Casting a wider seafood net
The popular Laem Charoen chain is going abroad, writes Pitsinee Jitpleecheep
After establishing a strong foothold at home, Laem Charoen Seafood, a 39-year-old Thai-style seafood restaurant chain, is branching out into foreign markets this year. “Laem Charoen is widely known among several foreign tourists groups, but we decided to seek our fortune in China first,” Chaitas Narakulsookpipat, the eldest son of Arthorn and Narumol Wongwerathorn, the group’s founders, told the Bangkok Post.
According to Mr Chaitas, the company prefers to expand overseas through joint ventures and is setting up a new company via a joint effort of Laem Charoen Group, Kinghill Group under Charoen Pokphand and NPPG Thailand Plc.
Laem Charoen holds a 20% stake and the business partners hold 80%.
The first Bangkok Seafood, the restaurant’s tentative name, will open somewhere in Shanghai with 400 square metres of space in the fourth quarter of this year.
“This is the first time we are going abroad,” Mr Chaitas said. “We don’t know what will happen. This feels similar to when we first debuted our business in Bangkok. We know it comes with risk because China is a big country with complicated trade laws. But if we don’t go, opportunities will not come to us.”
Laem Charoen is not new for some Chinese, being among the top five Thai-style seafood chains that Chinese tourists visit when they travel to Thailand.
“Up to 70% of customers at some Laem Charoen branches are Chinese on some days,” Mr Chaitas said.
Laem Charoen first opened at the end of Charoen Cape in Rayong province in 1979, as part of activities by Mr Chaitas’s mother to earn more income for the family along with her small grocery store and fish sauce factory.
“Since the first day of opening, we’ve received a very warm response from customers, even though we’ve never advertised. The popularity is a result of word of mouth,” Mr Chaitas said with a smile.
Fried snapper topped up with fish seasoning sauce is the signature dish at Laem Charoen and is also found at regular restaurants around Thailand.
“We sell over 1,000 snappers a day,” Mr Chaitas said. “This is probably the highest the dish sells in Thailand at this time.”
By word of mouth in terms of taste and freshness, Laem Charoen was then called on by customers to open a restaurant in Bangkok. At first, the matriarch demurred because she feared that the quality of the dishes could not be replicated.
After resolving logistical obstacles, she opened the first stand-alone seafood restaurant in the Mengjai area 15 years ago.
The restaurant saw strong performance from the day it opened, partly thanks to a business partner, Arunocha Bhanuphan, the TV series director and producer, who always ushered actors and actresses to dine at the restaurant.
The second branch opened in the Ram Intra area in 2006 as a stand-alone and saw every bit the success enjoyed by previous iterations.
Nonetheless, the turning point was the company’s decision to open a seafood store in a shopping complex for the first time in 2008, featuring a new look, store design, trademark and staff uniforms.
There was little luck at the outset, as the restaurant was quiet for the first six months of operations. The company then started promotions through loyalty programmes to help turn around performance.
Today there are 21 Laem Charoen restaurants spread across Bangkok, Chiang Mai, Khon Kaen and Udon Thani. Each restaurant generates 2-4 million baht in sales per month, depending on restaurant size.
“Laem Charoen has remained successful amid fierce competition, thanks to the company’s passion for the food business and honesty with customers, particularly about the freshness of the seafood,” Mr Chaitas said.
The company plans to expand branch by branch to ensure growth in a sustainable manner.
“We will for the first time open our seafood restaurant in the South, at Central Phuket next month, mainly targeting tourists,” Mr Chaitas said.
In addition to the restaurant, Laem Charoen also provide seafood via delivery and catering for additional sources of income.
“Fewer customers are eating out of home this year because of lower consumer sentiment,” Mr Chaitas said. “This may cause flat growth this year for us. We hope spending power will be brought back to normal after the general election is held next year.”
He said the main challenge of doing business is the difficulty in seeking raw seafood sources as rental fees rise each year.
“We will try to add new value-added menus and expand to more branches abroad, including the Middle East next year and Cambodia, Laos, Myanmar and Vietnam in the near future,” he said. “In the long term, we aim for Laem Charoen to become the top-of-mind brand when people think of seafood.”
Since the first day of opening, we’ve received a very warm response from customers. CHAITAS NARAKULSOOKPIPAT Executive and managing director, Laem Charoen Seafood