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 Image credit:  vulcanpost.com

Image credit: vulcanpost.com

What F&B entrepreneurs can learn from the veteran bringing Gong Cha back to Singapore

 

Update, 4 Aug: This article has been updated to correct an inaccuracy. A spokesperson from Mr Bean Group has confirmed that the rumour that they’re working with Gong Cha for the relaunch is not true. However, Mr Bean co-founder and former Managing Director Kang Puay Seng (he left the Group in 2015) has indeed registered as Gong Cha Singapore’s director. Gong Cha Singapore has not responded to queries.

When the last Gong Cha outlet at Marina Bay Sands closed on 5th June, many Singaporeans mourned our loss – by queueing up (our favourite pastime) and of course on social media.

 The queue on Gong Cha's last day at Marina Bay Sands. Image credit: vulcanpost.com

The queue on Gong Cha's last day at Marina Bay Sands. Image credit: vulcanpost.com

There was a lot of press about Rodney Tang, the general manager of RTG Holdings, and how he felt “betrayed” by the sale of Gong Cha’s parent company, Royal Tea Taiwan, to Gong Cha Korea, which is in turn owned by Unison Capital. The Gong Cha brand is now co-owned by Unison Capital and Royal Tea Taiwan.

The new terms were more restrictive, with clauses that would have affected his ability to manage RTG's other brands effectively – and this led to his leaving the franchise, closing down all Gong Cha outlets in Singapore and replacing them with his own homegrown brand, LiHo. Reviews of the much-hyped Cheese Tea, which has been perpetually sold out, are albeit mixed.

Gong Cha made a public statement in June that they will be returning to Singapore “in a few months”, promising a more modern facade and logo, plus a menu customised to the Singaporean market.

 

So who won the race to bring our beloved Gong Cha back to Singapore?

Just before the conversion to LiHo, Gong Cha Singapore was worth about $30 million in revenue annually – so competition to be the next franchisee of Gong Cha would undoubtedly be fierce. According to the Straits Times, Mr Kim Soomin, a partner at Unison Capital, stated that they have had "multiple enquiries since the news broke, from potential business partners ranging from individuals to food and beverage companies that already have business operations in Singapore and some financial investors too."

Gong Cha is said to be returning to Singapore in a “bigger, better, upgraded format.” With such ambitions, who would Gong Cha choose as a local partner that can help it scale?

Hint: He's related to a familiar brand.

Have you guessed it yet?

 

It’s the co-founder of household brand Mr Bean.

Kang Puay Seng started Mr Bean at a hawker stall in People's Park Hawker Centre together with co-founder Loh Jwee Poh, and in June 2015, he sold his shares to Mr Loh and left to pursue his own interests. Mr Loh is now chief executive of Super Bean International, the managing company of the chain, and Mr Kang registered as Gong Cha Singapore’s director last week.

So does this mean we can begin anticipating Gong Cha’s relaunch perhaps in the next couple of months?

And given that there were potential business partners aplenty for Gong Cha, why is the founder of Mr Bean an ideal candidate?

 

Operational Expertise

Kang Puay Seng has over 22 years of experience building Mr Bean up from a humble stall in People’s Park Complex to 60 outlets in Singapore and overseas. He is experienced in the managing of preparation and sale of beverage products locally, which will bolster Gong Cha’s expansion plan in Singapore. The format of Gong Cha's outlets are similar to Mr Bean outlets, which are small kiosks and being so familiar with the economics of operating efficiently in a small environment is a distinct advantage.

 

The young consumer market

Mr Bean is known for its youngster-friendly pancakes, ice creams, and puddings, and new beverage flavours like Taro Soya Milk and Chocolate Soya Milkshake are regularly launched to keep product offerings fresh. Their mascot is an energetic bean and they even sell Mr Bean merchandise to target younger consumers. Mr Bean outlets are strategically situated where young consumers are typically found – near schools, in shopping malls and MRT stations. With the development of a successful formula like this, things look very optimistic for Gong Cha, which itself needs no introduction. 

 

Strong relationship with landlords

Good retail space is a highly sought after commodity in Singapore, and when it comes to food, there is no lack of competition for quality F&B locations. With Mr Kang's wealth of experience working and negotiating with commercial landlords such as mall and MRT operators, Gong Cha will be in a good position to have access to prime locations at competitive rates.

 

Setting up a central kitchen

The key to high volume yet low costs is strong backend operations that can support a large number of outlets. Having a central kitchen is crucial for Gong Cha to scale as it minimises the amount of production required at individual outlets. Fortunately, Mr Kang has the expertise of setting up a central kitchen adept at producing large quantities of beverages. The central kitchen and experience managing it will be a huge asset in the business model.

All things considered, we think that the Gong Cha has picked a truly solid partner in Singapore for its return. Share your thoughts with us!

* Edit: This article has been updated to correct an inaccuracy. Mr Kang Puay Seng is no longer the Managing Director of Mr Bean and has left Mr Bean since 10 June 2015 to pursue his own undertakings. 

This article first appeared on iCHEF.


Cheryl Tay is the editor and marketer at iCHEF Singapore. She also manages iCHEF Club, a growing community of F&B owners in Singapore – organising events, the blog, an online newsletter and the F&B Entrepreneur Bootcamp, the only regular workshop on opening a new restaurant in the country. In her spare time, she attempts to read every book that’s ever won a literary prize and watches cat videos. Like any proper Singaporean, her love for food runs deep – especially spicy food. Chili is life. 


 

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