HAMBURGERS, a common food item in the United States, were a luxury in China in the early 1990s. "We had to pay US$10 to buy a hamburger in hotel restaurants," China Jim said.

The exorbitant price scared Jim away from the that particular US favourite and inspired him to open his own store, selling authentic American pizza to Westerners living in Shanghai.

Jim has lived in China for 17 years, and his store, Yellow Submarine which opened in 1994, has served numerous expatriates who work and live in Shanghai. "The name, Yellow Submarine, is taken from a Beatles' song, easy to remember since most foreigners from the West are familiar with the tune," Jim said.

From the beginning, Jim knew that he would be the first in his chosen business. In 1993, pizza vendors like Pizza hut did not yet have their eyes on China.

Sandwiches to pizza

For Jim, a large and unfulfilled market was right in front of his eyes. "But I had no idea of how to do it," he said.

Jim first ventured into sandwich making. "It was easier than making pizza. Just put something together - anyone can do it," he said.

To discover what his foreign friends liked or disliked eating, Jim bought different types of breads from different bakeries and meat products from different suppliers. Then he invited 25 friends to his home for lunch. He asked each one to fill out a survey form he provided, telling him what they thought of his sandwiches.

"After two lunches over two days, it was clear to me what they liked," Jim said.

After making some preparations, Jim decided to open his store. But at that time, it was impossible for a foreigner to get a business licence. Undeterred, he rented a little restaurant on Xikang Road from a local Chinese and used the owner's license.

After renovating and decorating the store, he and eight workers started their new business. But soon, he was stuck with the problem of attracting night business, since demand for sandwiches is usually highest at lunch time.

Jim was not a chef and did not know how to make pizza. He asked one of his friends, an engineer who happened to be a good cook, to help. The friend taught Jim how to make pizza and another round of experiments followed until everything was right. One month later, Jim started his pizza delivery business.

"The main difference between Yellow Submarine and its competitors is the taste of our pizza sauce," Jim said. "Our competitors use a sweeter pizza sauce. But our pizza is less sweet, with more flavour."

Over 10 years, Jim has never considered changing his recipe. "Today's new generation in China are used to Western food and they prefer the authentic taste, so trying to adjust to the local taste is not what we want to do," Jim said.

He recalled that 10 year ago, 99 per cent of his customers were expatriates, now, about 40 per cent of his business comes from local customers.

With the expansion of his business, Jim opened stores in places where expatriates gathered, including Gubei, Hongqiao, Lujiazui and Jinqiao area. "But I also made some bad choices," he said.

His store at Times Square in the Lujiazui area was one of his favourite stores. He designed the decorations and renovated it with the help of his workers.

However, local people seldom shopped in this expensive and luxurious shopping centre, and the customer base never grew.

This setback didn't weaken Jim's determination to continue his pizza business. "To worry every single moment does not help anything. What I do is tackle the problem at hand. We cannot make decisions without thinking it through clearly," he said.

Relocation puzzle

Since 1994, dramatic changes have taken place in Shanghai. Jim and his pizza business have witnessed the city's fast development.

Eighteen months after starting his first shop on Xikang Road, urban renewal forced Jim to move the business to make way for an office building.

From then on, Jim said, he was always trying to keep a step ahead of the bulldozers. Two years later he moved his store again, this time for an apartment building. Three years later, he was displaced by another new office building. Two and a half years later, his store was pulled down for the fourth time.

"The city government decided to build a garden area for the APEC conference," he said.

The frequent relocations forced Jim to spend money on major decoration efforts several times, he said. "Luckily, we have kept the same telephone number and our pizza delivery business is not affected by these frequent moves. During this period, I have also seen many new pizza stores open, fortunately my business has remained steady due to our loyal customers."

Better policies

What makes Jim happier is that it is becoming much easier for foreigners to do business in today's China. "China's government has made great efforts to make policies and laws more clearly available to people," he said.

At the end of 2005, foreign businessmen in China will be allowed to get their own business licence. But in the early 1990s, doing business was difficult for Jim. Because there were few laws governing business practices, people did not do business in the right way and it was not easy to get an honest answer.

Before opening his pizza store, Jim and his friend went to court many times to accuse one of their Chinese partners, who took bribes and gave their land use right away to a property developer. "We even wrote a letter to the mayor of Shanghai, but without any results," he said.

With the help of a lawyer from Fudan University, they finally won their case and their Chinese partner was put into prison for 10 years. Unfortunately, they never got any financial settlement from this dispute.

"The new generation coming out of universities has improved China's education level," Jim said, which has also improved China's legal situation.

Jim's first journey to China was in 1983. From then on, he travelled to many cities around China, "Just like a back-packer with a business suit on. But I like Shanghai. It feels like home to me," he said.

It was in 1988 that Jim settled in Shanghai and he plans to stay here. He hopes to buy a place in Sanya in South China's Hainan Province, a beautiful tourist city. "Maybe then I will spend my summers in Shanghai and winters in Sanya," he said, smiling.

Yellow Submarine

Tel: 6415-1666