PapaRich saw the potential in Australia and has made great impact since its establishment.
Malaysian ‘kopitiam’ (coffeeshop in the Hokkien Chinese dialect) outlet chain PappaRich is a well-known brand, with dozens of outlets throughout Peninsular and East Malaysia. The chain operates via a franchising model, and is one of the few Malaysian F&B pioneers taking their brands – and their franchising models – internationally. With outlets in the USA, Australia, Singapore, China, Brunei, South Korea, Taiwan, and New Zealand, PappaRich has made some notable achievements since it first opened in 2006.
Outside of Malaysia, PappaRich mostly goes into joint ventures or sets up franchising operations. In Australia, for instance, PappaRich operates via a joint-venture partnership with local franchisor STG Food Industries Pty. Ltd. (STG), as a result of talks between the two parties in 2011 to bring the PappaRich concept into the country.
Aside from managing PappaRich in the Oceania region, Cheras-born Saw Tatt Ghee, Managing Director of PappaRich Australia and Group CEO of STG, is also involved in PappaRich Singapore.
Tatt Ghee (pic) outlines the timeline of PappaRich’s expansion in Australia: “We were running two Malaysian restaurants prior to this joint venture. We started out in 2012, and within the first year, we had opened 5 outlets. In 2013, another 3 outlets were opened, and in 2014, yet another 5-6 outlets were opened. By the end of 2015, we hope to have 21 outlets in Australia, and we plan to have 1-2 open in New Zealand. Eventually, we hope to have 3 outlets in Auckland, and another one in Wellington.”
Both Tatt Ghee and PappaRich Malaysia could see that there was a lot of potential in the Aussie market. “There are a lot of overseas (Malaysian and Singaporean) students here, and outside of Malaysia proper, Australia probably has the most number of Malaysians resident, all of whom were looking for a taste of home.”
Tatt Ghee notes that PappaRich has been a very strong brand. “Everybody knows them back in Malaysia,” he said, adding, “The only challenge was to tweak PappaRich’s food and SOPs to the local tastebuds and expectations. This included serving sizes (larger for the Australian market), the sweetness/saltiness of the food, and menu items that should or should not be included, or items exclusive to the Australian market.”
The same is true of New Zealand; serving sizes have to be even bigger than the Australian ones, according to Tatt Ghee.
The primary challenge in such a rapid expansion was to create a support system good enough to handle the number of new stores. PappaRich Australia relies heavily on a central kitchen (pic) or production facility that supplies all the stores, maintaining the consistency of the food’s taste in all the locations.
Additionally, there was a need to secure good locations in prime areas and hiring the appropriate workforce. Unlike in the Asian region, cheap and plentiful foreign labour is not always available, which leaves the use of locals and students.
PappaRich has been a big hit with Malaysians from the beginning, as both the ambience and the decently-priced ‘local’ delicacies made them feel more at home.
“While our customers do compare between PappaRich here and back home (in Malaysia), we tweak the tastes so that the comparisons are mostly good ones – for instance, we make our food less spicy by default, but provide the chilli sauces and so on for customers who want it hotter,” Tatt Ghee elaborated.
PappaRich Australia is also focusing on its Express model, which essentially brings them into shopping centre food courts. The first such Express outlet was opened in 2014 at the Westfield Shoppingtown in Doncaster.
As the master franchisor, Tatt Ghee maintains a very good working relationship with PappaRich Malaysia. “They’re very happy with the way things are progressing, and with the expansion plans so far,” he points out.
Tatt Ghee believes that it is critical for Malaysian businesses looking to franchise their brands overseas to find the right local partners and talents, as they are the ones with the necessary market expertise. “Otherwise, it is very difficult to bring local Malaysians to come and manage the business overseas, and you spend more time discovering what a local partner would already know,” he adds.