Hungry for success, Hong Kong’s food trucks hit the road

After facing prohibitive start-up costs, operators of the mobile outlets can only hope they have found a winning recipe

PUBLISHED : Tuesday, 31 January, 2017, 7:19pm
UPDATED : Wednesday, 01 February, 2017, 12:19pm

In an open parking lot under a flyover in Sai Ying Pun, Stanford graduate Angela Huang was meticulously sketching on the exterior of a truck with brushes.

Cartoon portraits of her friends and family were among the images to be drawn on the sides of the 5.5-tonne vehicle, with the name “Princess Kitchen” emblazoned in the middle. Huang was putting the final touches to bringing her mobile food business to life.

The sky-blue vehicle is one of the city’s first batch of 16 food trucks to hit the streets on Friday. They will be serving locals and tourists at eight popular locations with a selection of creative delicacies including colourful dumplings, dragon fruit smoothies and American-style steamed bread.

Where to tuck in at a Hong Kong truck stop

This marks the beginning of a two-year pilot scheme to diversify the city’s tourism offerings, announced by former financial secretary John Tsang Chun-wah two years ago.

Huang, a heiress of local catering group Chee Kei, a restaurant chain famous for its wonton noodles, was among the 16 chosen pioneers.

After quitting her dream job and leaving a comfortable life in the US, the 25-year-old came back to Hong Kong to defy the city’s stereotypical “princess” label by becoming a full-time food truck operator.

The young entrepreneur said the project was “a good learning opportunity” and she was prepared to prove that a princess could cook and run a business well.

“I feel like the word ‘princess’ has a negative connotation in Hong Kong. I want to use Princess Kitchen to send a message about what I feel about princess,” Huang said.

“It is not meant to be a girly and traditional type of princess. People should be able to define their own kind of beauty, happiness and health.”

Huang learned about the two-year pilot scheme while working as a consultant in San Francisco.

“I want to come back for something that I am excited about. This is something I really want to do.”

In order to learn the daily operation of running a mobile food business, the heiress started by taking orders in a food truck in San Francisco and visited different ones in Los Angeles.

“I hope people are curious about the food and the image because I spent a lot of time painting the truck,” she said.

Hong Kong’s new food trucks: wonton noodles, halal Cantonese pastries, egg tarts and pork rolls soon on offer among 16 winning operators

Her food truck will offer dragon fruit smoothie bowls, which she used to make at home but is rarely available in the city.

“I want to make something that you couldn’t normally find in Hong Kong. It helps bring diversity to the market.”

When asked if her talents would be underused by running a mobile eatery, Huang said there was always a way to apply her talents and she felt “very lucky” to be part of the pilot scheme.

“It is a very fun and exciting project for me ... It’s a great way to start a business. Getting out and actually doing it is a different experience from school. It’s good for personal growth.”

She has hired two full-time staff to help operate the truck.

The two-year scheme has generated controversy and debate since its announcement, as critics said the rigid requirements and expensive costs were beyond the reach of smaller players. This prompted the government to offer incentives to start-ups and micro-enterprises to compete with bigger rivals. In the end, seven out of 16 winners were smaller firms.

But now those smaller winners are worried about whether they can turn a profit given the substantial upfront costs.

Liu Chun-ho, a part-time hawker and small restaurant owner in Yuen Long, said he had spent HK$1 million on his truck so far. He had to get a bank loan and raise money from relatives.

“I was planning to spend from HK$600,000 to HK$700,000 originally. But I realised the actual costs are much higher when I started preparing it,” he said.

Liu’s food truck – “Mama’s Dumpling” – will lure eaters with his signature dumplings with wrappers in five colours. He said the main purpose was to “make money”, but the escalated spending had made him more and more nervous.

Almost HK$180,000 was spent to fit out the truck in accordance with the government’s various safety and hygiene requirements – triple the price for a regular truck, he said.

“It’s stressful to bear a cost that big. I’ve spent almost a million. It scares me when I think about it,” he said.

Despite the hefty financial burden, Liu said he applied for the scheme because he genuinely loved being a hawker. “I miss the times of being a hawker. Customers are happier and know how to appreciate the food.”

