FRANCHISING | Staff Reporter, China

BreadTalk Group lays down expansion plans in China with new strategic partnerships

One agreement involves the growth of a bak kut teh brand in Shenzhen and Guangzhou.

Signifying their ambition to grow in China, BreadTalk Group (BTG) has signed new partnerships to expand their presence in the country.

Most recently, the BreadTalk-Pindao venture signed its own joint venture agreement with Song Fa (SF) Holdings to grow the latter’s bak kut teh brand in China.

Under the agreement, BTG-SF-Pindao, through its wholly owned subsidiaries, will take over in operating and managing the Song Fa brand of restaurants in Shenzhen and Guangzhou that was originally covered under a previous agreement between BTG and Song Fa.

The BreadTalk-Pindao venture resulted from a joint venture agreement (JVA) between Together Inc Pte Ltd, a wholly-owned subsidiary of the Group and Shenzhen Pindao Food & Beverage Management Co Ltd to operate and manage the Nayuki and Tai Gai tea beverage brands in major Southeast Asia markets, including Singapore and Thailand.

(Also read: BreadTalk Group to introduce two tea beverage brands in Singapore and Thailand)

BTG says the new tripartite partnership would allow them and SF to “leverage on Pindao’s resourcefulness in sourcing strategic locations” in Shenzhen and Guangzhou, while “developing sustainable talent pipelines through effective recruitment strategies.” This will supposedly allow Song Fa to focus on operating its bak kut teh franchise to consumers in both cities.

“Shenzhen Pindao is hugely successful in guiding their brand towards explosive growth in the last three years. We observed that their success was primarily attributed towards creative and quality products, securing choice locations and building highly motivated teams. Through this alliance, we are confident of scaling new heights and bringing sustainable success through Pindao’s experience to develop the Song Fa brand as a market leader in South China,” BTG chief executive officer Henry Chu said in a statement.

Increasing direct-owned outlets
In a separate JVA, the group’s Shanghai BreadTalk subsidiary is also eyeing to make their presence felt in Chongqing by partnering with franchisee Ge Ying to operate the brand of bakeries in the area and potentially expand in the South-Western market.

Currently, Ge and his team manage the BreadTalk brand of bakeries in Tibet Autonomous Region (“TAR”) for the last six years. Under this agreement, Shanghai BreadTalk will hold a 30% stake while 70% will be owned by Ge Ying.

“This joint venture is aligned with our Group’s long term direction of increasing direct owned outlets in Mainland China. Looking ahead, it will serve as a good foundation for us to build a strong South-western China base in Chongqing, enabling us the opportunity to penetrate further into other South-western markets like Yunnan and Guiyang provinces,” BreadTalk Group’s Bakery division chief executive officer Tan Aik Peng said.

(Photo credit: Breadtalk)

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