Soybean milk is typical Chinese breakfast fare in the south as much as in the north. There is nothing like getting up to a breakfast of sweet-smelling, steaming hot soymilk, deep-fried dough sticks, and sesame seed cakes.

Yungho in Taiwan was the first city to be associated in the popular imagination with soymilk. Half a century ago, a group of war veterans from the mainland came together in Yungho City, Taipei County, looking for a way to make a living. They started out with small roadside food stalls, each contributing his skills. Some ground soybeans to make soymilk, some baked sesame seed cakes in a pan, and others deep-fried dough sticks. Little by little, a famous breakfast street-market was born. Even many mainland scholars visiting Taiwan make a point of going to Yungho to drink soymilk and eat dough sticks. It has become a veritable cultural attraction.

Taiwanese fast-food entrepreneurs have conquered the fast-food market with a franchise model that has greatly broadened the appeal of traditional street-market sesame seed cakes and deep-fried dough sticks.

A soymilk brand

Impressed by the popularity of soymilk, Lin Ping-sheng was smart enough to register "Yon Ho Soybean" as his own trademark. He founded Hong Chi Food Co., began to produce soymilk on an industrial basis, and managed Yon Ho Soybean a brand.

In the early days of his enterprise, Lin Ping-sheng's target market was Taiwan's countless breakfast joints. He supplied them with soymilk concentrate, which they would dilute with boiled water in set proportions that guaranteed soymilk with an unerringly good taste, smell, and consistency. This method saved small breakfast restaurateurs considerable time and energy. Before long, Hong Chi Food began to produce canned soy beverages, which made it possible to fully automate the manufacture of soymilk and to sell it in bakeries, schools, supermarkets, and so forth.

In 1997, Lin Ping-sheng's younger brother Lin Chien-hsiung joined Hong Chi Food. Trained in marketing, Lin Chien-hsiung once went on a fact-finding business trip to Shanghai. Surprised by how prosperous Shanghai was, he bought a bicycle on the spur of the moment and rode it all over town. The more he saw, the more excited he got, and finally he decided to set up shop in the mainland, with Shanghai as the landing point.

Soymilk channel

When they first entered the mainland market, the Lin brothers continued to make soy beverages, but found that the cost of selling products in the mainland was too high, and that it took too long to get paid by customers, so they lost their first business battle. Drawing a lesson from this first bitter experience, they decided to change course, and established the Yon Ho restaurants as a commercial network. Using the Yon Ho brand name and its restaurants as a marketing channel, they then began to sell other products under their own brand name. Lin Chien-hsiung comments, "In the mainland, whoever has his own distribution channel is a winner."

In 1999, the first Yon Ho restaurant outlet opened in Shanghai's Pudong district. Besides soymilk, the menu includes tangbao (small steamed buns with a meat and soup filling), spring rolls, egg pancakes, fried rice noodles, beef noodles, congee with preserved eggs and pork, and other delicious snacks that have greatly broadened the range of breakfast fare available to mainlanders.

This type of Chinese breakfast restaurant was not new. As early as 1995, the Yonghe King company, run by a Taiwanese entrepreneur, enjoyed great popularity in Shanghai and Beijing. In order to differentiate itself from Western fast-food restaurants and other Chinese-food brands and penetrate the market, Yon Ho Soybean therefore adopted a carefully planned twin strategy of "surrounding the cities from the countryside" and "regional licensing."

"In order to reduce costs, even in Shanghai we began by setting up outlets in the outlying districts of Jinshan, Jiading, Zhouzhuang, and Qingpu, and only afterwards did we progressively expand to the downtown area," explains Lin Chien-hsiung. This winning strategy enabled the company to open more than 80 franchises in Changchun, Yantai, and Jinan in the north, in Shanghai in the east, and in Guangzhou, Shenzhen, and Zhuhai in the south. Turnover grew rapidly from RMB3 million to RMB200 million.

Eternal peace everywhere

According to a study of the fast-food market in Beijing, Shanghai, Guangzhou, Wuhan, and Shenyang, more than twice as many people regularly eat Chinese fast food as eat Western fast food. Yon Ho Soybean's rapid popularization in mainland China owes something not just to the quality of the meals it serves and the better ambience of its restaurants, but even more to the dominant franchise strategy adopted by Taiwanese entrepreneurs.

Taiwan franchise brands are particularly well liked, and many locals with ready cash are all too keen to become franchisees. For example, Ganso, which built up its fortune in Taiwan selling sweet sticky rice with bean paste or peanut filling, switched to selling fine pastries in the mainland and now has more than 200 retail outlets. But the first Taiwanese fast food restaurant to enter the mainland, UBC Coffee, has already opened more than 500 franchises.

However, due to the rampant copying going on in the mainland, the two characters yong he, which mean eternal peace, have become synonymous with Chinese fast food. "In Shanghai alone there are more than 100 fast-food restaurants with 'eternal peace' in their name," says Lin Chien-hsiung, who laments that although his firm has the characters yong he fully registered in Taiwan, Hong Kong, Macau, and mainland China, since the company's first fast-food restaurant was opened in 1997 it has been forced to file a non-stop series of lawsuits against trademark infringement. The cute baby scarecrow at every Yon Ho restaurant entrance is meant to enable consumers to tell a real pearl within a sea of fake ones.

Following Yon Ho's success in conquering the mainland from Taiwan and cities from their outskirts, these days it's not uncommon to see Internet novels that feature lovers sitting and chatting in a 24-hour Yon Ho restaurant.

An accident of history made Yungho in Taipei County famous for its soymilk. The business fortunes of two Taiwanese entrepreneurs have now made this street-side breakfast tradition a synonym for Chinese fast food in the mainland, as well as an indispensable feature of the urban landscape.