Samuel Yik, founder and managing director of Dian Xiao Er Group, has found a sweet spot in Singapore with his savoury Chinese dishes; the restaurant chain now counts 17 branches around the island, with two more in the works. For his foresight and business acumen in navigating the tough restaurant industry, Yik has been named EY Entrepreneur Of The Year in the Food and Beverage sector for 2024.
Speaking to The Edge Singapore, the accountant-turned-restauranteur recounts a “bitter” and hard-fought journey — one that began in 2002.
In his previous life at an accounting firm, Yik was bored with his desk-bound job and looked forward most to the lunch hour. “We were in an industrial area and nobody wanted to go out to buy food. I had a car, so I drove out to buy good bak chor mee, bak kut teh for my colleagues. It has always been my passion to share food,” he says in Mandarin.
Yik realised there was a gap in the market for a Chinese casual dining restaurant specialising in roast duck, and the scepticism he faced initially only made him double down on his hypothesis. For one, representatives from the now-defunct Agri-Food and Veterinary Authority of Singapore (AVA) advised him against it, as Singaporean residents consume more chicken than duck.
Still, Yik believed herbal roast duck would be popular as a delicacy. “You can make chicken at home. But duck — you can’t fit that in a regular oven. Things that you couldn’t cook at home — that was our barrier to entry.”
Yik also had another trick up his sleeves: two ovens that “looked like spaceships”, priced at $24,000 each. “Everyone laughed at me when I said I was going to purchase it over a regular $700 oven.”
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But Yik stuck to his guns. The massive appliance was akin to an “automatic washing machine” — it could cook multiple ducks at a preset temperature, broil them at a higher temperature to crisp up the skin, remove humidity to eliminate sogginess and even clean itself after all the cooking was done.
According to Yik, the oven was a worthwhile investment that made sense in the long run. He even received government grants for the purchase, amid a nationwide push towards technology and automation at the time.
With the pièce de résistance of his kitchen settled, Yik launched the first Dian Xiao Er restaurant in Chinatown in late-2002. The business fared well over the Lunar New Year, but the Sars and bird flu outbreaks that followed made for a painful first year, says Yik. To make matters worse, works to repave the streets around the outlet began just one month after the opening.
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In hindsight, Yik says that period was “tougher than Covid-19”. “At least during Covid-19, we had government subsidies.”
Still, he persevered, and Dian Xiao Er opened its second outlet in June 2005 at Marina Square. To grow the business, Yik entered into a partnership with Mainboard-listed Soup Holdings 5KI , operator of the Soup Restaurant restaurant chain, in 2006. Subsequently, Dian Xiao Er expanded to AMK Hub — with a split entryway alongside Soup Restaurant — and Causeway Point. Dian Xiao Er was also one the earliest tenants to open at Changi Airport Terminal 3 in mid-2008.
However, Yik’s relationship with his new business partners began to sour, and he was later forcibly removed as managing director of Dian Xiao Er. Eventually, Yik secured a bank loan to buy out the stake he had sold six years prior — but at 40 times the valuation. “The headlines then mocked my decision, but I was determined. I didn’t want to start another brand because my restaurant branches were already in many prime locations.”
‘Big meat, small mouth’
Yik, at the helm of the business again in 2012, then set his sights on the overseas market. In 2017, Yik opened the chain’s first outlet outside of Singapore, albeit in slightly familiar territory, in Shanghai’s Raffles City Changning.
While the restaurant drew large crowds at its debut, business was sharply affected by the outbreak of Covid-19 in 2020. China was determined to stamp out the virus then, and Shanghai only lifted its lockdown in 2022, making it one of the last major cities in the world to reopen. Instead of waiting for the end of Covid-19, Yik decided to bite the bullet and close the restaurant in the early months of the pandemic.
Would Yik stage a return to China in the future? He chuckles, noting the Chinese market is huge. “It’s a big piece of meat, but our mouth is very small. It’s not impossible, but you’ll need a very strong partner.”
