Low-cost pizza model takes hold in China

Feb. 3, 2004

SHANGHAI, China—In a market where pizza not only is relatively novel but priced at a premium, French émigré Anthony Le Corre's three Hello Pizza units are making a bargain-basement price move that mirrors similar thinking dominating the American pizza industry.

According to the Wall Street Journal, Le Corre's operations sell pies for as low as $1.20—about one third the price charged by many competitors.

To sell them so cheaply, Le Corre runs bare-bones operations supplied by a single commissary which pre-portions all toppings and places them in Ziploc bags.

Annual revenues from his three units total about $500,000 a year.

Le Corre opened a pizza restaurant several years ago, but he found it got lost in the crowd of others. Distinguishing Hello Pizza, he believed, would have to center on turning a product viewed by Chinese as a fancy Western treat into something inexpensive enough to enjoy every day.

"In China, quality is the opposite of cheap," Le Corre told the Journal. "The secret of my business is not what I put in the pizza. The secret is consistency, providing the same thing from Monday to Sunday."

Each Hello store seats about 25 customers, but delivery—done on bright-yellow electric bicycles--accounts for more than half of sales.

Hello's menu offers 20 different pizzas ranging in price from $1.20 to $4.20 each.

"People want not only low price, they also want choice," Le Corre said.

Toppings such as curried chicken, cherries and Thousand Island salad dressing cater to Chinese tastes.

Le Corre believes in rotating new selections on and off the menu regularly.

"Don't be afraid to kill off old products," he said. "Even if a product sells well, people will get sick of it."

Topics: Independent Operation , Marketing

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