand in hand with risk. If you try and fail, at least you will have learnt something. As it transpires, many foreigners in China who started up are not only learning but earning rich experiences and fat profits too. They, like their Chinese counterparts, would testify that the People's Republic of China has come a long way since its founding 70 years back, and turned a corner over the last 40 years, on the back of reform and opening-up. Business environment has improved, and so has the ease of doing business in China, thanks in no small measure to the advent of cutting-edge technologies developed domestically. Your newspaper records 11 success stories of foreigner-founded businesses in China, spanning a range of sectors or segments: manufacturing, public relations, outdoor products, beer, fitness, food, catering, human resources and tea. Based on exclusive interviews conducted by China Daily's reporters, these real-life stories capture the essence of China's technology juggernaut - no matter which industry you choose to excel in, China is the place to be in, if you are a global entrepreneur. This special package is as much a tribute to the gutsy foreign business people succeeding in China as it is a wake-up call for the hesitant others to boldly take the entrepreneurial plunge.

Matthew Allison, founder of Space Yoga, which has branches in Beijing and Shanghai. [Photo provided to China Daily]

New, fit model for the millennials

Matthew Allison believes that by creating a "third place" that can combine fitness and entertainment, millennials, or the younger generation, would be able to lead healthier, positive and socially vibrant lives.

So he went ahead and created Space, an active-lifestyle firm that operates premium boutique fitness studios.

Many young people, he said, face the challenge of balancing a demanding work schedule with healthy lifestyles. "Howard Schultz aimed to make Starbucks the 'third place' in people's lives (the first place being home and the second workplace)."

In the 1980s, Allison found that many young people in China were seeking their "third place" in public spaces to stay healthy and fit.

He came to China in 1997 from the United States and launched Sony Music's operations. He then decided to focus on health and wellness. He began by setting up yoga studios. He founded Space Yoga in 2005. His vision was to build fitness centers but with music as a central theme.

Space, then known as SpaceCycle, launched its first community in Beijing in 2016. Since then, it has opened three new locations across Shanghai and Beijing. It is now working with Alibaba Group, the lead investor in the B round of funding, to expand further and has found the business environment in China encouraging.

"The wellness market in China is developing faster than anywhere else in the world. There are a growing number of millennials who are focused on leading healthier and more positive lives.

"They are moving into cities with the challenge of how to do that in exciting, meaningful and social ways. Therefore, we are building a new business model in China that is, in many ways, ahead of what is happening in the US or Europe and we're building it for very connected millennials," said Allison.

"As we go forward, there are many other Chinese cities that I am interested to explore. I've always loved Chengdu and am fascinated by what's happening in Shenzhen," he said.

Dan Siekman, co-founder of Dali Bar Natural Energy Foods in Kunming, Yunnan province. [Photo provided to China Daily]

Feeding energy to outdoor activities

Unlike many foreigners who prefer living and working in China's top-tier cities so they could be closer to businesses, art shows and global food options, Dan Siekman, from the United States, chose Kunming, Yunnan province, Southwest China.

There, he found a sweet spot that balances his life and work perfectly.

The 35-year-old is one of the three American owners of Dali Bar Natural Energy Foods, a Kunming-based company that produces premium food products for sports and outdoor activity lovers.

He said culturally, geographically and ecologically, Yunnan is perhaps China's most diverse province. Its fine weather generates plenty of opportunities for recreational cycling, hiking, rock climbing and other outdoor activities.

"Overall, my perception is that China is rapidly turning into a more mature economy. This means there are fewer opportunities to introduce entirely new types of goods and services," said Siekman.

The costs of starting a business, as well as the costs of marketing and promotion, have also risen greatly as wages have risen. There is more competition from more companies within each industry, he said.

With China's business environment maturing and amid continued government reforms, foreign companies in China are benefiting through joint ventures and wholly foreign-owned enterprises.

