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047SMU
GONG CHA’S RETURN TO SINGAPORE: REBUILDING A
POPULAR BUBBLE TEA FRANCHISE
We spelt out our vision – ‘GC plus one’ – to the team very clearly. GC stands for Gong Cha. We
must always have a “plus one”. It means always adding something – a new outlet, a new brand, a
new market.
– Kang Puay Seng, CEO, Gong Cha (Singapore)
It was April 2023. Bubble tea chain Gong Cha (Singapore) had opened a new outlet in Millenia Walk
shopping mall in the downtown area not long ago. This was its fifth year in the city-state after it had
exited the market for six months from June to December 2017. Prior to June 2017, the chain’s
Singapore operations had been managed by a different franchisee, and at that time, it had operated a
total of 80 outlets.
Kang Puay Seng, CEO of Gong Cha (Singapore), the current master franchisee, was in a
contemplative mood. In the course of those five years, much had happened. More and more bubble
tea businesses had begun to spring up, all competing for a share of the limited pie as the Singapore
bubble tea market became more crowded than ever. Then there was the COVID-19 pandemic. During
the two-month state-imposed circuit breaker from April to June 2020, which was intended to
minimise and prevent transmission of the coronavirus across the island, bubble tea outlets were
deemed “non-essential” businesses, so they had to be shut.
Still, it was not all gloom and doom. Gong Cha was an established global bubble tea brand with a
presence across much of Asia Pacific, and even the West. In Singapore, it had won the Reader’s
Digest Trusted Brand Gold Award (Pearl Milk) for four consecutive years from 2020 till 2023. Also,
for someone who had not even tried bubble tea before becoming a Gong Cha master franchisee, Kang
believed that he had acquitted himself reasonably well. Nevertheless, there were a few things that
disturbed him. How could Gong Cha (Singapore) continue to remain relevant in the face of
intensifying competition? While he had introduced a sit-down concept and self-ordering kiosks
among other things, what else could he do to innovate and differentiate the brand from his rivals?
And in the wake of the pandemic, would health concerns begin to take precedence? Was it important
to add more healthier options to the menu?
This case was written by Associate Professor Seshan Ramaswami, Dr Josephine Tan, and Thomas Lim at the Singapore
Management University. The case was prepared solely to provide material for class discussion. The authors do not intend to
illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and
other identifying information to protect confidentiality. They are also grateful to Cindy Heng Hai Yong for her research assistance
for this case.
Copyright © 2023, Singapore Management University
Version: 2023-06-28
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SMU-23-0007
Gong Cha’s Return to Singapore
Bubble Tea
For the uninitiated, bubble tea (also known as “boba tea” in some markets) was originally a tea
beverage that was mixed with milk or fruit syrup, after which tapioca balls (otherwise called “pearls”)
were added.
First created in Taiwan in 1983,1 the general form of bubble tea had evolved to one in which tea,
fruit juice, coffee or milk was added to a base of chewy tapioca pearls (or a variant) at the bottom of
the cup (refer to Exhibit 1 for ingredients and preparation of bubble tea).2 The term “bubble tea”
was not an allusion to the tapioca balls found in it, but a reference to the bubbles that were formed
by the milk froth that appeared when the drink was prepared.3 The combination of a tremendous
variety of options, the filling nature of the drink, the contrast of the liquid milk tea and the chewy
pearls, and very quick service, made for a lasting beverage trend. Once thought to be a passing fad,
the bubble tea phenomenon appeared to have staying power in many Asian cities.4
The beverage was often perceived as a popular option with younger consumers, whose constant
desire for variety and innovation meant that the demand for new flavours was unceasing. In addition,
given how new food and beverage (F&B) trends constantly emerged in various markets, bubble tea
chains were compelled to either follow those trends or set their own. Some of the more recent trends
had centred around the addition of brown sugar and milk foam, cheese tea, and even new preparation
methods like cold brewing tea leaves by steeping them in cold water for several hours.
The global bubble tea industry was estimated to be valued at US$2.2 billion in 2021. It was forecast
to chalk up a compound annual growth rate of 7.4 percent between 2022 and 2027 to reach US$3.4
billion by 2027.5
Bubble Tea Market in Singapore6
The first bubble tea shop, Bubble Tea Garden, was opened in Singapore in 1992.7 Compared to the
store format that subsequently evolved to buying the tea over the counter in a sealed, plastic cup for
takeaway, bubble tea at Bubble Tea Garden was served in cocktail glasses in a sit-down café format.