Competition is also intense in China’s restaurant industry, says Yik, rattling off a list of copycats that have emulated a popular Hunan restaurant there, and later even succeeded in expanding overseas to Singapore. Quoting a Chinese idiom, Yik says: “Only a fierce dragon dares to cross the river. You’ll first have to be a fierce dragon.”
Instead, Cambodia could be a more viable market. Yik notes that the US dollar is widely accepted in the Asean member country, so the company would not face any foreign exchange impact. Dian Xiao Er has found a partner in Cambodia, says Yik, and the two parties are close to signing an agreement to work together.
“[Cambodia] is a blank slate, and not many businesses are setting up there. But we are looking for such greenfield areas, and not saturated markets like Vietnam,” says Yik. “Cambodia may not have a relatively large population, but it is up and coming.”
He likened Cambodia to China’s Shenzhen some two decades ago. “Costs are low [and] salaries are a tenth [of what they are in Singapore].”
Yik’s conviction is so strong that Dian Xiao Er acquired a five-storey building in Cambodia for some US$500,000 ($665,500). He envisions that the first floor could be a restaurant while the upper floors could be rented out as office space. Located in Urban Village Phnom Penh, the property faces the Mekong River, and has “beautiful” views, he adds. “It’s the most exciting development in Cambodia right now.”
‘Win-win-win’
Like the rest of the restaurant industry, Dian Xiao Er was not spared when Covid-19 hit Singapore in early 2020. The brand also made headlines during that period, as it reportedly kept all its staff on its payroll and did not retrench its workers.
“We had a lot of government support during Covid-19. Of course, when this ended, you saw a lot of restaurants go out of business,” says Yik. He cites a Knight Frank Singapore report from October, which claimed that 2,465 food and beverage businesses had ceased operations in the first nine months of 2024, up 19.7% from the whole of 2023.
“It’s the ‘boiling frog syndrome’. A lot of restaurant owners don’t realise how far business has fallen since their opening days,” Yik adds. “So, we are thankful that our customers share their feedback with us.”
He notes that during the pandemic, Dian Xiao Er “did the reverse thing” with cash in hand. “We did four to five things that others wouldn’t have done.”
These corporate actions included buying a freehold industrial unit in Tai Seng for use as a central kitchen. Dian Xiao Er tapped on Enterprise Singapore’s Enterprise Development Grant to help offset the cost of automating its central kitchen, which has since expanded to occupy four units, totalling some 12,000 sq ft.
The central kitchen has cut preparation work at the chain’s restaurants by automating tasks like mincing garlic and simmering curries. According to Yik, this allows his restaurants to start sending out orders for dinner from as early as 4pm.
Dian Xiao Er also took a different approach to retaining its staff. “To us, if you retrench workers, it will be very difficult to hire them back,” says Yik. “So instead, we increased their tasks and launched promotional menus. We launched a takeaway-only set meal [in 2021] for four people, priced at $88, when the actual value was $180… We didn’t retrench staff; we even recruited more workers.”
Introduced in 2021, Yik calls this a “win-win-win” move, as customers enjoyed the discount, the staff found work, the business could service its loans and Dian Xiao Er’s landlords received steady rents on time. “Because many people were coming to [our restaurants], we also helped other retailers,” he adds.
Dian Xiao Er now counts some 500 staff on its payroll. “I would like to thank our staff at Dian Xiao Er. Without them, we wouldn’t [be able to] receive this award [from EY]. The award is being presented to me, but it really belongs to our staff,” says Yik, now in his 50s.
Looking ahead, Yik thinks Dian Xiao Er will be able to open a “maximum” of 24 outlets in Singapore, given the size of the market. Most of the chain’s outlets are currently located in heartland malls, and Yik hopes to set up shop in prime shopping areas like Orchard and other tourist attractions.
“I’m very thankful to our customers, who have been really supportive of us,” adds the father of one. “Customers vote with their feet; they will go to where they think is the best. I have some regular customers who tell me they have been supporting us for 20 years, since the Chinatown outlet, and have since gotten married and had kids, and they’re still coming to dine with us.”