As China's technology industry is unveiling world-leading new products, and as consumers grow more sophisticated in their preferences and understanding of everyday products and services, the country offers a major contrast to the US. Things can change very quickly and companies of all sizes must be ready to adapt quickly to new trends and adopt new tools, Siekman said.

For example, China had essentially no e-commerce 20 years ago. Now, China has become home to many e-commerce giants. There are thousands of potential channels to sell through.

"Because we are a food seller, we always assumed that brick-and-mortar retail would be our strongest driver of sales. But, in fact, online sales are growing at a much faster rate than offline," said Siekman.

Martin Papp, founder of Papp's Tea, a tea business in Beijing. [Photo provided to China Daily]

Reinventing tea for Chinese palate

When a typical Chinese customer walks into Martin Papp's store-it has well-arranged, colorful canisters covering the walls, and glass jars filled with unknown herb blends in the middle-he might wonder whether the store really sells a commodity with thousands of years of history in China: tea.

"When I came to China, I found almost none of my friends of my age really wanted to take me to drink tea," said Papp, the 32-year-old US citizen who started his tea business Papp's Tea in Beijing four years ago. "That was when I saw the opportunity in China to really show that tea can also be very fresh, new and exciting," he said.

Traditionally, Chinese people drink tea hot, which is usually made by a single type of tea leaves. At Papp's Tea, however, the brew could be hot or iced, pure or blended, and even sparkling-that is, a fermented, carbonated tea drink called Kombucha.

By introducing various innovations of tea inspired by customs in different cultures to Chinese customers, Papp is trying to "reinvent tea" in China and change the old-fashioned image of tea among many young people here.

Last year, Papp's Tea became profitable and doubled its revenue compared with 2017. Papp is now building up his own Kombucha factory and plans to expand online business-to-consumer or B2C distribution channels in 2019.

"This is just the beginning," Papp said, adding his ambition is to make Papp's Tea the premium brand for healthy, all-natural tea in China.

The Chinese market is a great place to innovate, Papp said, as customers are "hungry" for new products. "That can be very different from some other countries."

He divides his time between Beijing and Los Angeles. Papp enjoys whatever the two different cultures bring to him. After all, it is diversity that fosters innovation, something Papp is always dedicated to.

Jim Fields, founder of a digital content provider Relay Video in Shenzhen, Guangdong province. [Photo provided to China Daily]

Custom corporate videos spin money

Many may mistake him for a gym coach given his huge frame and a big-size gym bag he carries, but Jim Fields, 30, is the founder of a digital content provider Relay Video.

When you start interacting with him, you'd find Fields is a down-to-earth person, who constantly talks about Chinese memes in fluent mandarin.

"If you are looking for a foreigner owning a startup in China, you have to interview Jim," said Wang Bin, founder of 10Fund, one of the investors in Relay, who referred Fields to this reporter.

Fields, a US citizen, came to China 10 years ago. "He is a living Chinese dictionary and he can totally nail a Chinese stand-up comedy," Wang said of Fields.

Fields' deep understanding of Chinese culture gives him an advantage in his career. His firm Relay provides customized video production services to Chinese companies for their overseas roadshows.

"Just like most Westerners don't really know the character of the Asian market inside out, most Chinese companies going global don't really know the markets or the consumers abroad. So they don't know how to communicate with them," said Fields. So, when such companies expand outside China, they look for customized promotional videos. That's where Relay comes in to the picture.

For example, a typical Chinese company's promotional video would apply a bold use of gold and red colors with an inspirational male mid-tone voice in the background, which usually fails to sell the idea to Westerners as their sense of aesthetics is different.

Three years on, Relay boasts major clients, including big-name labels such as Baidu and Alibaba, despite having a small talented team of 15.

"The bigger the company is, the bigger the pressure," Fields said and laughed. Asked if Relay would hire more to expand, he said: "I'm having trouble sleeping already."