The demand for bubble tea gradually died down by the early 2000s, but a resurgence took place in
the following decade. As at 2023, it was estimated that over 60 bubble tea brands were doing business
in Singapore. The country’s annual turnover for the bubble tea sector was believed to be around
US$342 million.8 In April 2023, the three largest Singapore bubble tea chains, based on the number
of outlets, were LiHO, KOI Thé, and Each-A-Cup (refer to Exhibit 2 for information on major
players in Singapore’s bubble tea market).
Jan Yap, “Bubble Tea”, National Library Board, Singapore, http://eresources.nlb.gov.sg/infopedia/articles/SIP_2014-0129_182158.html, accessed October 2017.
2
Khushbu Shah, “So What Is Bubble Tea, Exactly? Everything You Need to Know about the Drink and Boba Balls”, Mic.com,
September 2, 2016, https://mic.com/articles/152810/so-what-is-bubble-tea-exactly-everything-you-need-to-know-about-the-drink-andboba-balls#.C9yzTZs3I, accessed October 2017.
3
Ibid.
4
Seshan Ramaswami and Adina Wong, “From Franchisee to Startup: The Birth of LiHO Bubble Tea”, SMU-20-0003, accessed
November 2022.
5
IMARC Group, “Bubble Tea Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2022-2027”,
https://www.imarcgroup.com/bubble-tea-market, accessed November 2022.
6
Seshan Ramaswami and Adina Wong, “From Franchisee to Startup: The Birth of LiHO Bubble Tea”, SMU-20-0003, accessed
November 2022.
7
Jan Yap, “Bubble Tea”, National Library Board, http://eresources.nlb.gov.sg/infopedia/articles/SIP_2014-01-29_182158.html,
accessed October 2017.
8
Quang Tue, “Vietnam Third Largest Market for Bubble Tea in Southeast Asia: Study”, VnExpress, August 17, 2022,
https://e.vnexpress.net/news/industries/vietnam-third-largest-market-for-bubble-tea-in-southeast-asia-study-4500798.html, accessed
November 2022.
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Gong Cha’s Return to Singapore
Gong Cha
Gong Cha (贡茶) in Mandarin meant “tribute tea”. It was a reference to the practice of how subjects
of Chinese emperors of the past would present the finest quality tea leaves they produced to the
emperors as a tribute.
Originally founded in the southern Taiwanese city of Kaoshiung in 2006, Gong Cha had gone through
a number of ownership changes over the years. In 2016, Japanese equity firm Unison Capital bought
over Gong Cha master franchise owner Royal Tea Taiwan (RTT). In August 2019, TA Associates,
an American private equity firm, took a stake in Gong Cha Group, which was eventually sold to
London-based GC Group Bidco Ltd three months later. GC Group Bidco was renamed Gong Cha
Global Ltd in 2020.
As at November 2022, Gong Cha had close to 1,500 outlets worldwide across 19 markets. Its
presence was mainly concentrated in Asia Pacific, with outlets in the US, the UK, Canada, Australia,
New Zealand, and Mexico as well. Based on the number of outlets, its largest markets were in Korea
(over 700 outlets), the Philippines (close to 150 outlets), and the US (about 120 outlets). Its overall
revenue was estimated to be US$380.4 million.9 In Singapore, half of Gong Cha’s 30 outlets were
in shopping malls, with another eight in the residential heartlands, including subway stations (known
in Singapore as “MRT stations”). The rest were spread across other locations with high footfall, such
as public hospitals and tertiary educational institutions.
From 2009 when Gong Cha first entered Singapore until June 2017, Gong Cha’s operations in
Singapore were run by RTG Holdings, which was headed by managing director Rodney Tang. Tang
however decided not to renew his franchisee agreement with RTT, which had been sold to Unison
Capital by then, as the new agreement included clauses that would have prevented him from
effectively managing RTG’s three other F&B brands – Nene Chicken, Paik’s Bibim, and Korean
barbeque chain Bornga. Tang then went on to set up a new bubble tea chain called “LiHO”, which
in Hokkien, a commonly spoken Chinese dialect in Singapore, meant “how are you?”. All the Gong
Cha outlets he was previously running subsequently came under the LiHO umbrella.
Unison Capital subsequently sought applications for a new Singapore master franchisee for Gong
Cha, and Kang was eventually selected. Reportedly over 100 applications were submitted, but Kang
stood out from the other applicants, given his background as co-founder and former managing
director of another Singapore F&B chain, Mr Bean, which sold soya bean-based F&B products.
