- Zhang Yong’s restaurant chain Haidilao Hot Pot granted him a net worth of $13.9 billion in 2019.
- This makes the Chinese-born billionaire the richest man in Singapore, a country in which half the population is in the world’s wealthiest 10%.
- Zhang was born into poverty in a backwater town in Sichuan, China.
- He started his famous chain after visiting a local hotpot restaurant for the first time as a young adult and having a terrible meal.
- His restaurant chain Haidilao Hot Pot is not only known for its spicy food but also its unique customer service approach, which includes offering free manicures to waiting for customers and a free shoe-cleaning service.
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Thanks to a global empire of hotpot restaurants, Haidilao founder Zhang Yong is now the wealthiest man in Singapore— a country in which half the population is in the world’s richest 10%.
Zhang, who was born into poverty in a rural part of China, borrowed money from three friends to start his own hotpot restaurant, quitting a factory job that paid him a meager $14 per month.
Haidilao Hot Pot, known for its spicy dishes and unique customer service that includes offering free manicures for waiting customers, grew into an international chain that turned Zhang into a billionaire. Today, the chain has 466 stores in over 100 cities.
As of September 2019, Zhang has a net worth of $13.9 billion, according to Forbes. Here’s how the billionaire got his start and built one of the largest restaurant chains in the world.
Zhang Yong, 49, lives in Singapore, and with a net worth of $13.9 billion, is the richest man in the country.
He moved his family from China to the South-east Asian country in 2018, where he became a naturalized citizen and took up a Singaporean passport.
In Mandarin, his name Yong means “courage.”
Zhang was born in 1970 in the rural county of Jianyang, which is located in China’s south-western Sichuan province.
In a 2019 meeting with members of the business management program at Hupan University, Hangzhou, the entrepreneur said his childhood was marked by poverty and hunger.
“I’m from the countryside, where rural people believe that if you take money from other people and you don’t bring benefit to them, then you are a liar,” he told the Wall Street Journal in 2013.
Most of Haidilao’s employees in China are young people from rural towns with limited education. In a 2011 interview with Chinese newspaper The Economic Observer, Zhang said: “Why is it that I can understand my employees? It’s because of my values, as well as what I experienced when I was 14 or 15.”
The Chinese billionaire earned his fortune from Haidilao, a global hotpot chain that he started in Sichuan as a young adult, which now has a cult following.
In 25 years, the chain grew from one store in Zhang’s hometown to over 460 stores worldwide, with branches in the US, UK, South Korea, Japan, Australia, Canada, Singapore, and Malaysia.
In Mandarin, the word haidilao means “scooping for treasure at the bottom of the sea.” Players of the popular Chinese tile-based game, Mahjong, also use the term to describe a lucky move where a player wins the round by using the last tile available.
As a teen, Zhang educated himself by reading international books from his local county library – a rare find during a time where the communist government was only making propaganda books available.
Zhang told The Economic Observer that as a teen, he turned to reading in an effort to escape his social awkwardness.
He told the paper: “When I was 14 – a time when most men’s voices break – my voice didn’t break. I became unsure of myself and very nervous, I didn’t dare talk to girls.
“Up until now, I still don’t know how to dance,” he added.
Until the 1980s, the library in Zhang’s county only contained propaganda books, but new ones were brought in from overseas between 1983 and 1984, including history books and poetry penned by famous Indian author Rabindranath Tagore.
Zhang said that after reading these books, he realized he was “ignorant and dull.”
As a young man, Zhang worked as a welder in a government-run tractor factory for six years, earning only 93 yuan ($14) a month. At the age of 19, Zhang had his first-ever restaurant meal — at a hotpot restaurant.
The South China Morning Post reported that Zhang dropped out of high school, graduated from a vocational school in Chengdu, and then worked at a local tractor factory for six years.
One day, he decided to eat at a proper restaurant instead of the company cafeteria. He went to his very first hotpot restaurant but thought that the food was sub-par and the staff were rude, leaving him convinced of the value of excellent customer service, according to Bloomberg.
After getting into a disagreement with his employer, Zhang quit his job and borrowed money from three friends – including his wife – to open a small restaurant.
Bloomberg reported that Zhang quit the factory after being denied a company apartment he had intended to share with his then-fiancee, Shu Ping, and decided to open a hotpot restaurant.
He borrowed about 10,000 yuan ($1,500) from Shu and friends Shi Yonghong and Li Haiyan to fund it.
Zhang told the Economic Observer: “I was penniless, so the others were the real investors.
