Chatime Makes its Mark at the Louvre

The Pride of Taiwan and the First Asian Brand Enters the Louvre

Quoted from Apple Daily report

Chatime, the main brand of La Kaffa International (TAIEX: 2732), picks up the pace of store expansion in Europe and Latin America this year and becomes the first Asian restaurant brand to open its store in the Louvre in Paris, France. Chairman Wang Yao hui said, the cost of store expansion at the Louvre is 2.5 times higher than that of street shops, though, it is more beneficial for the promotion of our brand awareness. In the future, the company will aim for the revenue of 5 billion NTD in 2019 through international expansion and continuing acquisition.

Founded in 2007 and expanded overseas in 2010, Chatime has nearly 800 stores in total in 38 countries globally. According to Wang Yao hui, the revenue of La Kaffa International from last year was 2.5 billion NTD with the revenue from overseas accounted for 60 – 70%. This year, revenue is expected to be 3.6 – 3.7 billion NTD. The store expansion this year is the fastest in Europe and Latin America, whereas it is the most prominent in France among European countries.

Wang Yao hui believes that it will be easier for future expansion if the two countries of France and the UK can be firmly secured as both countries are still the political and economic centers for European countries. In a mere one and half a year, the store count of Chatime has reached 11 in France and they are located at popular attractions, such as University of Paris, Notre Dame, Printemps department store and Palais Garnier. The store at the Louvre is the first and only one opened by an Asian restaurant brand except for MacDonald and Starbucks.

Unlike the traditional expansion plan of other tea drink brands, which is centered on the Chinese market, La Kaffa International’s international expansion starts from Southeast Asia. This year, stores will be opened in Mexico, Columbia and the Czech Republic. Wang Yao hui said he plans to open more stores in Mauritius, Belgium, Italy and Sweden. Except for Indonesia where more than 200 stores are set up, it is expected that a scale of 100 stores will be reached respectively in Australia, the Philippines and Canada in the next two years.

Even with the store expansion being carried out at a quick pace, Wang Yao hui has his own set of business philosophies. As an electronics industry veteran, he not only understands the trend of internationalization, but also puts an emphasis on standardization. When he chose to enter the tea drink industry, he had managed to replace men with machines for tea preparations, that is, to replace the traditional means with technology and standardization. Once tea preparations can become technical and standardized, the speed of internationalization can be accelerated.

Wang Yao hui believes that the key factor of La Kaffa International’s rapid internationalization is the brand’s added values. The targeted customer base is more than Chinese, which provides higher market potentials. As to whether the store count and operational scale in Taiwan will be expanded, he replies that it is highly difficult to implement the low-price strategy with a lot of street shops set up in Taiwan as La Kaffa International has invested relatively high in food safety inspection and laboratory setup. Overseas development will remain the highlight of the company’s future.

Due to the IPO cost for the company’s KINGZA International and the brand investment in Australia, the earning per share of the first quarter is merely 0.42 NTD. But, Wang Yao hui believes the effect of one-time costs in the second quarter will decrease significantly. The high season for tea drinks is approaching. It is expected the profit will recover steadily in the second quarter.