SINGAPORE: As Texas Chicken aims to spread its wings further beyond the United States, Asia will be a key market that it will be looking to win over, Global President and CEO Jim Hyatt told Channel NewsAsia on Tuesday (Sep 20).
Speaking at the opening of the fast food chain’s 500th international restaurant in Singapore, Mr Hyatt described Asia – its second-biggest business unit after the US – as the “real shining star” among its operations, which also include the Middle East and Latin America.
And the region, with its booming middle class and preference for chicken as a staple part of people’s diets, will play a pivotal role as the company looks to double the number of international restaurants over the next five years.
“Even though we just opened our 500th restaurant, we actually have another 500 commitments from franchisees in our international system so we are going to double from where we are over the next five years,” said Mr Hyatt. “And Asia, where we are so passionate about, will play a lead role.”
Texas Chicken, also known as Church’s Chicken back home, made its foray into Asia in the 1980s, with its first restaurant in Indonesia. However, it was only in 2010 that it expanded its Asian footprint in earnest, opening an outlet in Singapore, before venturing into Vietnam in 2012 and Malaysia in 2013, followed by New Zealand and Thailand last year.
The new restaurant which opened its doors on Tuesday at Resorts World Sentosa is Texas Chicken’s 12th restaurant in Singapore, where it is partnering Catalist-listed restaurant chain operator Select Group. Its 13th outlet is due to be launched in the newly revamped Centrepoint along Orchard Road in a week’s time.
Texas Chicken is banking on locals and tourists, especially from Malaysia, for sales at its new outlet at Resorts World Sentosa. (Photo: Tang See Kit)
According to the chief executive, Texas Chicken has an ambitious target of unveiling 50 to 70 new restaurants each year in Asia as it plays catch-up to its competitors who have a bigger presence in the region.
One of the emerging Asian markets it is betting on is Laos, where its first restaurant with franchisee RMA Group is scheduled to roll out by the end of the year.
“Laos would be one of the first markets where we would be entering as the first quick-service restaurant,” said Mr Amarpal Sandhu, general manager for the Asia-Pacific region. “None of our competitors that are in every other market is there yet so we will have a first-mover advantage.
“In addition to that, the people of Laos love chicken. That is their preferred protein and that represents an opportunity for us,” Mr Sandhu added. According to a recent press release, at least seven more restaurants are due to be rolled out in Laos over the next few years.
Other markets that are also on the radar include China, which has been a key battleground for many Western fast food chains over the past years. But Texas Chicken will go slow when it comes to taking its first bite into the lucrative market.
“I’d be lying if I said I don’t have China on our cards and I won’t be truthful if I told you we haven’t been to China to check out the environment, but we don’t want to rush,” said Mr Hyatt, who added that the firm is still on the search for the right franchisees on mainland China and does not rule out going into a joint venture model with local operators.
Asked if Texas Chicken is wary of rapidly emerging local competitors as well as a host of food scandals that have smeared the names of other Western fast food chains in China, Mr Hyatt said: “China is an exciting market which will require a big commitment. It will take a lot to get it up and we don’t want to rush. We want to be able to find the right operator and the support needed to get the supply chain running and menus established.”
(Photo: Tang See Kit)
COUNTING ON INNOVATION AMID BREWING COMPETITION
While overseas markets have opened up new doors for the American fast food chain, it is aware of the stiffening competition in most parts of Asia largely due to the segment’s low barrier to entry.
Apart from its longstanding rivals such as KFC and Popeyes, the region has seen the mushrooming of new players specialising in fried chicken including Dallas-based chicken wing restaurant chain Wingstop and the likes of South Korean brands. The latter, in particular, has made waves in the region, thanks to frequent media exposure in popular South Korean dramas such as My Love from the Star that aired in 2014.
According to Euromonitor’s research analyst Lim Yu Xian, South Korean-styled fried chicken brands have garnered immense popularity among Asian consumers, thanks to the “K-wave that is still going strong”.
While chains such as 4 Fingers and Nene Chicken have made their presence felt in Singapore through aggressive store openings, BonChon Chicken has been taking the lead in other markets like Thailand and Indonesia, noted Ms Lim.
In light of the competition, western chains seem to have adopted the strategy of leveraging on “existing trends” to attract customers by introducing Korean-styled fried chicken to their menus, Ms Lim said. For instance, Texas Chicken introduced the spicy seaweed chicken to its menu earlier this year.
“If you cannot win the enemy, join him … Rather than competing head-on, it makes more business sense for these chains to leverage on existing trends that will help pull in the crowd,” the analyst added.
Indeed, when asked how Texas Chicken is planning to fend off competition from these up-and-coming chains, Mr Hyatt and Mr Sandhu named product innovation as a top strategy.
“We were in South Korea recently and noticed the products being served (as well as) how it is sprinkling around to other parts of the world. We are aware of the competition and so we have to make sure that we are competing at their level or doing better,” said Mr Hyatt, adding that around 35 new flavours are introduced every year across Asia.
For Texas Chicken, the key to retaining customers is product innovation. (Photo: Tang See Kit)
In Singapore, for instance, local seasonings such as sambal chilli and laksa have been tapped as new flavours, and received “positive responses” thus far.
However, Texas Chicken draws the line when it comes to experimentation beyond food.
When asked for his thoughts on rival KFC’s move to debut edible nail polish in Hong Kong earlier this year, Mr Hyatt said: “I think they are trying to be too cute. People come to your restaurant for a good meal, good value and a good experience and I’m not sure we will go into that.”
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