Friday, December 14, 2012

The BIG Question

A frequent topic of speculation for me during my years of drinking in Beijing bars has been... Can you can make more money off Chinese or foreign customers?

It's a question of vital importance for any bar owner or prospective bar owner.

Although there is a broad spectrum of personality types and spending patterns in both demographics, my instinct would be that you can in general make much more off foreign punters.

The key exception that might skew the analysis a bit is your Chinese high-roller type who will order premium spirits (or wines, champagne) by the bottle, just to flaunt his wealth - and perhaps not even drink it all. However, this type of punter brings his own problems. They're often quite brash and obnoxious types, who will treat staff contemptuously, and perhaps annoy other customers with their loud and boorish conversation. And if they do drink heavily, they're quite likely to get dangerously sloppy - perhaps even start a fight, or throw up in the middle of the bar. And it's distressingly common for this sort of punter to 'forget' to settle their tab, or to quibble about it. You also have to bear in mind that they're perhaps treating quite a large group. You might be initially quite excited when someone orders a bottle of Chivas - but when you realise that means you're going to have a group of six or eight Chinese patrons hogging your best table all night, and that quite possibly none of them are going to order anything else, it really isn't such good news. Especially if they end up making an ugly scene.

Most Chinese are still unfamiliar with Western bar culture, and not really all that receptive to it. They'll dabble in it because it's become a hip thing to do for students and young professionals. But most of these people have fairly little disposable income, and a negligible tolerance for alcohol. Moreover, they rarely seem to recognise any ethical constraints about being obliged to spend money in your bar. Venues like Starbucks and McDonald's have become hugely popular hangouts for the young because they usually leave you unmolested all day long, never requiring you to buy anything. This free-and-easy attitude in two of the most ubiquitous foreign franchise businesses here has perhaps encouraged young Chinese folks to believe that it is normal and acceptable to occupy space in a venue for hours at a time after making only one token purchase - or no purchase at all (and to use the bathroom without making a purchase, too!). It is quite common for one person in a couple, or only two or three people in a group, to buy a drink, and assume it is then all right for them to occupy a table indefinitely. This might not be all Chinese customers, or even the majority of them; but it is a common enough phenomenon to cause serious aggravation for a poor bar owner.

And even the good drinkers amongst the Chinese - enthusiasts of good beers, wines, or spirits; people who'll spend quite heavily, but without exceeding their physical tolerance - are rarely going to spend as much as your average Western drinker, I think. They haven't been doing it since their early teens, haven't built up such a prodigious appetite - or the capacious gut - for it.

I'd guess that quite a large proportion of Chinese punters will spend little or nothing; and while there are a few who will improve the average substantially by spending in the high hundreds, the typical Chinese spend per head is probably a lot less than 100 rmb, perhaps not much better than 50 rmb. Almost all foreigners, even the modest drinkers and teetotallers, will order at least a couple of drinks... and then leave when they feel they've had enough, not stage a sit-in for hours. Heavier drinkers may well take up residence for much of the evening, spending steadily over an extended period. I pretty regularly spend 200 rmb, even on a fairly slow night, and sometimes go through twice that much. And I'm hardly a high-roller: I don't order cocktails or top-shelf whiskies very often. I'm just your typical enthusiastic pisshead. I suspect the average spend-per-head of a foreign bar punter here is well over 100 rmb... and perhaps, in some bars, over 200 rmb.

So, it does seem there might be a powerful economic argument for favouring foreign customers over Chinese ones. I certainly think that (unless you're running a nightclub, which is a whole different ballgame) it must be very difficult to make a decent income from a wholly Chinese clientele (although exceptions prove the rule: Reef on Nanluoguxiang seems to be managing it).

But, of course, you can't very well take overt steps to exclude any particular group of punters. Fubar's English-only drinks menu appeared to be sending some such message, that Chinese punters weren't particularly welcome, and it was not something I was comfortable with. (Although I have been notoriously - and unashamedly! - lazy about learning much Chinese myself, I think it is a bit rude to your host country not to offer service in Chinese as well as English if you're running a business here.) However, the only place I ever heard of trying to actively discourage Chinese punters was the Chinese-owned No Name Bar down by Houhai (and I suspect that was an exaggerated rumour, catching fire from the spark of one or two cases of particular customers being excluded).

You can effectively target a Western or Chinese clientele by your decor (Chinese, for the most part, don't get the wooden bar vibe; Westerners, for the most part, are fairly indifferent to soft furnishings) or the facilities provided (cheesy Chinese folk-rock performers and/or a karaoke stage go down big with the local punters; as do dice and playing cards, so that they can lose themselves for hours in noisy and pointless but strangely addictive games, rather than having to make the effort to sustain a conversation). And the pricing - most young Chinese will be discouraged by higher prices (although a lot of us less affluent foreigners will be too!).

There are some bars in Beijing - long established expat favourites like The Den, Frank's Place, Eudora Station, and the Goose & Duck (or some newer places in a similar vein, like The Irish Volunteer) - where the only Chinese people you'll usually see are WAGs or staff members. I've never felt very comfortable in places like this. Then again, I can't stand most of the bars on and around Nanluoguxiang these days: bars which prove strongly alluring to Chinese patrons tend to be deeply unappealing to me (it's not the Chinese patrons I mind, it's the things Chinese patrons seem to like!).

My favourite bars over the years have been ones that somehow managed to appeal to a good mix of foreign and Chinese punters: Huxley's, Reef (in its early days; it's rather lost its foreigner appeal now), Pool Bar, Salud, and, of course, my best beloved 12 Square Metres. I'm not quite sure what the secret is. I suspect it's something to do with being more Western than Chinese in style, but having a level of pricing reasonable enough not to drive away Chinese custom... and perhaps also with being sufficiently off the beaten track that their expat constituency just isn't large enough to establish an exclusive dominion. A bar in Sanlitun or Lido can easily establish itself - not necessarily by design, but by natural evolution - as essentially an 'expat only' kind of place; in my neighbourhood, it can't - and I'm grateful for that.

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