Goubuli pre­pares to put big dough into ex­pan­sion

China Daily (Canada) - - BUSINESS - By ZHAO YI­NAN zhaoy­i­nan@chi­nadaily.com.cn

An eatery gi­ant known for its steamed stuffed buns, and with an am­bi­tious ex­pan­sion plan to buy a United States cof­fee chain, is join­ing a grow­ing num­ber of Chi­nese en­ter­prises in go­ing global.

Goubuli Group , a renowned Chi­nese food cor­po­ra­tion based in North China’s Tian­jin, an­nounced on Thurs­day that it plans to buy a US cafe chain com­pany in the first half of the year.

If com­pleted, the deal will help the dumpling group — also known as Go Be­lieve — to ac­quire hun­dreds of stores in more than 40 coun­tries and re­gions in Europe, the United States and South­east Asia, Geng Jing, deputy gen­eral man­ager of the com­pany, told China Daily on Thurs­day.

Geng de­clined to spec­ify the tar­geted brand, nor did she re­veal de­tails on how the ac­qui­si­tion process is go­ing.

But she did say that the two com­pa­nies have reached “an ini­tial agree­ment” and will iron out the wrin­kles in com­ing months.

Geng said the com­pany ex­pects to win sup­port from the Tian­jin Com­merce Com­mit­tee, a gov­ern­men­tal re­view that is needed be­fore a pur­chase can be made.

If com­pleted, the deal would mark the big­gest over­seas ac­qui­si­tion in China’s cater­ing in­dus­try, Geng said.

Ac­cord­ing to a state­ment pro­vided by the com­pany, Zhang Yansen, chair­man of Goubuli Group, said the ac­qui­si­tion will en­able Goubuli, which also is pre­par­ing to be listed on the A-share stock mar­ket, to pro­mote high-qual­ity Chi­nese cui­sine over­seas through the cof­fee chain’s ex­ist­ing net­work.

“It can re­duce the dif­fi­cul­ties of over­seas ex­pan­sion and help the com­pany ad­just more quickly to lo­cal mar­kets,” he said.

The time-hon­ored Chi­nese food items made head­lines re­cently, fol­low­ing Pres­i­dent Xi Jin­ping’s un­ex­pected visit

They may suc­ceed at one place, but such suc­cess can rarely be du­pli­cated. ... Ex­pan­sion with­out proper re­search can be very risky.” MOU DONGLIANG DEPUTY SEC­RE­TARY-GEN­ERAL FOR THE WORLD AS­SO­CI­A­TION OF CHI­NESE CUI­SINE

late last month to Qingfeng Steamed Stuffed Bun Restau­rant, where he had a lunch of six stuffed buns with a dish of veg­eta­bles and other lo­cal del­i­ca­cies.

Qingfeng, a Bei­jing-based chain fa­mous for steamed buns, has seen hun­dreds of din­ers rush to or­der the same menu, which has been tagged the “Xi Jin­ping combo”.

The over­seas ex­pan­sion plans of Goubuli, which was es­tab­lished in 1858 and head­quar­tered in the port city of Tian­jin, have gained mo­men­tum in re­cent years.

Af­ter open­ing a branch in Ja­pan in 2011, it an­nounced a plan to part­ner with Sin­ga­pore­based food maker Tee Yih Jia in Oc­to­ber last year to sell Goubuli prod­ucts in more than 50 Asia-Pa­cific su­per­mar­kets.

But some are pre­dict­ing that Goubuli’s am­bi­tions to go global will face fail­ure if it can’t cater to lo­cal eat­ing habits and abide by lo­cal laws re­gard­ing con­sumer pro­tec­tion and la­bor rights.

Li Juan, a 28-year-old Tian­jin res­i­dent, said she be­lieves that Goubuli has lost cus­tomers over the years be­cause of high prices and di­min­ish­ing qual­ity.

“I once treated a vis­it­ing friend at Goubuli’s flag­ship restau­rant, but the stuffed buns were too oily, and the wait­ers didn’t take care of us very well,” she said.

Mou Dongliang, deputy sec­re­tary-gen­eral for the World As­so­ci­a­tion of Chi­nese Cui­sine, said that while do­mes­tic com­pa­nies may eye the over­seas food mar­ket, many fail to meet lo­cal tastes, so their cus­tomers are lim­ited to over­seas Chi­nese.

But Mou said that even though some restau­rants may have cus­tomers lin­ing up, it is still hard for them to ex­pand into a chain busi­ness.

“They may suc­ceed at one place, but such suc­cess can rarely be du­pli­cated,” he said.

“They have to re­search lo­cal eat­ing and spend­ing habits, as well as lo­cal reg­u­la­tions on busi­ness man­age­ment, con­sumer pro­tec­tion and la­bor rights, be­fore open­ing a new store. Ex­pan­sion with­out proper re­search can be very risky.”

Yang Lin, a lawyer at the Bei­jing-based Yingke Law Firm, said Goubuli’s deal can be com­pleted only if it wins ap­proval from the Tian­jin Com­merce Com­mit­tee, and noted that when the gov­ern­ment will com­plete its as­sess­ment is hard to pre­dict.

“The time of clos­ing the deal will be largely de­cided by the lo­cal gov­ern­ment’s at­ti­tude. It could be pos­si­ble for Goubuli to wrap it up in six months, since no gov­ern­men­tal re­view is needed on the US side,” she said.

She sug­gested that Goubuli hire ac­count­ing, busi­ness and le­gal con­sul­tants to an­a­lyze and counter any pos­si­ble in­vest­ment risks.

“A suc­cess­ful ac­qui­si­tion is only the first step in go­ing global,” Yang said. “Busi­ness re­struc­tur­ing and how to meld with the lo­cal cul­ture are some of the chal­lenges that lie ahead.” Li Xiang in Tian­jin con­trib­uted to this story.

LI SHENGLI / FOR CHINA DAILY

A chef makes steamed buns with meat and veg­etable fill­ings at a Goubuli Group restau­rant in Tian­jin. This time-hon­ored brand, which has an ag­gres­sive ex­pan­sion pro­gram, also plans to list on the A-share mar­ket.

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