Sam Waldo, co-founder of three-year-old eyewear brand Mantra in Beijing. [Photo provided to China Daily]

'Nothing's easy, everything's possible' in the country

Sam Waldo, co-founder of three-year-old eyewear brand Mantra, said he sees great potential in the Chinese market as more people have grown interest in products with fashionable design and unique social value.

After graduating from Colombia University in 2010, Waldo spent two years teaching English in Yongbao town, Lincang, Southwest China's Yunnan province. He found many children had vision problems but few had proper eyewear.

To figure out a sustainable way of helping them, he founded Mantra in Beijing in 2016 with a promise to donate one pair of glasses to children with poor eyesight on sale of a pair of sunglasses.

In its products, Mantra adopted elements of Yunnan, such as terraced fields, headgear and silver ornaments in decoration and design, which attracted many customers, mainly women aged 25 to 35, who favor fashion and are willing to join nonprofit events.

Though Waldo was sometimes confused by the rules and policies in the local market at the beginning, he said he is happy to see the local government has been working on policies to support social enterprises.

"Without reform and opening-up, none of this would have happened. We see great opportunities in the Chinese market in the following decade," he said, adding the company plans to open offline stores in Beijing and increase production.

Waldo operated out of a basement office for about eight months. He set up stalls on busy streets to promote sales. Now, he has got a better office in the Central Business District of Beijing and is invited to forums and to deliver speeches at business events from time to time.

He said what he achieved in China is less likely to happen back in the United States, his home country, because he has been offered many opportunities here to transform his ideas into reality.

"In China, nothing is easy but everything is possible. The atmosphere, the energy and the possibilities here are really unlike anything that I experienced."

About 10 to 20 percent of its annual revenue is donated to support Education In Sight, a nonprofit organization, also co-established by Waldo, which has delivered 37,750 glasses to students in 686 schools in remote and mountainous regions of Yunnan province.

Lars Traaholt Vagnes, co-founder of Nusic, an AI-enabled virtual DJ platform in Shanghai. [Photo provided to China Daily]

Nusic to the ears of startup founders

Norwegian Lars Traaholt Vagnes, 24, has been busy of late organizing a music competition that tries to unearth the best original music creator around the world. His aim is to popularize his team's music platform Nusic, an AI-enabled virtual DJ platform, through the competition.

According to Vagnes, who graduated last summer from Shanghai Jiao Tong University with computer engineering as his major, the competition aims to look for innovation and creativity in a musician's approach rather than technique.

Vagnes co-founded a startup a year ago, which allows people with musical creativity to display their talent. The startup currently has its China head office in Shanghai, and has received $250,000 in investment from foreign investors so far.

Musicians in China find it difficult to make money as the market is still maturing and improving. "I hope the platform will encourage creative and innovative music," said Vagnes.

Inspired by people around him who are passionate in doing their own business, Vagnes decided to create his own business in the vast China market.

After meeting his business partner Adam Place from Bristol of England, he decided to develop a platform jointly with his other partners for using AI and allowing music creators to monetize their work.

Currently, about 20 music creators from China and overseas have uploaded their works on to the platform. Their number is increasing at a weekly growth rate of 15 percent.

The experience of being an entrepreneur is fun, as one can "get to follow your vision and be passionate," said Vagnes.

Many people too are planning to start a business, and Shanghai is one of the ideal places to realize their dreams as the city is cosmopolitan, has a strong Chinese component, and boasts international talent, he said.

"Shanghai, even the whole of China, is full of energy and opportunity … I'm inspired by people here who are doing big projects, and I want to be one of them," said Vagnes.

Felix Wendlandt, founder of Brander Urstoff, a German craft beer variety made in China. [Photo provided to China Daily]

Crafting a novel beer culture in mainland

Felix Wendlandt believes some great qualities or traits distinguish foreigners who own businesses in China: "resilience" and an ability to adapt quickly to a fast-changing market environment.

Even though the craft beer industry is very competitive not only in Shanghai but across China, many foreign craft beer brands are competing with local rivals to get in and grow.

