(Chinese Version)

Editor's note:

In Beijing, ordering takeout has already become a common daily routine for many white-collar people. Tang Huai, a veteran programmer with seven years of work experience, saw an opportunity in the hot takeout business scene. With a fair understanding and experience in product, operation, and data, as well as a special recipe from his father’s generation, Tang decided to bring hot dry noodles, a special delicacy from his hometown Wuhan, to Beijing. In 18 months, he has already launched four branches in the capital city of China. In this issue of TMTPost Photo Gallery, we are going to learn from this former tech professional on how to start a noodle business.

Changyingtianjie Business Street, Beijing, December 27th, 2017. Tang Huai and his father were busy at their restaurant Master Tang’s Hot Dry Noodles. This is the fourth branch of Master Tang’s. Tang Huai was a former programmer at an Internet company while Tang's father is a life-long seasoned noodle maker. Prior to coming to Beijing, Tang’s father had been selling noodles in Wuhan for years.

Tang Huai had been working in the Internet industry for seven years. A few years ago, he started to plan to utilize all the strengths he built over the years to repackage hot dry noodles and bring them to Beijing and probably the entire country.

Master Tang’s Hot Dry Noodles was kickstarted in an alley at Dahuangzhuang, Beijing. In 2016, following Tang Huai, Tang’s parents both came to Beijing to open a noodle place. Initially, Tang Huai suggested that they could start with doing takeout service and pick a restaurant space with a good environment, while Tang’s dad believed that the first thing they needed to do was to conduct a low-cost market research. Tang’s dad spent days looking for a business space in Dahuangzhuang. Eventually, he found a space with a monthly rent of one thousand something RMB. And they started Master Tang’s there.

In the very beginning, in the small business space with an environment that’s far from ideal, Tang’s father was selling the dry noodles as breakfast as he did in Wuhan. But it didn’t work well. Not many people were buying their noodles. After listening to some suggestions, he decided to sell the noodles for lunch and dinner while providing takeout service via takeout platforms. The business then started to grow. While collars and college students living nearby are their main customers.

From June 2016 to December 2017, Master Tang’s quickly opened up three branches at Tongzhou Wanda, Shuangqiao, Ciyunsi, and Changying, with takeout as their main business. To appeal dry hot noodles to more consumers, Tang and his father modified the noodles according to Beijingers’ preferences and added snacks and soup to the meal. At their Changying’s branch, a bowl of hot dry noodles is priced at around ￥20. More options are available on takeout platforms, priced at between ten and 40 yuan.

February 22nd, 2017, at Changying branch’s kitchen. The cook was preparing the cooking ingredients for the day. This kitchen is currently the central kitchen for Master Tang’s, as it supplies other branches with ingredients such as meat, and sauce etc.

At Changying branch, there are five employees working in the kitchen boiling the noodles, packaging the takeouts, preparing snacks, sauce, and delivering ingredients etc. The cooks will arrive at the restaurant at seven every morning to prepare for the day and make meals for customers who have made orders the day before. Takeout delivery guys will come before ten for the takeouts.

The fried flour snacks, hard-boiled eggs, bread, lotus soup, and carrot soup etc. offered by the restaurant are all freshly made by the cooks in the kitchen except for the noodles which are produced by factories. In this 18 months, besides diversifying our meal offers, another essential improvement they made was the upgrade on the packaging. “We have tried three packaging styles but we still need to improve the packaging. We need to make sure the noodles would still taste good even one hour after being sent from our kitchen,” Tang Huai told TMTPost. Traditionally speaking, the hot dry noodles should be eaten within 15 minutes to ensure the taste.

The branch’s takeout service in Changying covers an area of nine kilometers. The peak business hours had started at noon as orders piled up. It only took the cooks two minutes to get a bowl of hot dry noodles ready. To ensure the consumers to have the fresh-made dry noodles, the cooks would only start making the meal after the delivery guy arrives at the restaurant. “We wait for them to come and then we start preparing the takeout. We work fast. And if we send pre-made takeout to our consumers, they won’t be able to enjoy our noodles that much,” a cook said.

During the peak hours at noon, two delivery guys were waiting outside the kitchen at the Changying branch, asking the cooks to hurry up. Eleme and Meituan are the main sources of takeout orders for this Master Tang’s in Changying. Everyday Tang Huai would spend around ￥400 on the promotion bidding. The takeout platform would extract a commission of ten percent to twenty percent from each order. The commission clearing is completed once every three days.

Changying branch is located at Changyingtianjie Commercial Street, which is quite far from the city center. Most restaurants here all have eat-in spaces, but still, most of them rely mainly on takeout business. During the peak hours at noon and in the evening, delivery troops would flock this area for their orders. From Tang Huai’s perspective, the daily ￥400 promotion expense is incredibly necessary, as 80% of the customers would choose the top 20 restaurants on the app. The promotion bidding is divided into different periods. Without the promotion, it would be quite hard for restaurants to make it into the top 20 or top ten. “So we need to do the promotion accordingly. We have to do it. The competition is fierce with hundreds of restaurants competing with each other in this area.”

The restaurant has an eat-in space of 50 square meters, which is not crowded with customers for the most of the time. On January 22nd, only four customers came to the restaurant to eat in, two of which were actually the delivery guys.

Different Changying branch, Ciyunsi branch doesn’t even have eat-in space at all. This branch has a space of less than twenty square meters and relies only on takeout business. Every day, ingredient supplies from Changying branch will be delivered to this branch. This small business space’s monthly rent is as high as ￥10,000. During peak hours, the takeout order volume would rocket to over three hundred. “We have more than one hundred orders every day on average,” he said.

At this food court plaza, only a few restaurants with larger space have an eat-in area for their customers. Most of the restaurants here rely on takeout service just like Master Tang’s does. “Besides all those licensing standards, we also look at two other elements when selecting business sites. First, we look at if there are enough delivery guys nearby and then we check on the takeout platform and see if how many restaurants nearby have a monthly takeout order volume of over 3000. If there is no nearby restaurant that has achieved such volume, then it means this area is not really good for takeout business and we won’t consider them,” Tang Huai told TMTPost.

This food court has an elevator installed specifically for delivery troops so that they wouldn’t have to wait for too long for the elevator during peak hours. Tang Huai has invested a total of ￥600,000 in his noodle business for his four restaurants. The main expense here is actually the rent. The most expensive monthly rent of his restaurants is around ￥20,000. “After taking into the consideration of rent, utilities, labor cost, promotion, a commission fee, ingredient cost etc., we can still make a 30 to 40% profit,” Tang said.

In late January, Tang Huai officially resigned from the company and has started to devote his time and energy to the operation of the restaurant. He pays attention to the operation data the most as he spends time reading and analyzing the data change of each branch every day. Tang also conducts researches on the restaurants and customers within the area so as to make sufficient operation strategies. “The more you do this the more confident you become. Very often we get calls from the customers who want to come to our restaurants to eat in asking our address. They would even chat with our staff after they finish their meal,” Tang said. He is hoping to lay a firm foundation for his business and establish a franchise chain model to penetrate the entire country with hot dry noodles.

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Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.