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• 3 SPECIAL FEATURE
Philippine brands conquering
foreign terrain
Philippine brands are entering overseas market by storm. Tina Arceo-Dumlao speaks
with Jollibee, Gingersnaps and Max Restaurants.
he 10 countries i n South-
affluent p o p u l a t i o n that is open to
east Asia that comprise the
t r y i n g something new, be it a p r o d u c t
Association o f South-east Asian
or a service, whether f r o m their home
Nations (ASEAN) formally
c o u n t r y or their neighbours i n the
established o n 31 December 2015
the
Asean E c o n o m i c C o m m u n i t y ( A E C ) ,
w h i c h is described as a single market for
goods, services, capital and labour that
has the potential to become one o f the
world's largest economies.
g r o w i n g region.
Jollibee spreading the joy of
eating
A m o n g the most successful at
conquering foreign shores is p u b l i c l y
W i t h a c o m b i n e d gross domestic
traded P h i l i p p i n e fast-tood giant Jollibee
p r o d u c t o f about U S $ 2 . 6 t r i l l i o n as o f
Foods C o r p (JFC), the largest fast-
2014 and a p o p u l a t i o n o f about 622
f o o d chain i n the Philippines w i t h a
m i l l i o n , A S E A N c o u l d become the
n a t i o n w i d e n e t w o r k o f more than 750
w o r l d s fourth-largest economy by 2050
stores a n d 80 stores across various brands
— f r o m seventh today — i f current
such as Jollibee, C h o w k i n g and Red
g r o w t h trends c o n t i n u e .
R i b b o n outside the Philippines, w i t h
These hard numbers have been
head for the international u n i t o f
a presence i n the U S , C h i n a , B r u n e i ,
attracting investors i n t o the region,
V i e t n a m , H o n g K o n g , Singapore, Saudi
a m o n g t h e m P h i l i p p i n e companies that
Arabia, U n i t e d Arab Emirates, Qatar,
have decided that they have the requisite
O m a n , K u w a i t and Bahrain.
financial,
h u m a n a n d operational
Jollibee, the i n i t i a l target market was
the substantial F i l i p i n o c o m m u n i t y
abroad. But the brands steadily
generated loyalty f r o m a m o n g the
Jollibee, whose mission is "to spread
resources to venture outside their
Fans of Jollibee pose with the brand's
mascot outside an outlet in San Francisco,
USA.
mainstream markets, a testament to the
the j o y o f eating", t o o k its first step
ability o f F i l i p i n o f o o d — such as its
towards international expansion w h e n i t
bestselling C h i c k e n Joy fried chicken
opened its first overseas store i n B r u n e i
the desire to take advantage o f the
and yumburgers — to appeal to foreign
in 1987. T h e n it went to C a l i f o r n i a ,
g r o w t h potential i n other countries
palates, a l l o w i n g same-store sales to rise.
U S A , i n 1998 and then ventured i n t o
i n the region, almost all o f w h i c h are
Saudi Arabia i n 2 0 0 8 .
c o m f o r t zone.
These companies are driven by
blessed w i t h a y o u n g a n d increasingly
" I n some countries such as B r u n e i ,
A c c o r d i n g t o Luis Velasco, m a r k e t i n g
Jollibee has crossed over i n t o the
mainstream market where the m a j o r i t y
o f the stores' customers are n o w
Bruneians, m a k i n g Jollibee the leading
Q S R chain i n that c o u n t r y today. T o
cater to the locals' taste preference i n
the countries where i t operates, Jollibee
tweaks some o f its products to attract
the mainstream market. T o a d d , we
already have 67 stores i n V i e t n a m ,
w h i c h is the highest n u m b e r o f stores
outside the Philippines that cater
p r i m a r i l y to the locals there," Velasco
says.
The success today was b o r n out o f
perseverance and the result o f learning
f r o m p a i n f u l a n d expensive mistakes.
