Why Woodpeckers Group is ready to raise a homegrown brand

The group recently signed a 20-year national franchise agreement with a Thai company.

After growing the Spanish frozen yoghurt brand IlaoIlao to 100 stores in Malaysia, resulting in a 55.7% increase in points of sale since 2022, Woodpeckers Group Sdn Bhd is ready to build its own brand.

Woodpeckers Group has been around for eight years, with brands such as Tapas Club, Pebble, and its biggest brand IlaoIlao in its portfolio. However, the brand currently does not own a homegrown brand in Malaysia.

Just recently, the group signed a 20-year national franchise agreement with Cha Thai International Company Limited to launch the Thai bubble tea brand ChaTraMue in Malaysia. This is the first franchise agreement outside of Thailand for Cha Thai International Company Limited.

Talking with QSR Media, Tan Kai Young, CEO of Woodpeckers Group, and Brand Operations Manager Ricky Tjandra said that the Thailand group approached them through an intermediary to be a franchisee.

“They wanted to try offering someone the whole franchise exclusivity for a whole country. They started with Malaysia because a lot of Malaysian tourists that visit Thailand drink ChaTraMue so brand recognition is there,” Kai Young said.

Ricky added that the entry of an authentic Thai milk tea brand in Malaysia is also the perfect time. 

“Malaysia has its own milk tea called Teh Tarik. We also have Hong Kong brands offering Hong Kong milk tea which has its own distinct flavour. However, there is a gap in the market for authentic Thai milk tea. So that’s where ChaTraMue comes in,” Ricky explained.

Ricky said this is especially true near the northern side of Malaysia, which is near the border between the two countries where a mix of Thai and Malaysians are staying.

Woodpeckers Group plans to launch eight to 10 ChaTraMue outlets this year. According to Kai Young, because of their experience in growing Ilaollao, they already have a deep understanding of the demographics in play to expand a franchise. This means Woodpeckers Group will be targeting malls and other shopping centres for the brand, nearly the same strategy they have for Ilaollao

“We will be opening in the mall first, focusing on the central and northern regions. After that, once most malls have already been occupied, then we will expand out of the malls to shop block areas,” Ricky added. The group said they are targeting to be available everywhere in three to four years’ time.

Kai Young also said they are also banking on ChaTraMue which is a cheaper option for consumers. The price of a single drink starts at RM9 ($1.93)

“This will get a lot of people to try to come and try the product, especially when there is no authentic Thai milk tea brand in the market right now. 

Kai Young also said they are banking on the brand’s unique flavours as it utilises a special blend of tea with the brand’s tea leaves grown specifically for the brand.

“Being in this industry for eight years, we have learned many things from our principals, we have learned many things from our peers, and we have built a very strong team now. And I'm very confident that we will be able to have our own brand as well, that will be very successful,” Kai Young said.

Consumers

With 100 outlets for Ilaollao, the Woodpeckers group is targeting to reach 130 outlets before the year is out. Kai Young attributed the success of the brand to them always listening to what the consumers want.

Currently, the number one thing consumers in Malaysia want is affordable pricing.

Kai Young said they are attacking this in an entirely different way.

“All big brands, if you want to scale to 200 or 300 outlets, consistency is key. Wherever consumers go, it must always be the same kind of product, the same kind of service, and the same kind of look. It always has to taste premium. Even with ChaTraMue with its affordable pricing its taste still has to be of a good quality and not something anyone can make or else there’s nothing special about it,” Kai Young said.

“Sometimes it's not about making money. Most of the time it’s about giving back to the people who are loyal to you. We are fully aware of the local community and we are glad for their loyalty and support.”