Can’t say that we didn’t see this coming.
A week after Rodney Tang, General Manager of RTG Holdings and ex-franchisee of Gong Cha declared that all its 80 outlets were to be converted to LiHO, its parent company is now back to reclaim their cash cow.
Kim Soo-Min, president of Unison Capital and co-owner of the Gong Cha brand alongside founder Royal Tea Taiwan Co. is promising to bring back the chain in the next few months in a “bigger, better, upgraded format”.
As a brief background: in April last year, Gong Cha Korea (bought over from its Korean franchisee and re-launched by Kim in July 2014) expressed their interest in acquiring the global headquarters, Royal Tea Taiwan Co, and in October, wanted to boost its ownership of the headquarters from 35 to 70% by January 2017.
Expressed Kim, “We just want to make clear to our Singapore customers that we are not leaving the market and we plan to come back pretty soon.”
This is probably also in response to the outpouring of groans from Gong Cha fans who mourned the loss of their favourite bubble tea flavours.
In fact, its final outlet at Marina Bay Sands was drawing longer-than-usual queues leading up to the 5 June deadline.
“Together with Korea and Taiwan, Singapore is one of the most strategically important and successful markets for Gong Cha’s growth so there’s no way we want to leave,” said Kim to The Straits Times.
With an annual revenue of S$30million from its local outlets itself, the loss of Singapore in its stable is definitely a huge blow to Gong Cha’s overall turnover, which was S$96.6million last year.
Interesting to note is that albeit having only 80 out of the 1,400 total Gong Cha outlets worldwide located here, Singapore is one of the top three contributors to the brand’s turnover.
Kim – “It Is Not LiHO Vs. Gong Cha”
With regards to the news, Tang remained cordial in his response, stating that “The brand has a special place in the hearts of Singaporeans and I wish them all the best making it as big as we did in the last eight years.”
This comes in contrast to last week, when Tang publicly declared that he “felt betrayed” when he wasn’t informed of the selling of Royal Tea Taiwan Co. to Gong Cha Korea – thus spurring him on to take matters into his own hands.
In response to the termination, Kim broke the silence, expressing that while “It’s sad that things didn’t work out and we had to terminate that relationship, but I think both parties have to move on.”
“We had a tremendous relationship with Rodney.”
Currently, both Unison Capital and Royal Tea Taiwan Co. are said to be in talks with potential partners for the comeback, but “have not yet decided whether it will return as a franchise again, or be directly-owned”.
But Kim reiterates that their return is less about competition, but more to “bring back what Singaporean customers loved about Gong Cha”.
“We are not here to compete with LiHO. It is not LiHO versus Gong Cha.”
“I think it’s time to bring new colour to the Singapore market, for example, by introducing a more modern look to our stores and logo and a new menu which we’ll customise for Singapore customers.”
Eventually, It Will Still Be LiHO Vs. Gong Cha
Regardless of the pleasantries exchanged, the fight for the tastebuds in Singapore is still inevitable.
With the return of longtime favourite Gong Cha to the game, there won’t just be one more competitor in the saturated bubble tea market – LiHO, now seen as an ‘ex-Gong Cha’ would need to work even harder to carve a niche for itself.
On social media, while there are hardcore Gong Cha fans are rejoicing that order is restored in the bubble tea universe, some are pledging their support for LiHO, a homegrown Singaporean brand.
But #supportlocal or not, what really matters in the end are customers, and how these business manage to retain them.
What do you think? Would you move over to the LiHO camp, or await Gong Cha’s return?
Featured Image Credit: eatandtreats.blogspot.sg