The Rise Of Haidilao: How Hot Pot Restaurants Made Zhang Yong A Billionaire

Hot pot restaurants are a definite craze sweeping the world, and this has made Haidilao founder Zhang Yong the richest man in Singapore – and that’s no easy feat. In Singapore, half of the population belongs to the world’s richest 10%. In case you’re confused about what a hot pot is, it is a Chinese cooking method that involves a simmering pot of soup stock at the dining table, containing a variety of Asian ingredients. Hot pot originated a century ago as a cheap and easy meal for peasants squatting by the river to cook ox tripe and other offal, but it has since turned into a cultural phenomenon.

Also, it’s pretty hard to become a billionaire as a chef or restauranteur, but that’s exactly what Zhang has accomplished. Zhang’s Haidilao chain of hot pot restaurants has taken over the world. By the end of 2018, Haidilao Hot Pot boasted 466 restaurants in more than a hundred cities, including Los Angeles.

Zhang, 49, was born into poverty in rural Jianyan, Sichuan, China, in 1970. Today, Zhang has a net worth of $13.9 billion, and his hot pot empire spans restaurants in the U.S., U.K., Canada, South Korea, Japan, Australia, Singapore, and Malaysia. His journey from humble beginnings to extreme wealth is not just a testament of hard work, but also of learning from experiences.

Biography of Zhang Yong

Early Life and Education

Zhang grew up in a challenging environment. As a teen, he educated himself by reading books from his local library. He turned to reading to escape his social awkwardness and realized he was “ignorant and dull” after reading authors from outside of China. This sparked a desire for improvement and change in his life.

Despite the obstacles, Zhang dropped out of high school and graduated from a vocational school. He worked at a local tractor factory for six years, where he earned a meager $14 a month. At the age of 19, he had his first meal at a hot pot restaurant, which inspired him to understand the importance of customer service.

Starting Haidilao

In 1994, Zhang made a bold move. He quit his job at the tractor factory after a confrontation with his supervisor regarding a company apartment he wanted to share with his fiancée, Shu Ping. He borrowed $1,500 from her and friends to open a tiny hot pot restaurant with just four tables. He promised them that their investment would grow significantly within five years.

To draw customers in, Zhang offered discounts and free snacks. Despite his lack of cooking skills, he focused on providing excellent customer service. Within months, Haidilao became the largest hot pot restaurant in Jianyang, leading to the opening of a second location that thrived.

Challenges and Growth

The journey wasn't always smooth. In 1998, a friend suggested partnering to open a third Haidilao in Xi’an, but that location failed within six months. Zhang attributed this to not being involved in daily operations, teaching him a valuable lesson about the importance of personal oversight in business.

Driven by a desire to escape poverty, Zhang has built Haidilao into a global sensation. He famously stated, “Haidilao’s mission, vision, and values are one and the same: change your life with your own hands.” The name Haidilao means “scooping for treasure at the bottom of the sea” in Mandarin, reflecting the potential for success and wealth.

Customer Service Philosophy

Haidilao’s reputation for incredible customer service has fueled its success. The restaurant offers unique services such as free manicures, leather shoe cleaning, and massage chairs for customers waiting for a table. Guests are entertained by performances and chefs preparing food right at their tables.

New restaurants are opened every three days, and each location takes just one to three months to break even. The chain's rapid expansion showcases the growing curiosity in Chinese food and culture among foreigners.

Employee Satisfaction and Company Culture

Haidilao’s employees are a satisfied group. Most of the staff in China are young people from rural towns with limited education, much like Zhang himself. The company promotes from within and pays its employees well, with salaries significantly higher than industry averages.

In fact, the CEO of Haidilao started as a waitress, illustrating the upward mobility within the company. The $1,500 loan Zhang initially received has turned all three friends who invested in his dream into billionaires.

IPO and Wealth Accumulation

Zhang’s net worth skyrocketed when Haidilao went public on the Hong Kong stock exchange in September 2018. The IPO raised $963 million, and the company recorded $17 billion in sales that year. Shortly after, Zhang moved to Singapore, becoming a naturalized citizen.

His incredible net worth of over $13 billion helped him dethrone real estate tycoons Robert and Phillip Ng, who have a net worth of $10.1 billion, to become the richest man in Singapore.