How Chinese F&B Brands Succeed in Singapore’s Competitive Market: Lessons from Haidilao

Singapore boasts a highly developed economy and a mature business environment. Its multicultural background and open market atmosphere have attracted numerous catering companies to expand their businesses here.

Today, let's talk about the setbacks that Yang Guofu, Haidilao, and Bawangchaji experienced, and how they managed to gain a foothold in Singapore.

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01 Haidilao

From a small corner of Jianyang, Sichuan, to the international stage in Singapore, Haidilao has written a legend in China's hot pot industry. Its founder, Zhang Yong, also ranked sixth on the 2023 Forbes list as the company's internationalization strategy was implemented!

In 2012, Haidilao, as a pioneer of Chinese catering brands, opened its first store in Singapore, located in Clarke Quay. At that time, the Chinese food market in Singapore was still in its infancy, and Haidilao faced the primary challenge of building its supply chain.

The way to break the deadlock

·Establish a central kitchen with heavy investment

During its expansion in Singapore, founder Zhang Yong realized that internationalization was not the immediate priority; streamlining processes and establishing systems were key. Therefore, Haidilao established a central kitchen in Singapore, gradually building and improving its local supply system to achieve localized sourcing of ingredients, centralized production, preliminary processing, and distribution, thereby improving supply chain efficiency.

Haidilao overcame numerous difficulties in this process. It invested significant funds and resources to ensure timely supply and quality control of ingredients. Simultaneously, it had to meet Singapore's stringent food safety regulations, ensuring that its central kitchen operations complied with local standards.

Style localization

In addition to localizing its supply chain, Haidilao has also localized its flavors and stores to cater to local tastes.

Flavor iteration

After preliminary research, a spiciness level was specially set up in the ordering equipment. In terms of flavor, the dipping sauce includes small green tangerines, which are popular in tropical countries, and Singaporean-style laksa and mala milk hot pot are available. The menu has been expanded to include large bread crabs and other seafood, as well as local products such as 8-second fried tofu skin.

Scene upgrade

In terms of stores, Clarke Quay's flagship store launched its first pop-up store on ice, allowing consumers to enjoy ice hot pot near the equator through the Ice and Snow Hot Pot Menu

These measures enabled Haidilao to quickly establish itself in Singapore, becoming a top-tier Chinese brand in the country, with long queues often forming at its stores and outstanding performance.

02 Yang Guofu Malatang

On November 26, 2020, Yang Guofu Malatang opened its first store in Singapore, SingPost, for trial operation, officially starting its journey in the Lion City.

Its positioning in Singapore is New Chinese Light Food, with an average order value of 18-25 Singapore dollars, filling the gap between food courts (8-12 Singapore dollars) and restaurants (30+ Singapore dollars).

Precise site selection

They launch different operating strategies based on the surrounding conditions at different locations in order to attract more customers.

Establish local supply chains

Although Yang Guofu Malatang has a mature supply chain system in China, it also faces the challenge of rebuilding and optimizing its supply chain in Singapore. It needs to ensure the freshness, quality, and stability of its ingredients to meet the needs of local stores. At the same time, it must adapt to Singapore's logistics and procurement environment and establish good relationships with local suppliers, which requires a significant investment of time and effort.

Flavor localization

Although Singapore has a large Chinese population, its overall cultural environment still differs from that of China. Yang Guofu Malatang needs to maintain its brand characteristics while undergoing a degree of localization to better suit the tastes and eating habits of local consumers. For example, careful consideration and optimization are needed in areas such as ingredient selection, spiciness adjustment, and service methods.

Successfully established in Singapore

Integrated supply chain

When we first entered the Singapore market, we encountered the challenge of the Great Influenza. However, all employees worked together and relied on a strong integrated supply chain. From the source of ingredients to processing and production, and then to the output of finished products, we implemented fully automated production and intelligent operation, provided standardized and large-scale supply chain services, ensured the consistency of brand taste and food quality and safety, and helped franchisees quickly integrate into the local market.

Digital Operations

By connecting to food delivery platforms, their order volume has increased significantly.

Through localized operations, Yang Guofu has not only attracted Chinese customers but has also gradually gained popularity among local residents. Its joint venture model in Singapore combines the efficient management advantages of direct operation with in-depth managed services, laying a foundation for steady development in overseas markets.

03 Overlord Tea Princess

BaWang ChaJi was founded in Yunnan in 2017. In 2019, it attempted to enter the Southeast Asian market through a franchise model. In 2020, its first store in Singapore became an instant hit. By October 2023, the number of stores had grown to 12, making it a phenomenal tea beverage brand in Singapore.

Major reversal! Franchisees betray them?

In early 2024, franchisees suddenly changed their names and official accounts, with all stores changing their names to amps tea and their signs to with tea. Meanwhile, BaWang ChaJi's official account temporarily withdrew from the Singapore market, stating that they needed to upgrade their products and spaces for a better future meeting.

This situation has sparked much speculation among netizens. Is it a normal brand operation adjustment, or a betrayal by a local franchisee? Opinions are varied and widely discussed on social media.

Regroup

Faced with this challenge, BaWangChaJi did not lose heart. Instead, it quickly adjusted its strategy and made a high-profile return to Singapore in August 2024 with a fully direct-operated model. Upon its return, BaWangChaJi strategically placed stores in prime commercial areas, with its first store opening immediately sparking a queuing frenzy and attracting over 10,000 visitors in the first three days.

Localization strategy adjustment

In terms of the team, it is led by Lawrence Wen, CEO of Southeast Asian food delivery giant, with Google-affiliated HR in charge of talent management, an internet-based operations team leading a fast-paced approach, and local employees accounting for more than 70%, which strengthens cultural integration and service experience.

In terms of pricing strategy, the company proactively adjusted its pricing system to target mainstream consumers, aiming for uncompromising quality at more affordable prices to create a competitive advantage. Regarding event planning, pre-opening pop-up events, social media sharing, and tear-the-cup-to-win-prizes activities leveraged TikTok's local influencer marketing to quickly rebuild brand awareness. On the supply chain front, a cross-border direct-control supply chain system was established, with closed-loop management from raw materials to formulas, completely eliminating the risk of channel loss of control. Regionally exclusive products were also launched, incorporating Southeast Asian flavors into classic tea beverage recipes.

04 Lessons from Catering Companies Going Global

The overseas expansion stories of these three catering companies in Singapore are like a thrilling adventure. On the Lion City's soil, they successfully overcame various challenges through innovation and strategy, showcasing the strength of Chinese catering brands and providing valuable inspiration for the industry. Hopefully, these stories will offer some inspiration and motivation.

It is worth noting that there are many aspects to consider when registering and operating a food and beverage business in Singapore, such as halal certification, the proportion of local employees, whether there is heavy cooking (such as stir-frying and deep-frying), and whether alcohol is sold and the time of day for alcohol sales, etc.