Hai Di Lao's founder is Singapore's richest man - 5 reasons why it is so successful

By now, you must have heard the news that the richest person in Singapore in 2019 is Zhang Yong, the founder of Hai Di Lao a.k.a. everyone’s favourite hotpot restaurant.

What makes this all the more mind-boggling is that Haidilao’s founder was never the scion of some wealthy cosmopolitan family. According to Wikipedia, Zhang Yong was a rural Sichuanese, and worked in construction and manufacturing before opening a tiny little hotpot eatery.

So… How on earth did Hai Di Lao turn into the standard Chinese destination for extravagant birthday celebrations and team-bonding dinners?

And why are we so willing to pay crazy amounts of money — a typical Hai Di Lao bill is at least $50 per pax — to boil our own food!?

Here are 5 possible reasons why the Hai Di Lao empire is so freaking successful:

1. HAI DI LAO IS ACTUALLY AN EXPERIENCE, NOT A MEAL

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Hai Di Lao may boast great service and yummy food, but so do hundreds of other restaurants in Singapore — you don’t see people queueing day and night outside those, do you?

Similar to how going for Ultra Festival or ZoukOut is an experience over and above the drinks, the music and the portaloos, Hai Di Lao is more than the sum of its tomato soup, fried mantous and polite staff.

What sets Hai Di Lao apart from any ol’ hotpot place is all the theatrical extras you don’t get anywhere else, like the manicures, games, extravagant birthday freebies and “noodle dance” performances.

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At least in Singapore, we go to Hai Di Lao for the full experience, not the meal.

Since you can’t get the complete Hai Di Lao experience anywhere else, Hai Di Lao sets the price, and we’re all too happy to pay it. That’s why even though HDL is expensive for hotpot, no one really minds.

2. HAI DI LAO MAKES QUEUEING ACTUALLY ENJOYABLE

Although long queues are usually a turn-off for would-be diners, Hai Di Lao spends a considerable amount of resources into making the wait an enjoyable activity.

Waiting for your table at Hai Di Lao is an essential part of the experience. When else are you going to eat free snacks, play games and get free manicures!?

Although it’s possible to skip the queue by reserving a table, it’s actually not advisable to do so. 

You think you’re doing everyone a favour, but you’re not, because everyone will be slightly upset that they didn’t get their nails done. (Though the last time this happened, Hai Di Lao gave us free manicure vouchers to redeem later.)

By making one of the biggest pain points of dining out an enjoyable experience, Hai Di Lao pulls off the incredible feat of making you wait and making you pay for it. And as any bubble tea shop would know, constant queues are great for business. Kaching.

3. PARENTS WILL SPEND CRAZY $$$ TO BE APART FROM THEIR KIDS

Many so-called “family-friendly” restaurants make the mistake of letting children dine together with parents. 

Actually, all this achieves is alienate a significant chunk of the dining population who do NOT want to listen to someone else’s child howl for an hour or drink soup enhanced with some stranger brat’s spittle.

And while Mom and Dad enjoy bonding over dinner with precious lil’ Khaleesi, it turns out that… umm, actually they like dining away from her even more.

Hai Di Lao knows that there’s no greater luxury for parents than temporary relief from the burdens of parenthood.

So they’ve spared no expense when it comes to setting up a childcare room in each restaurant, complete with in-house nanny and a CCTV feed so you can check in on your kid without leaving your ma la soup unattended.

Since there isn’t much of a nanny / babysitter culture in Singapore, Hai Di Lao is one of the rare places that parents can enjoy a couple of kid-free hours without guilt. And that’s definitely worth paying for.

4. IF HAI DI LAO HAD A LOVE LANGUAGE, IT WOULD BE ACTS OF SERVICE

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Maybe this is something to do with Singaporean pragmatism, but I couldn’t care less about the more ostentatious forms of customer service that you get at fancy restaurants. You know, like the waiter calling you “Madamoiselle” and pulling out your chair, that kind of thing. 

I mean, I’m used to being ill-treated by cranky kopitiam aunties. Over-effusive service just makes me suspicious about the quality of your food.

It’s amazing that Hai Di Lao has grasped this about their clientele. Instead of making their staff excessively servile — such as by bowing 90 degrees or offering dishes on their knees — its service philosophy is totally pragmatic.

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That’s not to say that their staff aren’t polite. They are, but they won’t shower you with flowery compliments. Instead, they’re observant and efficient, dispensing free hair ties to those with long hair, slipping you mobile phone-sized ziplock bags and quietly refilling your drinks and soup. 

These practical touches may not be very showy, but they make dining at Hai Di Lao an experience worth paying for. Personally, I’m happy to pay the salary of whoever thought to stock menstrual pads in Hai Di Lao’s women’s bathrooms.

5. THE HOTPOT CONCEPT IS ACTUALLY SCALABLE

But the real genius of Hai Di Lao is that the hotpot concept is relatively easy to replicate globally. 

Consider a typical sit-down restaurant where good food is the main draw. Becoming a successful franchise would be extremely dependent on the culinary talent — one would have to somehow attract, hire and train chefs who can cook exactly like the original.

Well, we know that’s incredibly tricky, especially in different locations where talent may not be easily available.

It’s a different matter with a hotpot restaurant, since the customer does her own cooking. The logistical difficulties of finding and retaining culinary talent is off; you basically just need to maintain the consistency of your ingredients and soup stocks.

Of course, setting up and running a Hai Di Lao restaurant is probably quite expensive. But since it does not depend on culinary talent, it’s actually possible to replicate the concept.

Hai Di Lao has locations as far away from China as the UK, the US and Canada. This shows that you can run a branch pretty much anywhere there’s an appetite for Chinese hotpot. And that’s how a billion-dollar restaurant empire is made.

This article was first published in MoneySmart .