As a growing number of food-delivery startups, like the K-pop juggernaut Baehan and the fast-casual restaurant Panda Express, are turning their attentions to Asia, some Korean food-service startups are looking to the Middle Kingdom to build a foothold.
As the Korean-speaking world expands, so too will the demand for quality Korean food.
“If you’re trying to grow a business, you need to get your products from Asia, and if you’re in Asia, you want to know the quality of your product,” says Kim, the former CEO of Baehn.
“But the other thing you need is to know where the quality is, because if you don’t know, then you don’ t want to grow.”
Kim began his business in 2009, when he was just 19 years old, with a simple idea.
“I realized that I wanted to serve delicious Korean food to people who can’t afford to eat at a Korean restaurant,” he says.
“It was a way to make sure that we were making a living from food and not having to spend money on advertising.”
That’s how he began his own restaurant, Baehng, which he cofounded with his brother.
The brothers started selling their wares online, with each delivery costing about $2.
But when Kim realized he couldn’t sell his wares directly to consumers in South Korea, he decided to start a company.
“The idea was, ‘I’m gonna start this company that sells quality Korean products that I can’t get in South Korean stores,'” he says, adding that he would use the profits to expand to other countries.
“We started out in the U.S., in San Francisco, and in New York, and now we’re expanding to Tokyo and other countries,” he adds.
“In fact, we’re opening up a second store in New Zealand, so we’re also expanding internationally.”
The Korean-language business model for Baehin began with a local Korean restaurant in the small town of Gwangju, a suburb of Seoul.
Kim first saw a restaurant that offered a Korean menu and the opportunity to cater to a Korean clientele.
“After we opened, we started to sell a lot of Korean food,” he explains.
“That’s how we ended up opening the restaurant in Japan.”
The Baehaan family has been making Korean food in Korea for almost 30 years.
They started selling food online and selling the wares through their website, BeadsandPins.com, and they also have restaurants in Seoul and Tokyo, but they also focus on catering to a broader clientele that includes tourists.
“A lot of our customers are from Europe and Asia, so they’re looking for quality, authentic Korean food that they can’t find in Korea,” Kim says.
And when they can, they often order Korean-made food from restaurants in China or Vietnam.
“They’re really curious about what’s going on in Korea, so when they see a Korean food, they think, ‘Oh, that’s really authentic Korean,’ ” Kim says, noting that Baehyun and his team work hard to keep up with the ever-changing trends in Korea.
BaeHan started with a small restaurant in Seoul, but he expanded to other cities and now the Baehapins have three locations in the United States, two in New England, and one in the San Francisco Bay Area.
Kim estimates that the company has around 3,000 customers.
He adds that the biggest hurdle for the Korean food industry is how to deliver good quality Korean-style food to customers in China, where consumers are more discerning than the rest of the world.
“You need to find a restaurant in China that has the highest quality Korean quality food,” Kim explains.
Kim has learned that his Korean customers appreciate his ability to get them to order Korean food at a reasonable price.
He also has learned from his Chinese customers that the Beadsesans are willing to pay a little more for good Korean food because they think they are getting the best product.
“People come to Baehang to see what’s really good, because they’re just curious about Korean food and want to experience it, and it’s a way for us to cater their needs,” he concludes.
The Korean food business is a lucrative one, with some estimates estimating that the average restaurant in South America pays out $1.2 million per month.
But while the industry has been growing, it’s still not quite as big as it once was, says Kim.
The average Korean restaurant costs about $10,000 to $15,000 per month, and he estimates that he has to pay out $200 to $300 a month just to keep the business afloat.
But the bigger challenge for the business, he says is finding restaurants willing to cater the tastes of Chinese and Japanese consumers.