Velasco shares that the g r o w i n g
pains included the challenge o f
finding
the right partners. Because a foreign
market is u n k n o w n territory, i t is
crucial for any b r a n d to have a partner
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w h o k n o w s the terrain w e l l a n d w i l l be
able t o provide the right i n f o r m a t i o n a n d
f o r m u l a t o make the e n t r y less p a i n f u l
and
expensive.
A l l Jollibee stores i n the U S a n d
V i e t n a m are c o m p a n y - o w n e d , b u t i n
regions such as the M i d d l e East a n d Asia,
"For any brand to thrive in the
global market, it cannot just cater
to a limited market."
— Sabrina Uy,
Founder and Creative Director,
Gingersnaps
operations are t h r o u g h either franchising
or j o i n t ventures.
" L o c a l franchisees have a t h o r o u g h
knowledge about the local market that
can help Jollibee operate successfully i n
those countries," he says.
" W e need t o ensure that we f i n d
the right people w h o also share the
same vision a n d values, as w e l l as the
US a n d South-east Asia. W e are also
was a very exciting t i m e f o r us as there
targeting n e w markets such as Canada
were o n l y a couple o f P h i l i p p i n e brands
and Europe," Velasco says.
f r o m retail that made i t overseas," she
For those w h o w a n t to f o l l o w i n its
passion i n operating a Jollibee store a n d
says.
can make i t successful i n that country,"
footsteps, he adds: "Always dream b i g ,
Gingersnaps was able to q u i c k l y
Velasco adds.
and make sure y o u r dreams are always
venture abroad because its clothes have
backed u p by hard w o r k i n p r o v i d i n g
always h a d a global appeal. U y says this
o n l y the best service a n d products to
is crucial f o r any c o m p a n y that wants to
y o u r future customers."
appeal t o a w i d e audience.
Gingersnaps' overseas foray
global market, i t cannot just cater t o a
Jollibee has learnt a l o t since i t
ventured overseas a n d believes it is n o w
i n the r i g h t p o s i t i o n t o become even
more aggressive i n its expansion plans.
W i t h the markets o p e n i n g u p and more
Filipinos g o i n g abroad, i t believes there
w i l l always be r o o m for its brands t o
make it big i n new territories.
clothes, has planted its flag i n foreign
"JFC's vision is to become one o f the
top five Q u i c k Service Restaurant
C l o t h i n g c o m p a n y Gingersnaps, w h i c h
specialises i n children's and women's
(QSR)
shores too. I t is n o w present i n seven
countries, w i t h wholesale buyers getting
companies i n the w o r l d . R i g h t now, i t is
products for sale i n other parts o f the
N o . 1 i n Asia and N o . 8 i n the w o r l d i n
w o r l d where i t has n o direct presence.
terms o f market capitalisation. O u r l o n g -
G o i n g abroad, however, was n o t
t e r m goal is for the foreign business to
really part o f the plan. The o p p o r t u n i t y
account f o r at least 5 0 % o f our system-
just arose and Gingersnaps grabbed i t ,
w i d e sales a n d we w i l l achieve this
says Gingersnaps owner Sabrina U y .
"For any b r a n d to thrive i n the
l i m i t e d market. W e have been f o r t u n a t e
to be accepted by b o t h the mainstream
markets and the F i l i p i n o market
overseas. P r o o f o f t h a t is o u r presence i n
top malls. I n the w o r l d - f a m o u s D u b a i
M a l l , f o r example, we are situated
beside C h r i s t i a n D i o r kids as well as
other prestigious brands," shares U y .
" [ W e have always l o o k e d at] quality and
design. W e have our o w n signature l o o k
and feel."
t h r o u g h organic g r o w t h a n d acquisitions.
