A record number of Chinese restaurants and cafes have flooded Singapore over the past year, using the island as a test bed for global expansion as they escape pallid consumer demand, extreme price competition and super-squeezed profit margins back home.
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Gateway Singapore
Traditionally a bridge between Eastern and Western cultures, Singapore is an ideal gateway for expansion with its 6.1 million predominantly Chinese population, said officials at Chinese firms. It is also a wealthy, fashionable place so having a presence there is for good branding, they said.
“If we can build up our brand in Singapore, the brand awareness can go to Malaysia and Vietnam, even Indonesia,” said ChaPanda’s Jia.
Some smaller Chinese names are often backed by deep-pocketed investors, allowing them to outbid local rivals for prime locations.
Michelin-starred Yong Fu from Shanghai, for example, entered Singapore last year with an investment of S$10 million.
The sum covered renovation and provides liquidity for rental, staff and other operational costs such as a wine cellar for about five years, said Ye Cheng Zhong, a Yong Fu director and one of three investors.
With Singapore as phase one, he plans to take Yong Fu to London at the end of the year, then New York and Paris next year.
Investment from large Chinese conglomerates, however, has pushed up rent, particularly in high-traffic areas where the supply of commercial space is tight, said Ethan Hsu, head of retail for real estate firm Knight Frank.
Moreover, the influx of Chinese restaurants “dilutes the organic culinary fabric of Singapore,” said food critic KF Seetoh.
Still, such factors are unlikely to stop Chinese companies’ flight from the price wars back home.
“The competition here will only intensify,” said Nong Geng Ji’s Zhou.
REUTERS
See article @
https://www.businesstimes.com.sg/in...ms-flock-singapore-first-step-expansion-drive
