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BreadTalk boss goes hands-on overseas
Publication Date : 30-07-2013
His strategy of staying in China to oversee franchises there has paid off
If you want something done, you have to do it yourself, even if that means stepping back, leaving your thriving business in Singapore and venturing into foreign fields.
That was the strategy adopted by BreadTalk Group chairman George Quek when he took the gamble of setting up shop in China in 2003.
Quek, 57, spent most of his time in the country to personally oversee the franchise outlets, a decision he acknowledges was not easy.
Letting a Singaporean manager work alone in China while you manage him from Singapore is difficult, he added.
Quek tells The Straits Times in Mandarin: "Everyone has made the same mistake, including me. As Singaporeans, we think Singaporeans are good, so we send them to China. But a manager manages fewer people here than in China.
"And for someone without experience, who is sometimes unable to make a decision on the spot, it can't work unless you go there to take charge."
Taking such a hands-on approach has helped generate explosive growth for BreadTalk, which now has more than 630 outlets, including other brands in the bakery division like Toast Box, across 15 countries, including Indonesia, Malaysia and Thailand.
Plans are in place to have 1,000 outlets by the end of next year. The company employs 7,000 people.
Quek could not have done it without raking up 20 years in the food and beverage business first, operating businesses in Taiwan - such as selling dragon beard candy from a pushcart - Hong Kong, China and Japan, before opening a BreadTalk shop in Singapore in 2000.
There were bumps along the road, including a painful experience when a friend of Quek's older brother took off with over 40,000 yuan (US$6,520) from opening an ice-cream shop he had started in Shanghai in 1993.
"It was tougher than being in Taiwan. When it was 5 deg C in winter, my room temperature was 0 deg C. When it was 35 deg C in summer, it was 40 deg C," he says, referring to other tough conditions.
Those rough and tumble early days have given Quek a deep knowledge of the boisterous China market and allowed him to be a mentor for other brands going international, such as shoe label Charles & Keith.
"Charles & Keith asked me if it was worth going to China. I said yes, but you must personally be there. And Charles has been there for three years now," he notes.
"If you send a manager with no prior experience in China to the country, you will fail. You can slowly groom a team but, in the beginning, if you can't find someone, you have to lead them."
Going to China will not be a bed of roses, warns Quek.
"I went alone, without my wife and kids, but I didn't want to stay there long-term. I spent half my time in China, running back and forth from Singapore."
But experience makes the businessman, adds the father of three, who used his in-depth, hands-on knowledge of Asia to start BreadTalk's first franchise outside Singapore, in Indonesia in 2003. It opened a shop in Shanghai later that same year.
He says: "We're familiar with Asian cities but not so much Europe and America as we haven't devoted as much resources there.
"Research is a must but experience is even more important. Don't show me the numbers. I'll know the market after living there for a while."
Quek often seeks fellow entrepreneurs with a common goal when it comes to franchising.
In Indonesia, he teamed up with Johnny Andrean, who had a successful hair salon chain.
"I chose him because of his eye for fashion, creativity, people. We had common ideals... and he touched me when he gave me his word to work on BreadTalk full-time. Today, Indonesia has more than 100 outlets."
The same high standards apply to those joining the company. They have to be hard-working and willing to learn.
BreadTalk's business model is structured on having 60 per cent of outlets franchised and 40 per cent owned by the company.
Quek, who plans to keep it that way, says franchising allows the brand to expand more quickly, but there are pros and cons.
There is definitely huge merit in having control over the brand, especially in China, where "sometimes the franchisees don't listen and don't tell you what they do".
The market was different too. For example, it was difficult selling bread in Shanghai because it would be considered expensive at S$1.30 (US$1.03) per item.
The food court business in China was also in the red for seven years. Quek lost his savings and took a year to rework the business before it started making money.
In the Middle East, the firm had to tweak its products as the locals love cookies and chocolates.
"Out of 10 products, six are made with chocolate and cheese," says Quek.
"I have done relatively well in entering China because I've paid my 'school fees' after failing a lot."
BreadTalk has three divisions - bakery, food courts and restaurants, including brands such as Food Republic and Din Tai Fung.
It had an annual turnover last year of S$447.3 million with a net profit of S$19.4 million.
New frontiers are on the horizon as well, with the company having been approached with opportunities in Canada and America.
But for now, Quek wants to focus on expanding the group without adding new brands to the BreadTalk family.
"We don't have to keep coming up with new brands, but we need to constantly renew and refresh the current ones to improve.
"A friend asked me, what happens when you reach 1,000 stores? Then we start the process all over again until we reach at least 5,000 outlets."