China success down to get up and 'go go go'

Gung Ho! Pizza co-founder Jade Gray says the potential for doing business in China is there but...
Gung Ho! Pizza co-founder Jade Gray says the potential for doing business in China is there but it is not an easy market. Photo by New Zealand Listener.
From working in a skifield to running a farm and then establishing various businesses in China, Twizel-born Jade Gray has packed plenty of adventure into his life. He talks to business reporter Sally Rae about everything from pizza to doing business in China.

Visit Gung Ho! Pizza in Beijing and there is a constant catchy cry in the air.

It takes a little bit for a Western ear to pick up but it is ''Go go go'' - the catch phrase of the company, which is uttered by staff every time a delivery person leaves the premises.

It could also accurately sum up the life of Jade Gray, the enterprising co-founder of Gung Ho! Pizza, who is always looking for a new adventure.

Not content to rest on his already successful business laurels, his latest focus is on developing a business which can be used as a sustainable development blueprint for other companies in China.

It is pioneering stuff set amid the hustle and bustle of Beijing which, with its more than 20 million inhabitants, is a far cry from Mr Gray's early years in Twizel, where his father Alan owned a supermarket.

When Mr Gray was a preschooler, the family shifted to Dunedin and a subsequent house-truck adventure overseas with his parents and two siblings was to have a major impact on his life.

Gung Ho! Pizza changes its boxes every three months, inviting a local artist to come up with a...
Gung Ho! Pizza changes its boxes every three months, inviting a local artist to come up with a design and feeding them pizza in return, with the requirement that it has to celebrate Beijing. It is dubbed its 'starving artists' campaign'. Photo by Sally Rae.
''I'd been in Twizel, New Zealand. As you do as a kid, you think that's the world and then, at 7, I spent a year in a house truck travelling around Europe and you pretty quickly realise that New Zealand is not the world.

''I think I got the bug then to go overseas ... It changed my whole perspective on life,'' Mr Gray (38) said.

He completed his secondary school education in Christchurch, where he was deputy head boy at Christ's College.

In 1993, he received a year-long Nomad scholarship to attend Haileybury Imperial Services College in London and it was there his interest in China was spawned. A teacher asked him what he wanted to do for a career. He knew he wanted to be involved with international business - his parents both had business backgrounds - and because of the ''bug'' he got as a child, he knew he wanted to be overseas. His original business focus was on Europe and the United Kingdom, but his teacher told him the future was in Asia and suggested he learn an Asian language.

Mr Gray enrolled in marketing at the University of Otago, believing it was the ''closest thing'' to business. He also looked at Asian languages and had the choice of Japanese or Mandarin.

Back in 1994, Japanese was ''all the buzz'' but it lacked any allure for Mr Gray.

''For some reason ... it had been done. It wasn't adventurous enough and I was looking for an adventure as well.''

He did some research and decided to ''take a punt''. He thought China sounded adventurous - and it was big.

Mandarin didn't come easily for him and he recalled how he was 60th out of 60 in his first year, about 16th out of 18 in his second year and sixth out of six in his final year - ''so I figured I was in the top 10% of my course'', he said, laughing.

The language might have been tricky, but he was always passionate about the adventure of China and what it could mean. In his second-last year, he decided he wanted a first-hand opportunity to practise his Mandarin.

His style of learning was about people and ''getting in there'', so he decided to spend his summer holidays in China and ''get amongst it''.

He had completed an instructor's course at Treble Cone and thought a ski trip to China would be ''a bit of a laugh''.

So he headed to China, ran out of money, having discovered skiing there was much more expensive than he imagined, and ended up working at a skifield. He spent the winter there and it fuelled his passion for the country.

After graduating from university with a marketing degree and a diploma in Mandarin, he became involved with a joint venture set up in northern China, involving Angus cattle stud Te Mania.

He had a ''crash course'' in farming for six months before about 300 cattle were flown to China.

He was farm manager for the operation, which was about a $5 million investment.

''That was tough ... To be honest, that was definitely probably the most challenging part of my life. That was really soul-searching stuff and I was out there by myself, surrounded by no foreigners ... It was bloody tough times.''

But while the project itself was challenging, he did learn all about ''the real China''.

He moved back to New Zealand, having sworn he would not return to China, but eventually got a call from Otto and Sons International, suppliers to the McDonald's fast food restaurant chain, offering him a job.

So he returned and later became involved in building a gym franchise in Beijing. That had a ''dream run'' for about three years until the outbreak of Sars. The Government closed down communal spaces for about three months and, to make matters worse, about 95% of his target market was foreign students and they fled the city.

While it was a rough time, Mr Gray saw an opportunity in Beijing in the retail spaces in prime locations which suddenly became available.

''Everybody closed shop and left. I decided to stick it out,'' he said.

He decided to get into the food and beverage industry. Lush - a cafe-bar which he modelled along ''Wanaka-style'' lines - celebrates its 10th anniversary this year.

He opened a pizza joint next door and a nightclub and sold his shares in the gym franchise, as he felt hospitality was more his style.

