SHANGHAI: Loob Holding plans to set up 10 corporate stores in China this year before franchising its Tealive bubble tea business to local entrepreneurs in the world’s second-largest economy.
The Malaysian based food and beverage company, which aims to set up 500 Tealive outlets in China within three years, said the plan is to ensure that it maintains an asset-light strategy for the expansion.
Speaking to reporters after the official opening of the group’s first Tealive flagship store in China here yesterday, Loob CEO Bryan Loo (pic) said: “In China, where the investments are high, we would like to keep it as an asset light model, where we will franchise most of our stores.
“But before we franchise the business (based on our learning experience in Malaysia), we will set up our corporate stores here. We will first set up 10 corporate stores to test and prove the model, and then only, we explore to franchise to local entrepreneurs in China in order to get to the goal of 500 Tealive stores within three years,” Loo said.
According to Loo, the group’s second flagship Tealive outlet in China would be opened in Hangzhou in two months. He said the outlet in Hangzhou would be about three times the size of its Shanghai outlet, which was the group’s first flagship store set up in China last November.
The official opening of the Shanghai Tealive outlet yesterday was graced by Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail.
Loob, which owns the Tealive brand, first announced its entry into China last year through a joint-venture with local China food and beverage partners, namely Zhejiang Boduo International Trade Co Ltd and Shanghai Panfei International Trade Co Ltd.
Through the joint-venture, in which Loob has a 51% stake, Tealive became the first Malaysian bubble tea brand to enter China.
Loo said, he and his partners decided to create a specific menu for China to showcase South-East Asian ingredients including durian, cempedak, gula melaka, Bentong ginger and Sabah origin tea, in order to different themselves from other brands in the tea-drinking nation. To localise Tealive drinks further, there were also hot drinks for the wintry months.
Meanwhile, Loo said his group is looking at setting up its own tapioca pearls factory in Klang, Selangor, by the third quarter of 2019.
“Tapioca is a raw ingredient from Malaysia so it makes sense to produce the pearls in the country, and leveraging on our joint-venture partners from China, who are the largest F&B ingredients in China, we are looking at setting up the plant to produce tapioca pearls that will be exported to Asean and China,” Loo said.
Separately, Saifuddin said he hoped more Malaysian franchisors would expand.
In acknowledging Loob’s success in breaking into China’s market, Saifuddin said the Government remained committed to supporting and facilitating Malaysian brands in expanding overseas.
Loob currently operates about 220 Tealive outlets in Malaysia, six in Vietnam and two in Australia.
Loo said Tealive, which had appointed a master franchisee in India, would see the first store open in the country in the next two months.
Besides Tealive, Loob also has six other brands in its portfolio. These include Gindaco, Croissant Taiyaki, Define: food and Define: burgers, Kokokai and Soda Xpress.