Shanghai Restaurant Week 2011

Shanghai Restaurant Week 2011 is coming!

Shanghai has many ‘fine dining’ restaurants but most of them are quite expensive. If you had always wanted to try some of Shanghai’s best restaurants such as for example Kathleen’s 5, Danieli’s, T8, M1NT, or Sir Elly’s, the Shanghai Restaurant Week may be your chance.

Organized by the team behind DiningCity Shanghai, Dutch entrepreneurs Onno Schreurs and Siem Bierman, this year’s Restaurant Week will take place from 7-13 March. During this week top restaurants will serve a special 3-course lunch or dinner for an amazing price. In the A-level category a 3-course lunch is RMB 118 per person and a 3-course dinner is RMB 248, at the other restaurants the lunch is priced at just RMB 78 and dinner for only RMB 168.

You can’t book directly at the restaurant, but you will have to book online through www.shanghairestaurantweek.com. Bookings will be directly in the reservation system of the restaurant. The website will open Tuesday February 22 at 10 AM. If you want to secure a table at the best restaurants better set your alarm because last year those seats were sold out in no time.

In total there will be about 50 participating restaurants in this Restaurant Week, representing cusines from all over the world. I got a sneak peek already and I saw among others French, Italian, Spanish, Japanese, Cantonese and Shanghainese restaurants on the list.

I tried Restaurant Week last year and was pleasantly surprised by the dinner that I had. Some people assume that for this kind of prices you will get smaller portions, but that’s not the case: the restaurants give you full portions and of the highest quality. It’s a great way of advertising for them for new customers. I am inspired to try out a few new restaurants myself, and like last year I will surely visit those places again outside of Restaurant Week if I like them. Don’t miss the opportunity to try out some of Shanghai’s greatest restaurants!

Online booking: www.shanghairestaurantweek.com. The site opens February 22, 2010 at 10 AM sharp.

Groupon China off to a bad start

Groupon China site went offline again

Instead of going for a run during my lunch break yesterday I decided to write an article about Groupon China. It was published on the Silicon Alley Insider last night, the original article is here. Make sure to also read the comments under the SAI article, and the update I just added at the end of this blog post.

It doesn’t happen often that a US Internet company enters the Chinese market with a huge budget, so when a company does this the Chinese media follow all the steps this company makes.

The media know that most non-Chinese Internet companies eventually fail spectacularly, so a good story is almost guaranteed. Groupon seems to be doing its best to become part of the infamous group of companies like EBay, Google and Yahoo.

In January stories surfaced saying that Groupon wanted to enter China by investing hundreds of millions of dollars, which is a good way of attracting press. Then rumors about a potential joint-venture with Tencent (one of China’s biggest Internet companies) were reported, and these turned out to be true. Many people including myself thought this would be a smart strategy to enter the market and gave them the benefit of the doubt. But things have changed a lot since.

First came the news that Groupon China’s

Higher prices could lead many people and businesses to leave China’s big cities

Pudong skyline
I wrote this article for the Business Insider, the original article is here.

China’s high growth over the past decades turned the country from a developing into a developed country. But the continuous high growth also leads to price inflation and higher wages. In big cities like Shanghai that may lead to problems that not everybody is aware of yet.

For years prices have been rising steadily in China. The price of fuel is about 3 times as high as 10 years ago for example, but also daily necessities such as rice keep on going up in price. That is the same all over China, but especially in the big cities the housing prices are also going through the roof. They are now at such a high level that even white-collar workers cannot afford to buy apartments anymore.

I realized this for the first time about 2 years ago, when an employee came to me with a salary increase request. He wanted to buy a house and could not afford it without a higher salary. I did not grant him the higher pay so he left the company, but it made me contemplate about the relation between the level of salaries and the housing prices. They were getting out of sync fast. But housing prices only kept on rising after that, and at a much faster pace than the average salary increase.

Last year one of my best employees had a similar problem, she and her husband realized they would never be able to afford their own property in Shanghai and decided to go back to their hometown. There were more jobs there now and even though salaries were lower, they would have much more spending power and could afford their own house. Since then I heard similar stories from other entrepreneurs, many of their best people want to leave after a few years because the quality of life in secondary or tertiary cities is much better than in Shanghai.

For companies this can lead to serious problems. Wages have gone up tremendously over the past years. Starting salaries right out of university are still roughly the same, mainly because there is such a huge supply of fresh graduates. But if you want to keep the good people you need to give them wage increases of at least 15% per year. Over the past 5 years salaries for top managers have roughly doubled, and people will leave if they don’t get what they feel they deserve. Some top programmers now earn more than good programmers would earn in my home country Holland.