The 31-year-old German citizen Wendlandt made a bold move in 2016 to start a company in Shanghai and launched Brander Urstoff, a German craft beer variety made in China with his business partner.

"The idea behind this move is that we discovered Chinese beer drinkers have developed a deep interest and broad knowledge about craft beer. They developed a sense for beer and its ingredients and are able to distinguish a bad brew from a good one, over the past years," said Wendlandt, an industrial engineer by education but now the general manager of Brander Urstoff.

The firm now supplies its products to over 250 restaurants, bars and hotels in 25 Chinese cities, thanks to the country's growing number of craft beer drinkers.

"This development leads to a tremendous market shift: consumers choose premium and craft beer over industrial beer-a real premiumization," he said. "This market shift triggers a decrease in the market size but parallelly to an essential increase in the quality of the consumed beer and thus, to a higher market value-Chinese consumers are willing to pay for quality."

Obviously, China did great over the past two decades with its reform and opening-up policies, he said.

Thousands of well-educated students graduate from universities, start to work with fast-growing, innovative Chinese companies or establish their own company each year.

Entrepreneurship is a huge thing among young Chinese, and they are very ambitious and creative.

"We started our company in a co-working space in Shanghai. It was amazing to see how many young Chinese started their own company and succeeded," said Wendlandt.

Chinese-American Song Shiwei, founder of Beijing Chilun Yichuang Technology Co Ltd. [Photo provided to China Daily]

Helping SMEs to digitalize operations

Tired of Silicon Valley life in 2012, Song Shiwei, then 24, gave up his high-paying job. He bought a one-way ticket to China, his motherland and place of birth, of which he had few memories, but knew for sure it was his destination to start an entrepreneurial adventure.

Not many things were hard for the Stanford University alumnus. After two initial attempts, Song founded Beijing Chilun Yichuang Technology Co Ltd, a technology solutions provider, in 2016. Investments were secured within just two months.

The startup's goal is to facilitate businesses in digital transformation. Given his natural advantages, the budding entrepreneur won several big clients like the US payments technology company Visa Inc and e-commerce giant Amazon.

But beyond those established companies, Song cared more about small and medium-sized enterprises. "Chinese SMEs, especially those in traditional industries, have urgent demand to digitalize their business processes," Song said.

As an example, his company built an intelligent system for Beijing Yuanjia Law Firm that gave lawyers easy access to clients' information and simplified their paper work. This system helped the law firm enhance its efficiency by almost 30 percent.

According to Song, the company's clients span more than a dozen industries, including many from the education, manufacturing, and medical sectors. In 2018, the company's revenue grew 50 percent year-on-year.

Because of this trailblazing growth curve, Song was selected for the Forbes "30 under 30" list in 2017.

"Coming back to China was not a crazy decision. The market has huge potential and opportunities to solve meaningful problems," Song said.

He said the Chinese business environment has consistently improved over the years. He hopes the government can continue to support and ease operating burdens on startups and streamline administration.

Noriko Shinohara, a Japanese national and owner of a restaurant chain with three outlets under two brands in central Beijing. [Photo provided to China Daily]

Food for good taste, big money and success

It only took four years for 29-year-old Noriko Shinohara, a Japanese national, to establish a restaurant chain with three outlets under two brands in central Beijing. She and her Irish boyfriend are now decorating a new Japanese Izakaya (restaurant) for launch this April.

"I opened (the two-outlet) Bottega (line) just after I finished my college study in China. There were a lot of voices saying I couldn't do it because I was a very young girl, had no experience, and came from another country," she said.

The first few years were anything but easy. "It's difficult dealing with the regulators, the landlords, customers, and employees. I even cut my hair and changed my makeup style because I wanted other people to take me seriously, for a real businesswoman who wants to achieve something instead of a college girl who was just thinking big."

The budget to open Bottega came largely from the profit of Shinohara's online store, which she has been running throughout her college days.

