Cafe chain founder wants Hong Kong to get into the Italian coffee Habitu
Coming from the family that owns Liu Chong Hing Bank is certainly advantageous for an entrepreneur. But Jennifer Liu Wai-fun, founder and chairwoman of the Caffe Habitu chain, deflects the notion that her wealth and connections carry her business, saying she has to fight for customers like every other entrepreneur.
'Being the sole owner with the ability to raise capital doesn't mean people will actually buy our products. All of us at Habitu work hard every day to prove ourselves to each customer,' she says.
Liu launched the chain in 2003, just as the city was regaining its footing following the outbreak of severe acute respiratory syndrome.
It was a risky time to launch an upmarket coffee chain aimed at replicating Italian coffee and casual dining outlets. But rents were cheap, and there was also less competition then from the behemoths of the sector, Starbucks and Pacific Coffee.
Liu's interest in coffee and the idea for Habitu came when she was studying architecture and design in Italy, where she saw how coffee had a central place in the way of life.
Liu had heard the critics saying her vision would not work in Hong Kong. She was told full-service dining and coffee shops were hard to run, requiring a complete kitchen and trained cooking staff at each location. Consultants pointed out that such international players as Starbucks didn't install kitchens and as such were much easier to build and operate.
Still, Liu was undeterred. She was not willing to compromise her vision of casual, home-style Italian cooking and desserts in stores that suited each particular neighbourhood. Instead of going head to head against the competition, she refined her vision.
'From the start, I imagined Habitu as Hong Kong's own version of the Italian coffee experience. That meant we shouldn't maximise seating capacity but enhance the customer experience,' Liu says.
For example, the Star Street cafe features bigger tables than other locations because Liu observed that tenants in nearby offices were designers, lawyers and architects who could use more space to roll out their blueprints or documents and meet over a cup of coffee. By resisting the cookie-cutter layouts of her competitors, Liu gradually built Caffe Habitu's identity and cultivated customer loyalty.
When the controversial issue of whether to offer free Wi-fi emerged, Liu rejected the cynical view that Wi-fi 'squatters' or 'laptop hobos' would eat up profits.
'I suspected Wi-fi would soon be offered for free everywhere else, so why fight a trend that's out of your control? Instead, use the trend to attract and retain customers. Now we know that a few squatters really don't impact our sales.'
The Habitu team monitors the market to keep the brand fresh. 'Hong Kong's food scene changes so quickly that staying truly differentiated is a regular exercise,' Liu says, so the team engages customers through apps, blogs and social networking; it uses Facebook to organise gatherings and coffee appreciation nights. 'Facebook is ideal for finding new fans and rewarding regular customers. We use social networking to find our customers one by one,' she says.
Her plans include expansion into the mainland and Southeast Asia, and for that she needs partners.
'I'm looking for a partner with a genuine commitment to, and understanding of, the Habitu experience of a genuinely good cup of coffee before considering any expansion.'
Its new Suzuki brand extends Habitu's core brand into the mass market with a more affordable menu. One of Habitu's successful partnerships is with the retail chain G.O.D. Both founders clearly share the same passion. 'Both Douglas Young [chairman of G.O.D] and I are trained architects and entrepreneurs who aspire ... to be Hong Kong brands,' Liu says.
Habitu employs more than 400 people in 24 outlets. It took the group about two years to break even, though earlier outlets needed costlier locations to gain recognition, which is not required today. Each store now needs 12 to 15 months. Average monthly revenues are running at HK$1.5 million per store and the business is profitable.