Friends running businesses in Shanghai are increasingly talking about setting up branches in China’s inner provinces. There salaries are still a lot lower and there is a lot more talent now than just a few years ago. That leads to additional costs, but it may offset the higher wages that they would have to pay in Shanghai.

My strategy has always been to hire good people out of university and pay them average salaries. Not top salaries, so you weed out the people that only work for money; they should also like their job and the good work environment that I am trying to create. You have to teach these employees a lot, because Chinese universities give them tons of knowledge but not necessarily the knowledge needed to work in the real world. The best people get high salary increases so they won’t be tempted to leave, and the ones that are average performers still get increases of 10% or more. This means that even the average people stay at least 2-3 years, which is quite long for job-hopping China, and good people stay even longer. Because the entry salaries didn’t increase very much I was able to keep the increase of total salaries relatively low.

But many companies do not want to hire people right out of university because of their lack of skills. And they are the ones that may be in trouble soon, because not only has their total salary cost more than doubled over the past years, but they are also still losing their employees because they can’t afford to live in Shanghai anymore. China is not a cheap labor destination like it used to be, and certainly not the big Chinese cities.

Because the countryside has developed a lot over the past years and many factories have moved from the East coast to inland China, there are a lot more job opportunities in smaller cities. I expect that over the next couple of years many white-collar workers will choose to leave cities like Shanghai to work in their home provinces. Similar to what has happened to blue-collar workers over the past years as well, they can get similar jobs and salaries close to their home towns now so they don’t want to work on the other side of the country anymore.

There are signs that this may happen sooner rather than later: in Saturday’s English-language newspaper the Shanghai Daily a reporter wrote that so far 90% of the domestic staff did not return from their hometowns to Shanghai after Chinese New Year. Last year the figure was around 30% at this time. And the staff that come back are asking for wage increases of up to 30%, meaning that a full-time cleaning lady now earns around USD 500 per month. If these people are now all staying in their home towns because of better economic conditions very soon their white-collar colleagues will follow their paths.

What does that mean for a city like Shanghai? Companies won’t leave, but they will likely move part of their operations inland. Probably the upward pressure on salaries will be less and this may have an effect on the housing prices as well. Many new apartments are currently empty waiting for real estate prices to increase further, so they can be sold at an even higher price. But if apartment owners realize that there are simply less people who can (and want) to buy them this may change. The sudden end of a bubble? Maybe. After over a decade in China I have learned that things can change fast here.

After lunch walk around UnitedStyles.com

Today was a beautiful day, but because I worked the whole day at UnitedStyles I couldn’t really enjoy it. But after a heavy lunch (hamburgers from Pete’s Tex-Mex…) Joop and I decided to talk a walk to at least enjoy the sunshine a little bit.

I had never taken a walk in the area around the UnitedStyles office before, even though the company has been here for a couple of months already (I normally spend most of my daytime hours in the Spil Games Asia office). Because the current UnitedStyles office will be demolished soon to make place for new buildings I though it was a good time to check it out. It’s actually quite an interesting area, with both old and new residential buildings, some slums and even an old Catholic church!

Catholic Church on Hami Lu close to UnitedStyles, built in 1925

The church was built in 1925 and is located right behind our office on the other side of a small river (on Kele Lu, close to Hami Lu). I had never seen it because there is a big building in between the river and our office, and was amazed at how beautiful it was. The gates were locked so Joop and I could not enter the church grounds, but it looked renovated from the outside. A sign said that it was built and designed by Hungarian architect Ladislaus Hudec as a ‘country church’, a reminder of the fact that this suburb of Shanghai used to be far outside the city in the old days.

Also villa compounds get demolished in Shanghai to make way for new buildings

Not far from the church we found another compound that was being demolished, not an old office compound like ours but a villa compound! Never realized that they demolish these as well. I wonder what compensation the owners get: prices for villas in this area are pretty high, 2-3 million EUR is a normal price for a house.

Street close to UnitedStyles

I always thought there was just one small river in Hongqiao, but it turns out there are actually 2 (it’s one river that splits into 2 right behind the church). The water does not seem to be very clean, but it would be nice to get a small boat once and just float (or paddle) downstream. It’s probably not allowed, because I have never seen any boats in this area.

Slums close to UnitedStyles.com office

We also walked through some of the slums that are located on the bank of the river close to the office. Many of them are more like temporary shelters with just some plastic sheets as a roof. I am sure these too will be gone soon when they demolish our office. Quite a nice area actually with lots of tiny shops and restaurants, especially on a sunny day; but probably less so when you live there.