Liu has been selling dumplings for almost seven years during celebrations of traditional festivals. His food has gained a good reputation with up to 200 people queueing at his stall.

Four generations of the Liu family have been dedicated to making dumplings, and even his nine-year-old daughter has mastered the skill. Liu said the food truck would be run entirely by relatives.

He plans to sell a box of six dumplings for HK$40. Pig knuckles, fried dumplings and soybean milk will also be on offer.

Besides the local players, some overseas operators are hoping to tap the vast Asian market from a food truck in Hong Kong. Los Angeles-based Book Brothers Food Truck is one of them.

“Hong Kong is a much better place to promote the brand compared with mainland cities,” said Raymond Wong, who was assigned by the US firm to manage its first food truck outside the US, thanks to the city’s international image.

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The firm, which operates seven food trucks and one restaurant in the US, won the hearts of local judges last year with its American-style BBQ steamed bun, which integrates Chinese and Western elements.

Wong said running a food truck was a much cheaper way to establish its brand reputation given the city’s high operational costs.

The company had invested about HK$1 million on the project so far, Wong said, while opening a small cafe could easily cost HK$2 to HK$3 million.

It only needs to pay about HK$20,000 per month for the site at Hong Kong Disneyland – which is the most expensive location – while monthly rents for a restaurant in a prime location could climb to hundreds of thousands of Hong Kong dollars.

Another advantage was the smaller competition in the city due to the limited licence numbers, he added.

It’s not easy to make a profit by operating only one food truck
Raymond Wong, Book Brothers Food Truck

“There are about 2,000 food trucks in Los Angeles only, but there is still a huge market vacancy in the Greater China region,” Wong said.

However, the American firm has to meet more stringent requirements. For example, Hong Kong authorities prefer operators to use new vehicles, while many of its US food trucks are converted second-hand trucks, which are usually HK$100,000 cheaper. Additional back-up batteries are also required by the local authorities.

“It’s not easy to make a profit by operating only one food truck,” Wong said.

Based on its overseas experience, Wong explained food truck operators relied on a scale effect to lower the average cost for each unit.

“At least four will he needed [to make a decent profit],” he added.

Some arranged locations, such as Energizing Kowloon East harbourfront, had few pedestrians during weekdays, he said, making things even harder.

Although Wong did not expect the food truck to bring it immediate financial returns within the two-year pilot period, he hoped the government would issue more licences in the future.

Despite hopes that food trucks could diversify the city’s culinary scene, industry veteran Simon Wong Ka-wo was concerned that the initial business performance might not be as good as expected.

The president of the Hong Kong Federation of Restaurants and Related Trades and adviser for the government-led project said it would usually take a while for customers to accept “unconventional food”, while the creativeness of the dishes was one of the major criteria when the operators were selected.

“Tourists may still go for traditional Hong Kong food for the time being,” he said.

He suggested the government run more promotional campaigns and that the operators adjust the menus based on the current dining culture.

The rigid requirements will turn away potential operators and eventually dim the new business
Simon Wong Ka-wo, food industry veteran

However, Wong admitted there were risks for the first batch of operators, because the authorities may not allow them to change the offerings. He also called for a lower threshold for interested people to be able to access the new business in future.

“The rigid requirements will turn away potential operators and eventually dim the new business,” he warned, as one of the selling points of a food truck was its flexible operational model.

Tourism sector lawmaker Yiu Si-wing suggested more food trucks be staged near busy office premises, where workers have a hard time finding affordable options during their short lunch breaks.

“White-collar workers in Central always have to queue up to dine in small restaurants, or to get take-aways,” Yiu said.

He said the pressure could be substantially alleviated if food trucks were allowed in these areas during peak hours. But prices needed to be lowered.

Yiu expected the first batch of food trucks to lure frequent visitors to the city who were looking for new experiences. But he didn’t think travellers would specifically come to Hong Kong for the food.

“[The food trucks] serve the purpose of diversifying the city’s tourism offerings,” he said, though tourists had never been the main source of food truck customers in other countries.

Yiu expected half the customers to be locals who are enthusiastic about distinctive food.

“It should not be treated as a tourism project only if the pilot scheme turns out to be successful,” Yiu pointed out.