“I promised the others that our assets would grow to 150,000 yuan ($21,500) within five years. I swore that if I couldn’t manage it, I would compensate them.
“That was a huge amount of money for a group of twenty-somethings in the 1990s, so they were all a bit startled.”
Their little loan to Zhang has since made Shu, Shi, and Li billionaires, according to their profiles on Forbes.
Zhang attracted customers to his four-table restaurant by advertising free snacks and excellent discounts.
Zhang said that he did not know how to make hotpot well, so he focused on excellent service instead.
“I personally made sure that any guest who came through my door would return,” he later told Forbes.
Four years later, he opened his third store in central China, but it failed.
Within months of opening, Haidilao was the largest hotpot store in Jianyang, and Zhang was able to open a second outlet.
In 1998, a friend suggested partnering up to open a third outlet in Xi’an, but the store suffered losses of 300,000 yuan ($43,000) within half a year.
Zhang attributed the failure to his absence at the outlet. “Since then, we have never partnered with others,” he said.
Other than wanting to treat his customers in the best way possible, Zhang never had a business strategy. He simply wanted to escape the poverty that he had lived through during his childhood.
Zhang once recounted how a childhood friend was murdered by his own mother with rat poison after his father left their family and she couldn’t make ends meet. The mother later committed suicide.
This incident profoundly affected Zhang, whose outlook on life was forever changed.
During his visit to Hupan University, he said: “People ask why I started Haidilao and what my business strategy was, but I didn’t have one.
“At the time, I was only thinking: I want to change my fate of being born into poverty, and have a slightly better life than the average person.”
“Haidilao’s mission, vision, and values are one and the same: change your life with your own hands,” he added.
To do this, he had to start by earning money first.
Between 2011 and 2012, Zhang returned to school and completed two MBA programs in Beijing’s Cheung Kong Graduate School of Business.
Zhang’s wife Shu also returned to school to achieve two MBAs, one from the Cheung Kong Graduate School of Business in 2015, and another from Shanghai Jiaotong University in 2016, according to the Haidilao website.
Eventually, Haidilao’s reputation for incredible service shot it to fame, with customers raving about thoughtful perks like free manicures, hot towels, and even menstrual pads in female toilets.
Other special services include free leather shoe cleaning services, massage chairs for waiting customers, and children’s playrooms. While dining, customers are often given snacks, fruits, and games. They are kept entertained with different performances or have chefs come to their table to prepare food.
In 2018, Zhang told Forbes that Haidilao was opening a new restaurant every three days, with outlets breaking even within one to three months.
He added that this global expansion was driven by foreigners’ curiosity in Chinese culture and food.
Zhang credits the chain’s ability to maintain its legendary service to a policy of promoting internally and paying staff fairly, based on their workload.
Zhang told Bloomberg that Haidilao often promotes staff to management roles, and seldom hires outside the organization. Its CEO, Yang Xiaoli, famously started out as a waitress.
Employees get wages far higher than the industry average, as well as perks like free accommodation and apprenticeship programs — resulting in an impressively low turnover rate of 10%.
Zhang said that as the number of customers soared, he felt it was only fair to increase salaries, as staff had heavier workloads.
Speaking at Wuhan University, the billionaire said: “The staff weren’t as happy as they could have been when the business did well, because they might have gotten a 100 yuan ($14) raise, but put in an effort worth much more than that.
“I felt that was not right… and that’s why I devised a better remuneration system in 2014.”
Zhang moved to Singapore that same year, where he lives with his family in a bungalow worth S$27 million (US$20 million).
The Business Times reported that Zhang’s designer home, named “The Winged House,” is located near the Botanic Gardens, a Unesco World Heritage Site in Singapore.
The uniquely-shaped triangular plot has two storeys, a large garden and outdoor seating area, a pool, and five bedrooms.
In 2019, Zhang’s shot to #1 on Forbes’ list of Singapore’s richest people, a feat that didn’t impress everyone. The billionaire attracted some criticism online by Chinese people who felt betrayed by the businessman emigrating.
Before emigrating, Zhang ranked 19th on Forbes’ 2018 ranking of China’s richest people, making him the country’s wealthiest restaurateur.
After the move, his incredible net worth of over $13 billion helped him steal the top spot on Forbes’ list from property tycoons Robert and Phillip Ng, who had dominated it for the past decade with a combined net worth of $12 billion.
The ranking, however, took Chinese people by surprise, as few were aware Zhang had emigrated, South China Morning Post reported.
Many called for a boycott of the chain, upset that the founder had seemingly ditched the place that made him rich.
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