From 0 to 100: the secret behind Chatime’s growth in a tough franchise climate
It’s no secret that the franchise industry has struggled in recent years, with many well-loved brands coming under pressure with store closures and financial downturn.
However, amidst these tales of uncertainty is an inspiring success story of challenges overcome and opportunities realised – that of the Taiwanese global franchise bubble tea chain, Chatime.
On 17 April, Chatime’s Group General Manager, Carlos Antonius, shared the bubble tea chain’s unique story of growth and evolution in the Australian market to a group of Australia’s top retail leaders at an exclusive ‘CEO Event’ hosted by Retail Doctor Group.
“The franchise sector is in a world of pain because franchisees and franchisors aren’t working together”, Mr Antonius told the group, “which is why at Chatime, we don’t like to use the term ‘franchisee’ – we prefer to think of them as business partners, and we make sure they have everything they need and ongoing support in real time.
“Providing critical insights to franchisees, benchmarks against the industry and against other stores, creating the right channels for peer to peer conversation between franchisees – all these things add up to creating the right culture for growth and franchisee satisfaction”, said Mr Antonius.
Mr Antonius also notes that a critical element to their success is the use of cutting edge consumer personality profiling methodology.
“I’d like to debunk any myths out there about where you think you can or can’t open stores based on classic demographic analysis”, Mr Antonius told the group, “your target customer exists in almost any geographic area, regardless of the demographics of the region – you just need to know who they are, in other words, which personalities are receptive to your product.”
“Personality profiling is really at the forefront of modern consumer behaviour analysis and prediction,” explains Anastasia Lloyd-Wallis, research analyst and Head of Consumer Insights at Retail Doctor Group. “You can have two people with identical demographic profiles of socioeconomic background, gender, age and ethnicity, but how they interact with information and hence the products and brands they are attracted to would be completely different.”
Armed with this information, Chatime has been able to adapt their offer and strategy to appeal to their ‘true’ customers. As a result, the brand has evolved from having 30 stores with an almost exclusively Asian clientele, to now being recognised and enjoyed widely across demographic sectors.
As of now, Chatime has 113 stores, they will open another 38 before the end of the year, and expect to have at least 200 stores by 2021, making it Australia’s fastest growing franchise business.
“Building a distribution channel of this nature would not have been possible without a heavy customer insights focus coupled with great expertise in deployment, as well as a willingness to change and evolve with the market”, said Ms Lloyd-Wallis.
Despite its success, Mr Antonius recognises that innovation is critical for future growth and states that the brand is looking to expand its offer and “find categories to disrupt without detracting from the core franchisee base of the brand.” Amongst these explorations are ‘dark kitchens’ to meet the growing demand of online orders, and kiosk ordering with facial recognition apps.
For more information on Retail Doctor Group CEO Events and to register for future events, click here.