Chinese migrants shun takeaways to open Kiwi-style cafes

Once synonymous with fish and chip shops and takeaway counters, Chinese migrants are now a regular part of Auckland's bustling cafe scene.

Chinese individuals are opening coffee shops and cafes in the country's largest city as a way to establish a business, plant roots and integrate more deeply into local life.

However, cafe businesses nationwide are struggling in the face of rising costs, making it harder for Chinese owners to see much opportunity amid tough local competition.

On Auckland's North Shore, 21 Grams Cafe & Patisserie has been run by a Chinese couple for nearly eight years.

Owner Christine Feng said cafes attracted a broader range of customers and helped newcomers integrate more fully into mainstream society - unlike the fish and chip shops and Chinese takeaways once favored by earlier migrants.

"After all, the number of people who eat takeaways is far smaller than those who drink coffee," Feng said.

"Chinese takeaways are mostly open at night, but Kiwis' demand for a first cup of coffee starts early in the morning."

Feng said that her cafe's clientele had shifted from being predominantly Asian to roughly half European New Zealanders since she took over the business.

Her biggest challenge now was keeping the business afloat amid soaring costs over the past three years and intensifying competition in the market.

"Everything is rising - the cost of food, employees' salaries, all the suppliers are raising their prices," she said. "But ... we can't raise prices for customers every day."

Although sales have held steady, Feng said operating costs had climbed by about 20 percent. To stay afloat, she had cut staff numbers to keep expenses down.

Yanjie Gu, who sold his first cafe, Manna Coffee Bread & Store, in Auckland's Birkenhead last May before taking over BLOC Cafe in Mt Eden, said Chinese takeaways had fallen out of favour with new migrants and were difficult to run profitably.

He agreed it was a challenging time for cafes to make a profit.

He said cafe businesses could have made a 25 percent profit a decade ago, but securing a profit of 15 percent was tough at the moment.

"I get anxious if coffee sales drop below 100 cups a day," he said. "I have to cover rent and salaries - about $8000 a week in fixed expenses - just to keep the cafe running."

Beyond the pressure of rising costs, Gu said cultural differences between China and New Zealand were another major barrier for new migrants trying to run a cafe in a Western country.

"Many Chinese migrants come to New Zealand without realizing what Kiwi cafe culture is," he said. "Cafes here are more like community centres."

"You have to build good relationships with customers. If they see you as a friend, they will come back."

Donglan He has spent more than two decades working full time and part time in takeaways, lunch bars and cafes, experience she says that gave her the confidence to start her own business.

While many of her friends remained in the Chinese takeaway business, she opened Beans & Cream, a cafe in Auckland's Browns Bay in April, a step she described as both a challenge and an opportunity.

She said language remained a key barrier for some Chinese migrants starting cafes, but adapting to New Zealand tastes could be just as difficult.

"The muffins and scones I made when I was working for a central Auckland cafe - customers in Browns Bay didn't like them," she said. "Even with the same food, customers in different suburbs may have different tastes.

"In the first two months after opening this cafe, I was just experimenting," she said. "If customers didn't like something, I had to throw it out at the end of the day. You have to keep trying until you're accepted."

Ray Dong, who owns three cafes in Auckland - Howick Village Cafe, Hello Stranger and Ampersand Eatery - feels the same pain, particularly in winning acceptance from local customers.

He recalled some locals questioning his "understanding" of cafe culture in New Zealand.

That attitude, he said, remained a barrier to attracting customers.

"I bought a cafe from a previous owner, a European New Zealander," Dong said. "They had a signature dish - burnt butter. We followed their recipes, but customers still told us it wasn't the flavour they were used to."

Dong acknowledged his cafes might lose some customers but also hoped to attract new ones.

With more migrants moving to Auckland, appealing to a broad range of diners has become a key strategy in an increasingly competitive market, he said.

"Our Asian customer base has been growing gradually in recent years," he said. "When they go to a cafe, they don't just want a big breakfast or eggs benedict. They want to try something different.

"The current economy is not doing well - customers don't have too much spare money," he said. "You have to offer something unique to grab their taste."

Data from Stats NZ showed 9159 cafe and restaurant businesses were operating last year, up from 9006 the year before.

From 2000, the number of registered cafe and restaurant outlets has either remained stable or increased year on year.

Twice as many outlets were registered last year compared to 2000.

Marisa Bidois, chief executive of the Restaurant Association of New Zealand, said the group had only recently begun collecting data on members' ethnicity.

Although the records were incomplete, about 26 percent identified as Asian, a proportion she described as significant.

"Asian entrepreneurship is a large and growing part of New Zealand's business landscape, with a strong presence in food," she said.

"It's fantastic that we are having this diversity within hospitality."

Bidois said New Zealand's mainstream cafe scene had also shifted over the past decade, offering a wider range of flavors and more expansive menus to appeal not only to locals but also to overseas visitors.

She acknowledged there had been "a lot of pain" in the industry recently.

Data from Centrix showed 54 liquidations in the cafe and coffee shop sector over the past 12 months, unchanged from the previous year.

However, the proportion of cafes entering liquidation was three times higher than the rate for all businesses, the data showed.

"We've been hit hard over the past year in particular," Bidois said.

"But it has kind of been a cumulative impact over the past five years from Covid, lockdowns and restrictions of tourists coming in," she said.

"All of those things have impacted our industry."

She said the baseline costs of running a hospitality business had surged while margins remained "small and slim", making conditions especially tough for smaller operators.

"We've seen some fragile signs of recovery, with spending up slightly," she said.

"But a lot of that is being driven by price. We're not necessarily seeing more diners coming through the door."

Bidois advised prospective operators to start small and focus on building a loyal customer base before investing heavily in a business.