Gennadii Bochkar and Chen Feng are co-founders of a chain of restaurant bars in China. Shanghai residents will be very familiar with some of their brands such as Bites & Brews, Blue Frog, Barbarian, and Nomad among others. Here, they offer insights into how to successfully scale a restaurant business in China. They don’t concentrate on specific cuisines like French, Indian, Thai, Chinese, or Italian food but rather they focus on creating a certain atmosphere and concept for their brands through exciting décor and diverse menus.
This helps them to be more dynamic, and flexible with changing trends in the market and they can be more innovative with their menus and restaurant layout. It also gives them more stability as they don’t have to rely on one cuisine being innovative or rely on the continued presence of a large group of one country’s expats in China.
Here is a transcript of our interview with entrepreneurs who have succeeded in scaling the restaurant business in China, Gennadii Bochkar and Chen Feng
Today we are chatting with Gennadii Bochkar and Chen Feng, co-founders at the restaurants BIBIMI Group. The BIBIMI Group has launched a number of interesting lifestyle concept restaurants in China and concept bars. The plan is to have 300 venues by 2045.
What is the current size of BIBIMI Group and how much in revenue?
We have 8 restaurants, currently all in Shanghai. We employ around 160 people with around 25 people in management-level positions. We serve around 3-4,000 people every day. We would have around 10-20 million RMB in revenue every month.
Can you give us a brief history of BIBIMI Group?
Gennadii Bochkar: Opened our first restaurant in March 2016. Initially, there were 2 co-founders, myself and Chen Feng (Fiona). Now, there are other 2 top-level managers, Todd and Sasha who design our menus and cocktails respectively. Neither of us had an F&B background. I worked in big data where I developed some ideas for my business.
Chen Feng: I initially trained as a nurse but at 27 I switched to work in sales at Novartis. However, I am a sociable person and I started planning on how to follow my dream of opening a restaurant. I met Gennadii 2 years later and that’s how it began.
What was the vision of scaling from Bites & Brews to the BIBIMI Group?
We started Barbarian 1 year after Bites & Brews. We always wanted a long-term plan for the business so creating a group was in our minds from the offset.
Fast casual and casual dining – why is the BIBIMI group in between?
We identified some main markets, delivery and inexpensive, and then relatively expensive casual dining. We identified a blue ocean and placed ourselves between these 2 categories. Based on consumer data analysis we target the office workers niche market looking for something a bit more refined than Wagas. But our different restaurants have 4 general brand directions
|Bites & Brews||Casual, Lifestyle Average price of 80 – 100 RMB per meal|
|Barbarian Nomad||Casual Average 200 – 300 RMB per meal|
|Hot Chick||Healthy, takeaway chicken Window business model|
|Nightclubs 满MANIA||Small – medium size High quality, slightly expensive drinks. Quality drink and sound experience|
The Beginning – was money raised to start or to grow the business?
We relied on one our own funds and one primary investor, who has a group of investors behind him. For our first restaurant we raised the money ourselves. It cost around 400,000 RMB for the first restaurant.
What kind of investment is required to scale a restaurant business in China?
23 million RMB is roughly the investment we have received so far. But if you want to scale a restaurant business in China there are 2 main ways. One way is through friendly investors, however, if you want to scale a restaurant business in China at a real pace you need to find a more institutional investor.
What are the principles involved in building new concept restaurants in China?
We need to have separate brands to prevent our concepts from becoming stale to consumers and spread our investment across the brands so that we can continue to be innovative.
Good value for the consumer is important, but safety and stability are important for the business model. It’s easier to survive if you don’t pin yourself down to one particular category of restaurant. We want diversity in our rests and clubs to create the best vibes. For us, we need our managers to love the business, this is also very important.
Do you leverage social media when building new concept restaurants in China?
Yes, I do data research for big brands like LVMH. I leverage these skills to identify trends in the restaurant business in China and then we analyze these trends and look at potential markets such as, young people, professionals, singles, etc. which we can then create niche brands or experiences for.
We also use social media to manage a CRM system where we do a lot of social listening.
We look at signals in the market to keep us ahead of trends and give consumers what they like and what they may like.
What does BIBIMI group’s competition look like?
There are probably 2 levels. On one level we compete in terms of food and drink. On another level, we compete in terms of customer experience, where people go to have fun and relax and unwind.
Did the coronavirus outbreak affect the BIBIMI group’s business in a positive way?
Probably the coronavirus played into our hands, travel restrictions meant people were looking for an exotic experience within Shanghai. Places like Barbarian are stress relievers for people to forget about the hardships of the day.
What economy of scale strategies can BIBIMI group employ in the future?
The technical part might include a central kitchen, we can import more key products ourselves rather than relying on a distributor. Another is unleashing the talents of people skilled in food preparation, drinks makers, and interior designers to a larger audience. In this way we can be a platform for these people to express their talents on a larger scale.
Are the economies of scale all to do with having a great backend strategy?
Yes, our front end is similar in that the concepts are relaxing and interesting environments but our back-end can be quite similar in terms of a talented team of chefs and bartenders working together with other talented professionals and they can move from one brand to another.
What software does the BIBIMI group rely upon in their day-to-day business?
We use WeChat to engage with consumers but this is only really managing WeChat groups because it’s very personal. To analyze and identify trends in the restaurant business in China we use my company, Linkfluence. Of course, we also use software to stay up to date with figures from the business side of things.
What are Fiona’s responsibilities within the group?
Chen Feng: We brainstorm together to identify trends in the restaurant business in China, then when we have avenues we think we can exploit, we strategize together, too. Also, I maintain communications with investors.
Is the interior design service internalized or externalized?
Yes, I am heavily involved in the interior design of the restaurants. As soon as Gennadii defines a concept, I will start trying to imagine the design of the restaurant and deliver it quickly.
Paying back investors – a BIBIMI group timeline
We generally forecast a loss for the first 1 to 3 months, but after that we are cash flow positive and we aim to repay investors within 1 – 3 years.
How does Fiona handle Gennadii not being involved in the business full time?
Gennadii is mostly involved in the initial phase of the project but not so much in the day-to-day aspect. But he provides invaluable data analysis to us.
What books have inspired Fiona in her entrepreneurial journey?
I have read a lot of inspirational business books by Donald Trump.
What books have inspired Gennadii in his entrepreneurial journey?
I stopped reading a long time ago, I was a voracious reader in my teens but now I look more towards YouTube sources for inspiration. I read a lot of social media, tech, business-related news on the internet or on YouTube accounts, these help me to see trends. And I consume a lot of TedTalks content and I absorb a lot of information from inspirational figures like Elon Musk.