Israel’s UgaUga helps Chinese bake cakes in rice cookers
Kits with prepared mixes target 400 million Chinese online; marketing campaign to come
Shoshanna Solomon is The Times of Israel's Startups and Business reporter
Four years ago, Israeli Ronen Mechanik, 41, sent his Chinese friend Piu Piu a photo of an elaborate birthday cake he had baked for his son’s sixth birthday.
Piu, impressed, asked Mechanik to send her the recipe. But because the Chinese don’t generally bake cakes at home, Piu had a hard time finding the necessary ingredients, and it took a while to order them online. When, finally, she was ready to go, she and Mechanik realized there was one more critical missing component: an oven. Piu didn’t have one, and none of her friends or neighbors had one either.
Trying to help, Mechanik asked Piu to list all the appliances she had in her kitchen. The first one on the list was the rice cooker. So Mechanik, a former sous-chef at a restaurant in Tel Aviv, bought one locally and experimented baking a Western cake in it. It took him several trials to produce something good. He then prepared a mix of all the dry ingredients necessary for the cake and sent it to Piu by post, along with baking instructions.
The result was obviously a success because a few days later Mechanik’s WhatsApp feed was flooded with compliments and pictures of the cake baked by Piu, with requests for more of the same. That was when Piu and Mechanik realized they may be onto something with a huge commercial potential.
So nine weeks ago they launched their website, UgaUga, from which Chinese users can order cake-baking kits for use in their rice cookers. Four thousand kits have been sold since the website’s launch, said Mechanik, just through word of mouth. The company is planning to launch a marketing campaign later this month.
“In just 16 minutes, without pre-heating and using 15 percent less electricity than when using an oven, you can make a perfect cake using a rice cooker,” said Mechanik in a phone interview. “The cooker actually works as a combi-steamer used by chefs, which injects water into the chamber making the cake more wet and moist.”
Rice is the staple ingredient for the Chinese so all homes have at least one, if not two, rice cookers, Mechanik said.
The cake kits come in three flavors: chocolate with chocolate cream; brownie with white chocolate coins, and vanilla cake with strawberry cream and dried berries. There are more in the pipeline, based on customer demand, like green-tea cake with red beans and cheesecake.
The kits come with a disposable aluminum mold that fits into the rice cooker, so the appliance does not smell or taste of chocolate after use and does not have to be cleaned, Mechanik said.
Each kit comes with cake powder manufactured in Israel, and then is assembled at a plant near Shanghai with other ingredients, like chocolate cream squeeze bags and candy toppings. The mix contains no preservatives or chemicals ingredients, the company said.
The baking process entails mixing the ingredients in the aluminum tray — powder, eggs, oil — and then steaming it in the rice cooker.
“We leave a lot of space for creativity,” Mechanik said. “The users bake the cakes: they add the oil and the eggs. Some of our users have added marshmallows to the cakes, another person put cream cheese in the middle and an avocado on top. We allow the Chinese customer to make their own cakes. We just provide the basics. Then they share the pictures of their cakes on social media, and that is how our product becomes viral,” he said.
“The kits have been prepared carefully, catering to the tastes of the Chinese after we set up a focus group to study local preferences,” said Mechanik, who was joined by Nir Manor, a co-founder of the company with 20 years experience in retail, online sales and marketing. As a result of their research, sugar content was cut dramatically, Mechanik said.
“We are targeting the 400 million people in China who are connected, who shop online for everything,” he said.
The kits are also available on WeChat, China’s biggest social media network, and Taobao, one of China’s biggest online sales platforms. There will be more online stores carrying the products by the end of the month, he said.
The venture was made possible through UgaUga’s use of the CI3 Industrial Incubator, set up in China by Israeli entrepreneurs Tzvika Shalgo and Ilan Mimon, which aims to help Western firms, including medical equipment suppliers, automotive and industrial equipment makers, set up and promote their businesses in China. Located in Changzhou, 180 kilometers from Shanghai, CI3 helped UgaUga apply for its food license and helped overcome regulatory and red-tape difficulties; CI3 helped establish a local production line within the incubator to support managerial and operational aspects of the business and also obtained a grant from the local government for UgaUga.
“The accelerator was an umbrella for us. Having them help us cut about six months in bureaucracy and cut our expenses,” said Mechanik.
Singapore, Indonesia, Hong Kong and Korea — whose citizens use rice cookers — are all potential markets as well, along with student dorms in the US and Europe, where rice cookers are used due to dorm regulatory constraints. The key is to show what you can do with rice cookers, Mechanik said. But for now, UgaUga is focusing on China.
The cost of each cake kit is around $7 or 42 Renminbi. “It is not cheap but not expensive either, for the local market,” Mechanik said. In China, a slice of cake at a local Starbucks can cost $3 to $5 and ready-made party cakes bought in stores can cost up to $200-$300, he said.
The company has raised a few hundred thousand dollars from private investors to date, he said.
UgaUga has no patent on the cooking method, though the company’s name and its products are protected.
“But there is so much room” in China, he said. If other manufacturing companies jump in and help spread the message that rice cookers are not just for rice, “it will be better for us” as they will create even more awareness among potential consumers. “The best protection is to be the best and to keep innovating and talk to customers about what they want.”