BREADTALK has always had an insatiable appetite for new markets. At its tenth anniversary little has changed, except that chairman George Quek now sees expansion as a game of consolidation and franchising.
With its global footprint spanning 13 countries and territories, it appears that the Group has ridden the crest of success to achieve its best financial results to date and double digit growth for the ninth consecutive year.
However, instead of resting on his laurels, Mr Quek is already gearing up to lead his team into the next phase of expansion.
'We are now in an accelerated phase of expansion where we can replicate our business success in other countries,' said Mr Quek, 53.
His hunger has not been quelled and there is still plenty of fire in his belly, but his strategies are anything but mindless. Instead, he is mindful of the importance of building strong foundations.
Mr Quek cites choosing the right franchisees to penetrate new markets and the importance of strengthening existing brands as key to building sustainability of the brand.
'Franchises currently contribute 7.7 per cent to the overall revenue and will be the preferred route of expansion as they allow for quick and effective inroads into new markets. We need to leverage on a partner with a strong network and established presence in the region for more effective penetration into the market,' he stated.
The BreadTalk Group operates the BreadTalk bakeries, Food Republic food courts, the Din Tai Fung, RamenPlay and Toast Box restaurants among others.
Citing the success stories of global brand Haagen Dazs which has been selling ice cream dumplings in China, he believes that innovation and integration of the local culture into his foods is extremely important.
'This is why choosing a partner is so important. You need to choose someone with the knowledge of the market you are entering, someone who is familiar with the local consumer tastes and will be able to provide insight into the local market,' he added.
While he is quick to stress the thought and consideration that must go into choosing a partner that is essential for success in a new market, the greatest takeaway the management has garnered over the year, is the importance of accepting new ideas and adapting the signature of the brand to suit the territory.
'Every country's workings are different, it is absolutely critical to understand the inner workings of a culture and how we can adapt our product to suit the people. For example, our Breadtalk brand in China has come up with a line of luxury mooncakes to cater to the most exquisite of tastes,' he said.
China is at present contributing 34.8 per cent of the group's revenue which amounted to $246.5 million in the year ended 2009 but Mr Quek is hoping this contribution will increase to 50 per cent.
With this target in mind, the group has increased focus on China and has begun to consolidate its Food Republic brand there.
In a bid to strengthen their existing Food Republic brand in China, the Group recently announced a restructuring of food court operations. Operations in two food courts were shut down citing poor performance and those that remain have been undergoing facelifts in an attempt to boost the brand image, starting with the group's largest food court in Beijing.
Good grounding
'We are very keen on expansion but we know that in order to be successful, we need good grounding. We want to ensure that we deepen the roots of each brand and keep coming back to firm up our foundations,' he added.
Except for Beijing and Shanghai outlets which Breadtalk group owns wholly, all others are franchised.
While the Breadtalk Group is no stranger to China, the group's newest brainchild RamenPlay is preparing for its China debut.
The brand will also be officially launched in Hong Kong next month in conjunction with the opening of its third store in a prime location.
However, Chinese territory is not the only territory marked with expansion plans.
The Breadtalk brand successfully penetrated the Middle Eastern market two years ago and has since rolled out in three different markets including Bahrain, Kuwait and Oman. Another is slated to open in Saudi Arabia at the end of this year and more are in the pipeline to be opened in Jordan and Lebanon.
Vietnam is another country that has spelt success for Breadtalk since the first Franchise outlet was opened in Ho Chi Minh and have been extremely encouraging. The Group is targeting to open 10 stores in Vietnam in the next three years with plans to move into Hanoi.
The bakery business contributed 44.8 per cent to the Group's total revenue in FY2009.
The Group has also demonstrated its tenacity for penetration in the restaurant segment with a successful chain store strategy for Din Tai Fung that won it a new territory in Thailand which is scheduled to open in end 2010.
The restaurant business contributed 15.8 per cent of total revenue for the Group in FY2009.
However, the resilient entrepreneur's success story is not without its challenges.
Asked what the most challenging obstacle faced was, he was quick to mention the difference in expectations in different cultures.
'I have come to understand and accept cultural differences in different markets and have therefore been able to manage expectations of delivery of results.' he said.
Humbled by the wisdom garnered from their venture into Chinese territory, the group is well equipped for further progress and is in the process of scoring the potential in the Japanese market.
There is at present no concrete plans to expand into western territory yet.
No comments:
Post a Comment