" W e never really t h o u g h t about
"Every year, we target to open an
going overseas. I t just fell i n t o our laps.
challenges that it encountered i n c l u d e d
For Gingersnaps, the i n i t i a l
average o f at least 200 stores, h a l f o f
W e started getting numerous enquiries
having t o c o n f o r m w i t h the fashion
w h i c h are i n foreign operations. O u r
f r o m overseas a n d we t h o u g h t t o
trends i n other countries. A s the
p r i o r i t y foreign markets are C h i n a , the
ourselves: This c o u l d be a g o o d t h i n g ! I t
Philippines has n o distinct seasons,
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rei
SPECIAL FEATURE
Gingernsaps' clothes c o u l d be w o r n all
Yellow Cab Pizza, w i l l be opening soon
year r o u n d . B u t f o r some countries, i t
i n C h i n a . I t is really about realising
h a d to come u p w i t h clothes suitable
the potential o f each of the brands and
for seasons such as a u t u m n and w i n t e r .
finding
I t also h a d to strengthen its internal
w h o can help us b r i n g these brands to
processes to accommodate operations
new territories," Trota adds.
o f branches abroad.
the right international partners
Franchising is the Max's Group's
" M o s t fashion brands come f r o m
expansion m o d e l as i t aggressively
the West so we had to w o r k very h a r d
pursues its p l a n a n d Peter K i n g , C E O ,
to prove that our brand is w o r l d -
I n t e r n a t i o n a l , Max's G r o u p , says
class a n d we c o n t i n u e to do so today.
the right partner was crucial i n any
Internally, we also had to catch u p w i t h
company's plans to go abroad, especially
the seasonal requirements such as the
i n the giant market o f C h i n a .
w i n t e r l i n e . This was quite a challenge
finding
" M o s t f o o d brands w o u l d like
for us.
to enter C h i n a because the p o t e n t i a l
benefits are significant. W i t h its large
" W e also h a d to learn the nuances
p o p u l a t i o n and increasing fondness f o r
o f e x p o r t i n g , the business practices as
w e l l as the necessary d o c u m e n t a t i o n
needed. I t t o o k some t i m e to do this,
but i t was a great learning experience
for our team," says U y .
G o i n g f o r w a r d , she says
Gingersnaps remains keen o n opening
up more stores abroad t h r o u g h
Ì
Max's Group initially catered to the Filipino
diaspora but slowly gained acceptance in
the mainstream market.
franchise partners, b u t admits that i t is
deliberate i n its steps because i t is quite
selective w h e n it comes to p i c k i n g
partners.
experience o f our team, we believe we
are ready to b r i n g our loved brands to
the global scene. W e are p r o u d to share
" W e v i e w i t as a l o n g - t e r m
that we have seen a very strong interest
relationship, l i k e a marriage," says U y ,
i n our brands as we have signed five
" A n d as y o u go abroad, do w h a t i t
new foreign markets i n 2015 plus
takes to be the best. Represent y o u r
C h i n a i n the first m o n t h o f 2016, and
c o u n t r y well. Constantly innovate and
this makes us very confident that we
most o f all, love w h a t y o u do."
can b r i n g our i n t e r n a t i o n a l locations
Max's Restaurants on
partners
to 200 stores by 2020," says Max's
C E O , Robert Trota.
Trota adds that the Max's G r o u p
Just as aggressive w h e n i t comes to
has a distinct advantage because it n o w
c o n q u e r i n g foreign territories is the
has five brands that c o u l d be taken to
listed Max's G r o u p Inc ( M G I ) , one
other countries — Max's Restaurant,
o f the largest restaurant groups i n the
Pancake H o u s e , Yellow Cab Pizza,
country. A n d l i k e the other concepts, it
Sizzlin' Steak a n d Teriyaki Boy.
i n i t i a l l y catered to the F i l i p i n o diaspora
"This, I believe, is a very strong
but slowly gained acceptance i n the
competitive advantage f o r us as we are
mainstream market.
able to present different brands that
It opened its first international
can cater to various lifestyle and d i n i n g
store i n the 1980s t h r o u g h its flagship
needs. This means that there is also
b r a n d , Max's Restaurant, o n Gellert
more
Boulevard, South San Francisco, U S A ,
w h a t our business partners are l o o k i n g
f o l l o w e d by the second one i n 1984
for, a n d to offer t h e m w i t h a b r a n d
i n Los Angeles. Then i t t o o k i t a gear
that w o u l d w o r k w e l l i n a particular
up w h e n i t started to franchise the
market," he says.
