Dessert chain offers place to chill out

PUBLISHED : Tuesday, 07 August, 2012, 12:00am
UPDATED : Wednesday, 15 August, 2012, 11:07pm

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Hong Kong dessert shop chain Hui Lau Shan is speeding up its expansion across the border with the aim of becoming a popular hangout modelled after Starbucks.

The company, known for its 'mango platter' and 'glutinous rice balls in mango juice' dishes, plans to more than double its total number of shops to 250 by the end of next year. More than half of the new shops will be located on the mainland targeting young consumers.

Spacious dining areas, comfortable couches and beige-coloured walls and floors are already some of the features of a new Hui Lau Shan shop on the ground floor of an office building in Jianguomen, Beijing.

'Most of our mainland shops are much bigger than the Hong Kong ones, with gross floor areas from 800 to 1,000 square feet,' said William Chew Chee Ling, chief executive of Hui Lau Shan Food Manufacturing.

'Our idea is to create a comfortable leisurely space for people to relax, meet friends or surf the internet, just like Starbucks.'

Founded by the Hui family in the 1960s, the Hui Lau Shan dessert chain started from a small shop in Yuen Long selling herbal tea and herbal jelly.

In 1992, the brand launched a new product, 'mango sago', which was well received by customers and earned it a reputation for top-notch fresh fruit desserts. The company now offers about 100 kinds of fruit desserts, drinks and snacks, and operates roughly 110 shops in Hong Kong, mainland China and Malaysia.

In July 2007, the third-generation owner of the family business sold Hui Lau Shan to Malaysian private equity firm Navis Capital Partners.

Chew, a Malaysian who was previously an accountant and had also run a food business in his country, took charge of the company after it changed hands and started to expand in mainland China. 'In Hong Kong, mainland tourists are the major source of our customers. It gives us the confidence to bring the typically Hong Kong flavours to other cities in China,' he said.

Hui Lau Shan opened the first mainland shop in Shenzhen in 2008 and has since set up outlets in Shanghai, Hangzhou, Suzhou, Guangzhou, Zhongshan and Foshan. In the first half of this year, it opened four shops in Beijing and two in Tianjin.

To operate a fruit dessert business in a vast market such as mainland China, keeping the ingredients fresh is a key factor in maintaining quality.

Hui Lau Shan solved this problem by establishing three central kitchens in Shenzhen, Shanghai and Beijing. Staff at the central kitchens are responsible for buying, selecting and rating the fruit, as well as preparing some of the dishes, such as puddings and jelly.

In the mainland business, about 70 per cent of the mango, the main ingredient used in the chain's offerings, comes from the Philippines. The rest is from Hainan, Guangxi, Thailand and Vietnam.

All its shops in southern China are managed by the company itself, while it is working with a mainland property company to develop the northern market.

Chew said a mainland shop took in average sales revenue of about 300,000 yuan (HK$367,800) per month. Prices at its Beijing shops, he said, were about 10 per cent higher than in Hong Kong because of extra costs incurred in logistics and sourcing. And, there are certain products that are not available yet in Beijing and Tianjin.

'Since winter in the north is much colder, we are planning to offer more hot drinks, soups, and even a hotpot chocolate in the northern market.'

He said the company would also introduce traditional rice dumplings in its dishes and might launch a new dessert series later this year that would be a mix of fresh vegetables and fruits.

'There's something deeply satisfying in savouring a dessert,' he said. 'Compared to coffee shops, what we are offering is tastier, healthier and more appealing.

'If we can serve it in a nice environment, I believe we will attract a lot of fans, especially youngsters.'