Gung Ho! Pizza was the brainchild of Mr Gray and business partner John O'Loghlen, originally from Auckland, their first store opening in 2010.

Pizza was an obvious choice for the pair. For Mr Gray, it was the food he was most passionate about, and it was something he associated with ''mates, drinks, fun times''. He also described pizza as a ''global comfort food''.

Mr O'Loghlen was working for pizza heavyweight Dominos at the time, in charge of franchising in Asia, so had a background in the industry.

But they needed to find a niche and they were not resourced to open large pizza restaurants.

They felt restaurants had been ''well thrashed'' but that delivery was the future of pizza in China.

A combination of increasingly busy lives, worsening traffic, many young people not being able to cook and higher incomes meant a ''perfect storm'' for delivery. They also wanted to provide gourmet fast food, a niche product.

On reflection, the pair had ''got it right'', with deliveries going ''gangbusters''.

''It's incredible, the whole market the last two years has completely blown up. It is the future of food and beverage in China right now,'' Mr Gray said.

Along with that came a lot of competition, but he took a philosophical approach to that.

''If you get a lot of competitors, it shows you're in a hot space, and we were one of the earlier ones to get into that space.''

The term ''gung ho'', which means ''enthusiastic'' or ''dedicated'', was brought into Western currency by New Zealand-born writer, educator and social reformer Rewi Alley, a key figure in the establishment of the Chinese industrial co-operatives.

Mr Gray candidly admitted it had been a ''hell of a journey'' and they never underestimated the challenges.

''We don't presume we're going to be around to face another day. Every day you're on the edge; that's just the reality of China.''

Asked about the challenges of running a business in China, he said for those entering the market, their challenges were going to be ''just China''.

''Just the whole overwhelming shock of the place. You don't know where to start.''

Others included culture, language and ''just getting a foothold in the market, getting that first profitable deal, how to get your head above water''.

Talent was a major challenge and managing relationships was ''by far the biggest challenge yet''.

''Get your people strategy right in China [and] you're well on your way to succeeding. Don't underestimate the importance of the whole people strategy.

''China is built on relationships for a reason and you've got to nurture those relationships. It doesn't necessarily require a lot of cash but it requires a lot of attention.

''People strategy is the key to China, I believe ... and also your own expectations. People come here with quite misguided expectations or unrealistic expectations.

''China's not for everyone. That's the first decision you've got to make - is China for you? Don't get sucked up in this whole China story.

''I'm yet to meet someone who's made a quick buck ... absolutely the potential's there, but it's not an easy market,'' he said.

For Mr Gray, business was about attitude, not about a product.

''It's why you're doing it, what is it that gets you excited about it?''

There were now three Gung Ho! Pizza outlets, with two more being built, along with Lush and Pyro pizza. He also has an events management company, which throws dance parties across China.

There were more than 200 staff employed across all the businesses, 132 of them employed at Gung Ho! Pizza. Staff were housed, fed and insured.

Shares in the company were also sold to employees, which was ''unheard of'' in China.

About seven employees had bought into it and it was hoped that number would increase.

Mr Gray expected turnover this year for Gung Ho! Pizza to be between $NZ3 million and $NZ3.5 million.

He and Mr O'Loghlen decided they wanted to be ''best in class, not biggest in class'' and their focus now was on sustainable development.

''We've been brought up in this pretty brutal environment. I do a lot of travel here, see what's happening ecologically in China, and it's scary ... and it's going to affect the world, not just China.''

Rather than ''just create another capitalistic monster company in China'', the Gung Ho! Pizza founders decided to develop a business which could act as a sustainable development blueprint for other companies - how to be a profitable, successful company but in a sustainable fashion.

That meant they were going to slow their roll-out as focusing on growth meant they could not focus on detail. Inspired by outdoor clothing company Patagonia, they followed ''the three Ps'' of people, planet and profit.

Gung Ho! Pizza now has an environmental department within the company, employing a full-time environmental manager ''who just deals with the planet''. That included the company's carbon footprint, waste, energy usage and training.

There were eight employees who were members of the ''green team'', which met each week to work out how to implement the action plans.

An environmental consulting company was hired to do a full audit of Gung Ho! Pizza, and it became the first food and beverage company in China to do the Global Reporting Initiative. The GRI is a non-profit organisation that promotes economic, environmental and social sustainability.

Through their efforts, the duo felt they could ''really influence China'', rather than just being ''a big pizza joint'', and that was exciting.

Mr Gray estimated more than 40 people had contacted them asking for franchise rights for Gung Ho! Pizza and, of that figure, about 20% were international.

For a little operation of three stores that was ''pretty flattering stuff'', but they were aware they had a lot to prove and there was a lot to be done yet.

While he loved China, he was not in the country for the long haul, Mr Gray said. He already spent three to four months each year out of China, with Wanaka a favourite haunt, and the plan was to ''keep moving that upwards''. Setting up a base in Sydney was a strong possibility.

''I've kind of done the hard yards in the face of China now. I love China, but I don't want to be a China guy; I want to be a global person.''

- Sally Rae travelled to China as a guest of the New Zealand China Friendship Society.

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