beloved 70-year-old Max's b r a n d , first
flexibility
for us to respond to
"Max's Restaurant w i l l always
i n West Covina a n d has since grew the
be tied to F i l i p i n o traditions so we
international operations to include
are present i n locations that have
more branches i n the U S , Canada a n d
a strong F i l i p i n o c o m m u n i t y . The
the M i d d l e East.
other brands we are offering have a
" W e were also able to f u r t h e r
more i n t e r n a t i o n a l appeal a n d that
capitalise on the international market
is something that can go to a more
w h e n we acquired the Pancake House
diverse set o f locations.
G r o u p i n 2014. W i t h a w i d e t range
o f brands to offer and the d e p t h o f
26
" A n example w o u l d be h o w our
p r e m i u m N e w York-style pizza b r a n d ,
Franchising
is the Max's
Group's
expansion
model as it
aggressively
pursues its
plan and Peter
King CEO,
International,
Max's Group,
says finding the
right partner
was crucial in
any company's
plans to
go abroad,
especially in the
giant market of
China.
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According to Max's Group's Peter King, "the international five-year strategy is to have at least 200 stores by the end of 2020",
western f o o d , there is an o p p o r t u n i t y
other international franchisors i n
to have a large n u m b e r o f stores i f
p r i m a r y cities w o r l d w i d e .
y o u are successful. However, there are
team a n d d o c u m e n t e d operational
manuals, they can compete abroad,"
There are also at least 20 more that
he says.
m a n y challenges so M G I has entered
can penetrate second-tier cities i n the
C h i n a using a master franchise m o d e l .
A E C , a n d indeed the rest o f the w o r l d ,
comes t o franchising, the Philippines
W e believe we have a great Chinese
says L i m .
has a wealth o f knowledge and
partner w i t h the Z h o n g f a G r o u p w h o
H e believes that i f they have made
L i m also stresses that w h e n i t
expertise to lean back o n .
understands the local market a n d has
their m a r k i n the local market, w h i c h is
access t o great real estate," K i n g says.
as competitive a retail market as those
has the second-largest p o o l o f
H e shares that the Philippines
abroad, a n d w i t h foreign franchises
professionally-certified franchising
strategy is to have at least 200 stores by
g i v i n g t h e m a r u n for their money, they
executives i n the w o r l d , next to the US
the e n d o f 2 0 2 0 . To achieve that goal, I
have the strength to make it elsewhere.
and this, c o m b i n e d w i t h the F i l i p i n o
"The i n t e r n a t i o n a l five-year
need t o sign at least three new partners
" I f they have successfully franchised
entrepreneurs' search f o r g r o w t h , can
each year plus ensure that our o w n
their business i n the c o u n t r y and have
be relied o n to f u l f i l t h a t desire t o test
existing franchisees c o n t i n u e to g r o w
proven their a b i l i t y to transfer the
its mettle against foreign counterparts.
and open more stores. I a m confident
k n o w - h o w o f r u n n i n g the business,
we can be successful i n b o t h these
they have the financial resources a n d
areas," he adds.
Philippines, they can make i t
proper needed management support
anywhere, r a
As for advice, K i n g says i t is
i m p o r t a n t to conduct t h o r o u g h
research o n the area y o u are interested
in.
"Are there any barriers to e n t r y
that y o u need t o be aware of? C a n y o u
provide a robust supply chain solution?
M o s t i m p o r t a n t l y , y o u need t o ensure
that y o u have a partner w h o matches
y o u r ideals, a m b i t i o n and c o m p a n y
culture," K i n g stresses.
Samie L i m , chair emeritus o f the
P h i l i p p i n e Franchising Association,
adds i n an i n t e r v i e w that there are at
least a dozen world-class P h i l i p p i n e
franchisors already c o m p e t i n g w i t h
I f they can make i t i n the
Samie Lim, chair emeritus of the
Philippine Franchising Association,
adds that there are at least a dozen
world-class Filipino franchisors
already competing with other
international franchisors in primary
cities worldwide
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