A very different kind of TV dinner

January 4, 2013: 12:51 PM ET

So-called teledining -- eating over video conference -- has yet to take off.

By Erika Fry, reporter

130103054420-huawei-monsterFORTUNE -- Call it a new spin on TV dinner.

The room is cozy, the hot pot steaming, and your peers eating across the table, they're life-size and in high definition. Welcome to the brave new Hai Di Lao, China's wildly popular hot pot franchise, where you can now break bread (er, slurp hot pot) with friends and family a major Chinese city away via video conference. (For now, the teledining experience is limited to a branch in Beijing and one in Shanghai.)

Hai Di Lao is already known for its over-the-top dining experience -- iPads are used for ordering and customers can get manicures, massages, or have their shoes shined while they wait for tables -- but the restaurant really raised its gee-whiz factor when it installed Huawei telepresence systems in two of its dining rooms earlier this year. Time in the "Real and Smart Suite," a 15-square meter room that holds six chairs and 3, 65-inch screens (specially protected from oil, smoke and fog), costs 200 yuan/hour (about $30), plus a 500 yuan charge for food, about $110 total.

When news of Hai Di Lao's initiative hit Weibo, China's Twitter, in February it was retweeted 250,000 times. Many called for telepresence hot pot in their own city. "It's very popular, the business is growing very quickly," says Jack Feng, Vice President of Unified Communications & Collaboration Marketing for Huawei.

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Sophisticated technology usually reserved for suits in executive suites, it's perhaps not surprising that telepresence served up for the masses is causing a stir in China. But is this the future of dining, or one hot pot chain's gimmick?

"People can really experience an emotional connection. They feel just like they're in the same room. They see their friends, family, and business partners and have lunch or dinner together," says Feng. He imagines more restaurants will be interested in the technology in the future, and says Huawei and Hai Di Lao came together on this project because of their shared customer-centric cultures.

Though teledining is new to China, the concept has been tried before. Back in 1995, TeleSuite, a company that has since been acquired by Polycom (PLCM) announced plans for remote dining suites in 40 venues including the Palmer House and Beverly Hiltons. At the time, Popular Science, perhaps imagining a brighter (or not) future offered "teledining tips" that included "Finish with the phrase, 'Over to you'" and "Never ask the waiter on the other side of the video wall to pour you water."

While teledining has never really taken off, there are still eating establishments that offer telepresence suites, particularly those that cater to business crowds. Fleming's Prime Steak House and Wine Bar, for example, offers Cisco (CSCO) TelePresence suites at all 65 of its locations. Customers can connect with other Fleming's telesuites, non-Fleming's video conferencing systems, or by using a third-party bridging company called BlueJeans, Skype and Google (GOOG) chat users.

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Terri Horan, Marketing Manager for Fleming's, says usage of the systems has grown tremendously over the past five years. Though it varies by city, most of the suites are used everyday to a couple times per week. They're especially popular with doctors and pharmaceutical companies who are looking to save travel costs, but the telesuites have also been used for the occasional personal function, like broadcasting a wedding to family members on Skype. Fleming's also occasionally hosts large teledining events that involve dozens of their restaurants or uses its technology for internal trainings.

Celebrity chef and restauranteur Thomas Keller also uses video conferencing (Polycom) in his restaurants and bistros, not for the sake of his diners but so he can manage his various kitchens around the clock.

Bryan Wang, an analyst with Forrester (FORR) expects these cases of restaurant telepresence to remain exceptions in the industry. "I don't see this scaling up or out in the hospitality business. It just doesn't make any business sense," he says. In the case of Hai Di Lao, which was reported in the Chinese press to have spent more than 4 million yuan (about $650,000) on the two suites, Wang is skeptical the franchise could ever make up the cost of the system with what it's charging customers. Aside from the costs of installation and maintenance, Wang notes that bandwidth in China is extremely expensive.

At the same time he acknowledges it's a useful marketing ploy for both Hai Di Lao and Huawei, which previewed its 'next-generation' full view telepresence system in March and has seen fast-growing demand for products from the government sector. While Huawei has sold its videoconferencing technology to 45 countries around the world, Wang says much of this growth will come in China where deep-pocketed provincial and local agencies are recognizing the utility of videoconferencing and telepresence systems. He adds that Huawei has also capitalized on networking contracts it has with governments in developing countries, by bundling video conferencing equipment in deals for basic infrastructure. Wang estimates Huawei's prices are 30-50% lower than its competitors. (Global bookings for Huawei's videoconferencing products last year exceeded 130,000, for telepresence units 2100.)

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Applications for telepresence in remote education, banking and health are also sources of growth industry-wide.

Back in China, the enthusiasm for Hai Di Lao's remote dining appears to have cooled since its February launch. A spokesperson for the company said the systems are not used everyday, particularly during the week. Plans for rolling out remote dining rooms in other branches across the country also have been put on hold.

Whether or not teledining in China goes the way of teledining in America, it's unlikely Huawei will be the company that revives a remote dining movement in the States. In October, a Congressional Committee issued a report calling Huawei a "national security threat" and warning of its potential to spy on Americans. Huawei, which has faced such allegations for years in the States, fiercely denies the charges.

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