Jollibee targets 500 stores in China by 2014
MANILA, Philippines – Homegrown food giant Jollibee Corp. is aiming to boost its footprint in China to 500 stores, according to founder and president Tony Tan Caktiong.
The food and beverage conglomerate currently has 400 stores across its brands in China and is looking to add another 100 by next year.
In China, Jollibee operates brands Yonghe King (which was acquired in 2005), Hong Zhuang Yuan (in 2008) and San Pin Wang (in 2012).
“One of the reasons why our profit growth in the first quarter 2013 of 33% was strong was because a big part of that came from China. We have a very good trend and our estimate is by next year we will reach 500 existing brands stores,” said Caktiong.
In Jollibee's first quarter 2013 results, China led the growth with 27.1% sales increase. Southeast Asia and the Middle East grew 23.8%, Philippines 10.3% and US 9.2%.
In 2011, Jollibee established headquarters in China — a research and development center in Beijing and a food processing center in Anhui province.
The food conglomerate whose brands include Jollibee, Greenwich, Chowking, Red Ribbon, Mang Inasal and Burger King, has been steadily expanding its brands internationally, particularly to countries with large Overseas Filipino Workers (OFW) populations.
According to Caktiong, sales in their stores across the Middle East has also been doing well. Middle East is a key destination for Filipino nurses, engineers, maids, and others who seek greener pasture abroad.
“More of our stores in the Middle East have very high same-store sales. [There are] double-digit growth rates across countries in the Middle East. In Saudi Arabia, Dubai and Kuwait the same-store sales are very strong,” he said.
Caktiong said that while they have had a lot of offers from Myanmar, they haven’t yet looked into the opportunity. Myanmar is one of the key developing markets investors have been eyeing for expansion.
“We’ve not really looked at Myanmar yet but there are a lot of interested parties who are convincing us to move there,” Caktiong shared.
The food conglomerate has also recently voiced interest in expanding in Indonesia and India.
The international expansions come as part of Jollibee's strategy to have a 50:50 ratio for its foreign and local businesses in the next 5 to 7 years to maintain overall growth trajectory.
Jollibee currently has 80% of its operations in the Philippines and 20% based abroad. “Probably by the end of the year this ratio will change slightly to 79% Philippines, 21% abroad," he said.
The stellar performance of the Philippine economy, however, is making officials rethink the target ratio. The Philippines grew 7.8% in the first quarter, one of the highest rates in the world.
"While business abroad is growing well, the Philippines is also growing well. When both are doing well it’s difficult to quickly change the ratio," said Caktiong.
"The Philippines is growing so fast so if you want to change the ratio you have to grow faster," he explained.
In 2012, the Jollibee group opened a total of 223 new stores: 135 in the Philippines and 88 abroad. At the end of the year, it was operating a total of 2,074 stores in the Philippines and 554 stores overseas. - Rappler.com