Inside Franchise Business - - Industry Spotlight -

Where Chatime’s jour­ney to suc­cess has been paved with in­no­va­tion and adap­tion, fel­low Tai­wanese bub­ble-tea fran­chise Gong Cha Tea has fol­lowed the tra­di­tional path.

The brand ar­rived in Aus­tralia in 2012, es­tab­lish­ing op­er­a­tions on Ge­orge St in Syd­ney’s CBD, em­ploy­ing a de­vel­op­ment strat­egy that fo­cused on pri­mar­ily Asian de­mo­graph­ics.

“When we first en­tered Aus­tralia in 2012, there was two main brands that dom­i­nated the mar­ket, Easy Way and Chatime, how­ever, we were able to break in and by 2017, we had 48 stores na­tion­wide,” said Gong Cha Tea ex­ec­u­tive as­sis­tant Eddy Xu.

Ex­pan­sion has con­tin­ued steadily for the brand, which an­nounced na­tion-wide rep­re­sen­ta­tion fol­low­ing the open­ing of Dar­win lo­ca­tion ear­lier this year, with the brand set to hit 60 stores by the end of 2018.

Growth has been in­ter­est­ing and of­ten un­ex­pected how­ever, with Xu re­mark­ing some lo­ca­tions that were not pre­vi­ously thought of as key per­for­mance zones had far ex­ceeded net­work ex­pec­ta­tion.

“It’s sur­pris­ing, we opened a re­mote lo­ca­tion in Ho­bart and its go­ing crazy, ab­so­lutely blow­ing up in sales, which was a ma­jor sur­prise for me. I couldn’t imag­ine why Ho­bart would rep­re­sent a strong growth mar­ket, but it’s proven to be one.”

As con­sumer tastes change and Aus­tralian au­di­ences be­come more aware of new mar­ket trends, busi­nesses find them­selves at a cross­roads; should they re­fo­cus op­er­a­tions on a broader au­di­ence, or con­tinue to seg­ment the Aus­tralian mar­ket?

Xu be­lieves it’s the dou­ble-edged sword of food re­tail­ing. “It’s a two-way street. We were ac­tu­ally the first bub­bletea brand in Aus­tralia to in­tro­duce soy milk be­cause our re­search showed that one third of Aus­tralians are either lac­tose in­tol­er­ant or have a pref­er­ence for soy. Rather than change our prod­uct of­fer­ing, we be­lieve that ini­tia­tives like in­tro­duc­ing soy would be a friendly ap­proach to di­ver­si­fy­ing our au­di­ence.”

While bub­ble-tea has quickly be­come a favourite of the Cau­casian mar­ket, Xu be­lieves Gong Cha Tea’s tra­di­tional ap­proach is the se­cret to the brand’s suc­cess.

“The cul­ture is so dif­fer­ent, as we are very tra­di­tional. That’s our dif­fer­en­ti­a­tion in the mar­ket, we set our premises around heav­ily Asian cul­ture.”

The busi­ness is a firm be­liever is pro­vid­ing fran­chisees with the tools for sus­tained suc­cess, with an ex­ten­sive, in-depth train­ing pro­gram and lo­ca­tion se­lec­tion ad­vice.

“When we re­ceive a fran­chis­ing in­quiry, we ac­tively source the lo­ca­tion for the can­di­date, based on their pref­er­ences. Fol­low­ing that, we re­view ap­pli­ca­tions, go through in­ter­views, give the fran­chisee a hands-on fran­chise busi­ness ex­pe­ri­ence and help them se­lect their site. we only ap­prove the site if we be­lieve the lo­ca­tion will make money. At the end of the day, we want our fran­chisees to be suc­cess­ful.”

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