SCMP Thursday, November 8, 2001

China's Suns shine again

MARK O'NEILL in Beijing

His maternal grandfather commanded the Chinese forces at the Marco Polo Bridge in Beijing that were attacked by Japan in July 1937 to start its invasion of China. His paternal grandfather received the surrender of the same Japanese forces in the Forbidden City in Beijing at the end of World War II. Now, Andrew Sun and his brother David have returned to Beijing, via Hong Kong, California and Taiwan. Andrew is managing director of Thank God It's Friday (TGIF), the upmarket US restaurant, and David runs US coffee shop chain Starbucks.
"We were one of the generation of Chinese that left in the 1960s and 1970s and among the pioneers of the generation that returned," said Andrew, sitting in his restaurant, with its trademark red-and-white tablecloths and wooden panels, that overlooks the third ring road in northeast Beijing.
"I have purchased an apartment here, for US$300,000, of 100 square metres in the Asian Games Village. I like to buy apartments where I have a base. I have one in Taipei and another in the Bay area [of San Francisco]. My wife and I feel comfortable here. We can get everything we need.
"Taiwan was the new frontier when we went there in the late 1970s, and Beijing is the frontier now. You go where there is a challenge and economic opportunity."
Andrew was born in Hong Kong in 1954, one of four sons of an officer in the Nationalist army who chose not to follow Chiang Kai-shek to Taiwan after the Communist victory, and taught Chinese to foreigners at the University of Hong Kong. He attended La Salle school until 1966 when the Cultural Revolution broke out in China, causing riots in Hong Kong. The family emigrated to the United States, settling in the San Francisco bay area where an aunt was living.
His father washed dishes in a restaurant and sold clothes, while his mother worked as a maid in a hotel. "He was very pragmatic. You do what you have to. We needed money. There was no issue of face involved." Helped by the English he had spoken at La Salle, Andrew adapted easily to his new life and new school, where the curriculum was easier than in Hong Kong, and he greatly enjoyed the opportunities for sport.
"I never encountered racism or harassment. China was very far away. I was not concerned about it." After graduating from high school, Andrew went to the American University in Washington, DC, where he studied administration of justice, with a minor in economics, with the aim of becoming a lawyer.
By the time he graduated, his father had established a trading firm which imported products from Taiwan and sold them in the US. In 1978, his brother went to Taiwan to develop the business and Andrew decided to go with him. "It was a lark, an opportunity to travel. It took me a year to get used to it. It was hot and the power went off during typhoons. It was the beginning of the Asian boom. The sky was the limit, if you had clear objectives."
They started with character merchandising, such as those of Snoopy, Garfield and Hello Kitty, now old hat but then a new concept. Andrew was in charge of production, flying all over Asia looking for goods.
Exhausted by the travelling, he began to look for a more settled business and applied to launch fast-food chain McDonald's in Taiwan. "There was a lot of competition. In the first round, we were not selected. But the company chosen could not get government approval after a year of trying because foreign investment was not allowed in restaurants. It had to be in manufacturing.
"So, working with a law firm, we came up with the idea of a factory making shredded lettuce. That was manufacturing. The restaurants were the end-users of the product. The government accepted this. I and my colleagues had a year's training in the US before we opened our first outlet in Taipei in January 1984," he said.
Asked if gaining the approval involved giving bribes to officials, Andrew said that, as a US company operating under a worldwide anti-corruption law, this was never done.
Since the family held 50 per cent of the joint venture with McDonald's, it meant investing millions of dollars of its own money. "It was a brand new concept in Taiwan. No one likes McDonald's actually, but it was an alternative - clean, fast and good value. We targeted young families with children."
Business boomed, and by 1992 they had set up 77 outlets across the island, when a blackmailer attacked the firm with three mercury-switch bombs. Two went off, with one killing a policeman and another wounding a company manager. The man demanded NT$6 million (about HK$1.35 million), which he wanted to give to his Filipina girlfriend.
The firm offered a reward of NT$12 million to catch the man and was forced to shut down its operations for 20 days.
"It changed our lives. I needed a bodyguard for some time and we sent our families out for a while. We worked 24 hours a day. David and I lost interest and sold our share to McDonald's," he said. The Taiwan police caught the blackmailer within a month and he received a long prison term.
Andrew returned to California and took a year off to travel, play golf, study and mope. By 1994, another brother, John Sun, had launched TGIF in Taiwan and the opportunity arose to do the same thing in Beijing.
"We knew the restaurant business, in the international arena, and the local and parent culture. Some of my friends and family said we were crazy and that it was too expensive."
Andrew went with eight colleagues to Minneapolis for three months of training and opened the first branch on the third ring road in Beijing on December 18, 1995. It is a joint venture with China Aeronautical Technology Import and Export, which owns 35 per cent. The Suns own 65 per cent.
"It was not like Taiwan, in building materials and codes and concepts of management and service. The staff are easy to train, since they are well educated and eager to learn. In-house training is the key, you must foster your own culture. Here it is show-time every day. It is like being on the stage. Each time you must be at your best." He manages between 250 and 275 people in two restaurants, with a third due to open in the Friendship Hotel in the university district in northwest Beijing.
"In the first three years it was not profitable. We poured the money back. It is a different concept to McDonald's. This is medium to high-range dining, costing an average of 100 yuan [about HK$93.7] per person. We aim at the top 5 per cent of the population. Our clientele is 80 per cent local and 20 per cent foreigners, the opposite of what it was at the start."
In 1998, the restaurant made headlines when a copycat named Saturday opened next door, with an eclectic menu and decor. A Beijing newspaper published a photograph with the two brands together.
There was consternation in corporate headquarters in Dallas. "They asked me what I was going to do. I said 'nothing' and told them to calm down. It was excellent publicity." The copycat closed after six months.
He said Beijing was not a difficult business environment. "The rules and regulations are very clear and transparent. We have contacts we can talk to."
Brother David joined him in Beijing in 1998 and has opened more than 25 Starbucks in the capital and two in Tianjin. He also has bought an apartment in Beijing.
"The coffee shop is replacing the local bar. People are becoming more health-conscious. In my restaurant, sales of hard liquor are falling and those of cocktails are going up." Nothing has changed for them since the terrorist attacks in the US on September 11. "There is nowhere safer than Beijing."