Dial & Dine
By Helen Yuan
Grand business plans sometimes originate from the simplest of ideas. The now-thriving Guangzhou-based company started by Li Xiong (CEIBS EMBA 2002) is a testament to this; the service provided to his 10,000-plus customers is help in answering the common question, “Where should we eat tonight?”
The concept started with Li’s dissatisfaction with existing restaurant guides, mainly conventional, printed books flawed by limited, inconsistent and often outdated information. Seeing big demand for dining information - eating out is a major social and business pastime in Guangzhou - and little competition, the 48-year-old former realtor moved swiftly to fill the void. His product: an online and mobile-phone accessible MYFB Restaurants Guide. The service provides detailed information on listed restaurants, their location, their dishes (including eye-catching photos and clearly stated prices) plus honest comments posted by fellow customers. Using its “booking secretary” program, customers can make reservations at any of the listed restaurants by calling just one phone number. Perhaps best of all, the service allows diners to download coupons from its website, to use at the restaurant of their choice.
Today, 3,200 Guangzhou restaurants have listed on Li’s Guide at www.myfb.com.cn. In addition to the 100,000 phone subscribers, the service is also viewed by 900 visitors to the website daily. Most impressively, Li’s revenues are growing quickly, using a series of creative sales streams. First, he pays restaurants a small fee to list with the Guide, then invites client restaurants to use his service to organize promotional events. Another revenue stream is the agreement with China Mobile in which the telecom giant shares the pay-per-message revenue earned by phone users of the Guide service. Last, the Guide cooperates with corporate partners to create customized products such as dining coupon books that give bank customers a discount on meals when they use the bank-issued credit cards at listed restaurants. These three channels have seen the Guide’s revenue jump from zero in 2006 to RMB1.4 in 2007.
But such figures make Li’s success sound easily won. In fact, just three years ago, he faced serious difficulties in launching. First, he needed listed companies to attract viewers. Thus, before he could launch the service in January 2005, he had to compile a comprehensive database of eateries. But restaurateurs were reluctant to list on a site with no track record of user-ship. After setting face-to-face meetings with hundreds of reluctant restaurateurs, many repeatedly refused to cooperate. After several months of stalemate, Li decided to take a radical approach.
Jump-start
Li’s strategy for jump-starting the business was to create a mock-up sample of a traditional printed restaurant guide, with several twists. First, he sought to attract support from one of China’s Big Four state-run banks. Customers could only use the coupons for the restaurants in the book if they paid using the bank’s credit card. When the bank president remained unconvinced, Li added a sweetener: he would defer the contract signing until after the book was printed.
With the future of the bank deal still uncertain, the MYFB Restaurants Guide sales team spent the next two months persuading restaurant owners to not only offer discounts, but also to tie their price cuts to the use of one bank’s credit cards - terms that did not make for easy sales.
Even so, eight weeks later, Li was able to present an attractive, well designed Advanced Business Diner Handbook to the bank president. Impressed, he signed the contract. In fact, noting that Li’s product had attracted credit-card holders, the bank president gave the green light for Li to place restaurant ads on all Guangdong Province credit-card statements. This brought Li the legitimacy and clout to expand his services to include even more restaurants. At last, momentum was building.
Going mobile
The next frontier for Li was mobile technology. In March 2007, MYFB Restaurant Guide inked a deal with China Mobile (Guangzhou) in which both sides share information from their databases of restaurants and phone subscribers, respectively. The deal allowed MYFB access to more than 100,000 mobile phone subscribers, which the company used to enter into Multi-media Messaging Services (MMS). Soon after, MYFB began providing cel users with text, sound, images and video messages giving data on its member restaurants. This portion of MYFB’s operations now brings in up to RMB300,000 each year.
Going one step further, this past August, MYFB’s MMS business began offering information via a Global Positioning System (GPS) platform. Li’s clients can now use their GPS systems to access maps to listed restaurants or use their mobile phones to plan travel routes.
The coming year will be a critical time for MYFB as Li plans to introduce his mobile-based services in Beijing, Shanghai, Hangzhou, Nanjing and Shenzhen. His goal is to offer cel users the ability to download restaurant coupons straight from their mobile phones.
Constant innovation has been a critical strategy for his company, says Li. After all, his line of business requires minimal start-up capital and has low entry barriers. For example, Li launched his business using RMB2 million of his own funds. The bad news is that competitors can also enter the business easily.
Courage and vision will help the company succeed as competitors arrive, Li says. “If a competitor appears one day, let’s fight face to face. If, unfortunately, we are beaten by the opponent, it must be that the problem lies with us, rather than that the opponent is too strong,” he says. “I am not too worried about competitors. Improving our skills, integrating resources and being innovative are a part of the company culture and that is very difficult to replicate,” he adds with calm confidence.
In addition to facing external challenges, Li has also faced internal challenges. He says his biggest operational difficulty has been in changing his employees’ attitude so that they approach their job from the customers’ point of view. His strategy for instilling such a mindset has been simple: Says Li: “Words alone cannot change the way a team thinks. A leader should also practice what he preaches.”
Li Xiong (CEIBS EMBA 2002)
Hometown: Guangzhou
Title: Founder & Marketing Director, MYFB Restaurants Guide
Company launch date: 2005
Business focus: Online and mobile phone accessible restaurants guide
Business size: 30 employees, 3,200 listed restaurants, 100,000 mobile subscribers, average 900 website visitors daily
Goal for 2008: Increase current database to 70,000 restaurants in Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou and Nanjing.