It was a nice walk, glad I did it. If you want to see it for yourself before it will be gone, the area is located around Hami Lu directly to the North of the Shanghai Zoo.

Hami Lu - where UnitedStyles.com is located

Is Groupon trying to get kicked out of China before it even gets started?

Dumb, dumber, dumbest. Of all the US Internet companies that have been trying to enter China it looks like Groupon is making the dumbest mistake, and that even before it officially launches here.

Over the past weeks I have followed Groupon trying to set up its business in China. Not only from the press, but also from friends that interviewed there for one of the 1000 jobs that they plan to fill over the next couple of weeks, and of course from things I heard from other Groupon clones. I actually gave them a decent chance because of their plan to partner with Tencent and their commitment to invest hundreds of millions of dollars in the Chinese market. The fact that the biggest Chinese clones are working together to compete against Groupon could be a potential problem, but one that can be solved with the amount of money Groupon has available.

But now they dug a big hole for themselves to fall into: how stupid can you be to air a pro-Tibet commercial during the Superbowl to promote your company? Not only does it upset a lot of their US customers, but it may get Groupon China in trouble as well. Tibet is one of the most sensitive issues in China and whatever you think about it, you should not touch it as a foreign company if you want to run a business here. Given the size of Groupon’s investment the company is surely on the government’s radar and they will see this ad as well. And what would Tencent do? Would they risk working with a partner that is making beginners mistakes even before any contracts are signed? To be continued, I am sure.

Chinese New Year’s Eve 2011

Happy New Year!In China tonight is New Year’s Eve and I just finished a huge dinner with the family. Because all our domestic staff went home to their families we hired a cook to make us a nice (and very big!) dinner. Among others codfish, shrimps, soup with crab meat and shell fish, beef soup, fried beef, deep fried spicy pork, and many, many kinds of vegetables. Excellent – we should hire this cook full time!

Outside there are a lot of fireworks already, even though it’s not even 9 pm. Scott is not sure whether he likes it or not. He likes the sound but only when we are around. He will go to bed very late and sleep in our bed tonight, otherwise we’ll probably have to run to his room every 15 minutes to calm him down. Elaine doesn’t really care too much about fireworks yet, once she falls asleep she will probably sleep through most of the noise. But at 12 I am quite sure she’ll wake up, from my experience China then turns into a war zone with everybody setting off all the heavy fireworks at once.

We will now visit some friends with Scott so he can play with his Chinese-Italian girlfriend, after that we’ll watch the CCTV New Year Show with my wife’s parents while having Chinese snacks and drinking wine (not Chinese wine – at least not for me). Not sure whether we’ll be making jiaozi (=dumpling) tonight, which is a tradition. For sure I won’t stay up the whole night, that’s a tradition others can follow.

A Happy Year of the Rabbit to all readers!

Fontainebleau State of Mind

If you did your MBA at INSEAD in Fontainebleau or plan to study there in the future, you will surely enjoy this Tudou video. It’s making fun of life in Fonty (INSEAD speak for Fontainebleau) and all things happening there to students working hard and partying harder. It’s a great clip that gives a glimpse of student life on and off campus (make sure to listen to the song text!). Bonus: if you watch the clip until the end there a couple of bloopers next to the credits. Enjoy!

Update: The clip is also available on YouTube in case you’re outside China at
http://www.youtube.com/watch?v=OwlQJ41Ano0

Looking for an exclusive golf tournament? Here is one

North Korean Open - probably one of the most exclusive golf tournaments in the worldAbout 10 years ago I spent a week in North-Korea as a tourist, it was one of the strangest vacations I ever had (see for more on this trip here on Quora). But it’s also one of the few holidays that I will probably never forget, being inside the Hermit Kingdom left a deep impression on me – and not necessarily a positive one. It’s not a place I would immediately think of for a relaxed holiday, but it seems a tour operator is trying to do that by organizing a trip to the DPRK Amateur Golf Open in Pyongyang.

The trip consists of a 3-day sightseeing tour of the standard tourist locations in North-Korea followed by the golf tournament itself. I remember our North-Korean tour guide talking about the golf course back in 2001 but I never imagined that the government would organize an international tournament there. But that’s exactly what will be happening from April 26 to April 30 this year.

I just hope for the competitors that “The Dear Leader” Kim Jong Il won’t participate, because legend has it that when he opened the course in 1991 he shot a 38 under par with 11