Located in Beijing's posh and busy lifestyle zone Sanlitun, Bottega's first restaurant outlet sports a post-modern decor, and serves traditional Italian food. Diners are impressed as much by the authentic cuisine-handmade pizza-as by the delicate designs on walls and furniture.

"My boyfriend and I are foodies and we love Italian cuisine," Shinohara said. "We also love traveling, architecture and arts … those are all the things you can get inspired by when adding elements to the concept of Bottega."

The second outlet of Bottega followed in 2017. Then, the third restaurant, called El Barrio, which serves Mexican cuisine, materialized in November, becoming even more successful with its hot food, to savor which diners form serpentine queues every Saturday night.

The best part of starting their own business, she said, was to retain faith in what they were doing, regardless of what other people say.

"You got to believe in yourself whether you are a female or a male, old or young, industry veteran or a novice, and set mind to the thing you want to accomplish," Shinohara said.

Bruno Ferrari, founder of four successful companies that provide culinary consulting and sell imported food in China. [Photo provided to China Daily]

Kitchen consultant from Italy finds home

Italian businessman Bruno Ferrari, 37, never thought he would like doing business so much in China, where he started from scratch and established four successful companies that provide culinary consulting, sell imported food, and help manage private kitchens.

He is set to open a new restaurant in Shanghai soon, and is the brand ambassador of Italian coffee provider Lavazza in China.

It took the chef-turned-entrepreneur merely four years to get where he is, with supportive Chinese government services and high efficiency he believes is difficult to get in other countries.

"I truly feel welcomed to do business in China," he said.

"China offers good opportunities and support to those who are real talents and ambitious businessmen like me."

In August 2014, after years' work in Michelin-starred restaurants and five-star hotels across the world, Ferrari arrived in Shanghai to work for Shangri-La hotel's restaurant, where he came to know well about Chinese diners' palate for Western cuisine.

A year later, when he was about to leave for a job offer in Japan, a loyal diner invited him to help create a small coffee shop in Shanghai as a consultant, which was followed by another restaurant consulting project in Nanning, the Guangxi Zhuang autonomous region.

He then decided not to leave, inviting such opportunities to shape his future in China. "I fell in love with China and decided to build my business and future here."

The reform and opening-up policy has brought significant changes all over the country and people's living standards have risen at an unbelievable speed, which helps his business to thrive, he said.

"My business trips throughout China give me opportunities to discover China in a deep way. I found that China and the Chinese people are very lovely," he said.

Simon Vericel, founder of Influence Matters, a Beijing-based public relations agency. [Photo provided to China Daily]

Enabling public relations of new firms

Simon Vericel, 38, a Frenchman and founder of Influence Matters, a Beijing-based public relations agency, said the firm will open a new office in Shanghai this year to further expand its business.

Many opportunities come from China's fast technological development, and the great opportunities it has created for foreign companies to cooperate and share knowledge with Chinese companies, to develop new products, services and markets, said Vericel. He decided to study and live in China in 2009 and is now a father of three little children, including an infant.

"The business environment has become a lot friendlier to entrepreneurs and innovation-focused companies in the past five years," he said. "With the explosion of coworking spaces available everywhere, anyone with an idea can start working right away, registration procedures for companies have been simplified and clarified." The general sentiment toward entrepreneurs is positive, so it gives confidence to aspiring entrepreneurs in China, he said.

Influence Matters, established in 2015, is a technology-focused, business-to-business, or B2B, PR agency specializing in support for foreign startups and medium-sized companies to achieve their business goals in China with communication strategies.

Its clients are mainly from semiconductor, engineering, manufacturing, gaming, the internet of things and artificial intelligence sectors.

According to Vericel, China is often the first or second overseas market that firms seeking to expand target, particularly fast-growing companies from both Europe and the United States. Yet, there are few PR or communication agencies capable or swift enough to develop communication strategies in line with their goal of fast growth. In China, everything goes a lot faster than elsewhere.

Vericel also co-founded the French Tech Beijing hub, an organization supported by the French government to promote the nation's technology, innovation and startups all around the world.

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