Slurping Up Profits at Ajisen

(page 2 of 2)

The turning point came when two Hong Kong residents approached Shigemitsu. Cheng Wai Tao, an entrepreneur with experience in the food business, had enjoyed Ajisen's noodles while spending a year in Tokyo and reckoned the business could prosper in China. Separately, Wai Poon, today Ajisen's CEO, had visited the company's Kumamoto headquarters as a member of a business exchange mission in 1995 and had a similar idea. Having got on well with the elder Shigemitsu, the trio decided to go into business. A first restaurant in Hong Kong's Causeway Bay followed a year later, in 1996, just as interest in Japanese cuisine began rising in China.

Anti-Japanese Feeling Overcome

The experience of Cheng, who left Ajisen after its listing in March, and Poon paid off, and Ajisen soon spread from Hong Kong to Beijing, Shanghai, and other regions of China. One reason: They've changed the menu. While the restaurants in Japan offer little more than ramen and dumplings, Ajisen restaurants in China are more varied, offering yakitori (skewered grilled chicken), tofu, and, to the younger Shigemitsu's surprise, grilled fish. "Serving dishes like grilled fish at a ramen shop was unthinkable to me, but it turned out to be quite a popular dish in China," he says.

One big problem Ajisen has overcome: anti-Japanese feeling among many Chinese. In 2004 demonstrations broke out in several Chinese cities as people protested against Japanese textbooks for downplaying the Japanese army's role in atrocities such as the Rape of Nanjing during World War II. "A whole bunch of people went to our restaurants and threw eggs and stones at our window," says Zheng.

But, he adds: "We explained we are not a Japanese company. We are a Hong Kong company managed by Chinese people." The demonstrations ended within a few days, and Zheng says that ultimately they helped Ajisen. Before then, "not many people knew about Ajisen noodles," he says. Agreeing with the saying that there's no such thing as bad publicity, he adds: "From that time, a lot of people knew."

Tashiro is a reporter in BusinessWeek's Tokyo bureau, and Einhorn is a reporter in BusinessWeek's Hong Kong bureau.

Tashiro is a correspondent for BusinessWeek based in Tokyo. Einhorn is Asia regional editor in BusinessWeek's Hong Kong bureau.