As Gong Cha was re-entering the Singapore market just a few months after its exit, it had an
interesting challenge ahead. It had to cater to its existing, but latent, loyal customer base, which the
brand had built up under the previous franchisee. Simultaneously, it had to now confront a very
different set of competitors, including LiHO, which still held many of the earlier retail locations in
which Gong Cha had been operating at. In a continuously innovating “fast beverage” industry, it also
had to offer something new.
Franchise Times, “Gong Cha”, https://www.franchisetimes.com/top-500-2022/193-gong-cha/article_f62226e4-23dd-11ed-8352477d02c69781.html, accessed November 2022.
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Gong Cha’s Return to Singapore
Rebuilding Gong Cha’s Singapore Presence
Kang’s Eureka Moment
Early on in his career, Kang had been a software engineer at HP (Hewlett Packard) Singapore for
slightly over three years. But as he had little interest in deskbound jobs, he moved on to another
manufacturing company, again for a few years. He eventually found his calling in 1995, when he
partnered former classmate Loh Jwee Poh to set up a stall in People’s Park Hawker Centre10 in
Chinatown that sold soya milk and bean curd. At that time, the common practice for such hawker
stalls selling soya milk and bean curd was to get their supply of both products from factories that
manufactured them, and they would only sell the products in the morning.11 However, Kang and
Loh saw the potential in producing their own fresh supply of both products, which would enable
them to sell the two products throughout the day. They developed a machine for doing so, thereby
raising the stall’s efficiency and sales.12 The menu expanded from just two items to more than 40,
and included pancakes, rice bowls and ice cream.13 As for the brand, Kang explained that since both
founders were men, they reasoned it was quite logical to name it as “Mr Bean”14.
Mr Bean’s expansion to more upmarket locations like shopping malls was a fortuitous one. During
the 1997 Asian Financial Crisis, many retail businesses failed, which led to a glut of retail space in
Singapore’s shopping malls. As a result, many shop spaces were split into two to make them more
affordable for small businesses. Mr Bean managed to rent a small 200-square-feet shop space in
Hougang Mall, and proved to mall landlords it was able to succeed and afford shopping mall rentals.
In 2010, Singapore’s trade promotion agency International Enterprise Singapore (subsequently
known as Enterprise Singapore) connected Mr Bean with a Japanese partner, and it set up its first
overseas outlet at Shibuya Station, one of Japan’s busiest subway stations, in Tokyo. According to
Kang, this caught the attention of Singapore Prime Minister Lee Hsien Loong, who mentioned Mr
Bean’s accomplishment during his 2010 National Day Rally speech15. This heightened the profile of
Mr Bean, which eventually expanded to four other Asian markets – Malaysia, Korea, China, and the
Philippines. In 2015, when Mr Bean had 72 outlets in Singapore, Kang sold his shares to Loh and
exited the business, because they had differing ideas on how to expand it.
Fast forward to 2017; Tang’s announcement that he would exit the Gong Cha franchise and set up
his own LiHO brand caught Kang’s eye. To be precise, it was Tang’s assertion that he would spend
S$1 million (US$730,000 16 ) to rebrand the business from Gong Cha to LiHO that got Kang’s
attention. He felt that the amount was insufficient, because when the Mr Bean chain had comprised
about 20 outlets, Kang and Loh had already spent more than S$1 million to rebrand it with a new and
Hawker centres in the Singapore context were open-air eating places which brought together several stalls that offered reasonablypriced F&B options under one roof. As rentals were lower, the stalls in such centres were targeted at the mass market.
11
Tay Peck Gek, “Mr Bean’s Co-Founder Spills the Beans on Its Recipe for Success”, The Business Times, November 2, 2021,
https://www.businesstimes.com.sg/hub-projects/keep-growing/mr-beans-co-founder-spills-the-beans-on-its-recipe-for-success, accessed
November 2022.
12
Zafirah Salim, “Soya, Mr Bean Went from Hawker Stall to International Chain with 62 Outlets in S’pore”, Vulcan Post, May 31,
2018, https://vulcanpost.com/640501/mr-bean-founder-loh-jwee-poh/, accessed November 2022.
13
Tay Peck Gek, “Mr Bean’s Co-Founder Spills the Beans on Its Recipe for Success”, The Business Times, November 2, 2021,
https://www.businesstimes.com.sg/hub-projects/keep-growing/mr-beans-co-founder-spills-the-beans-on-its-recipe-for-success, accessed
November 2022.
14
This iteration of Mr Bean was not to be confused with the iconic comedic character popularised by British comedian Rowan
Atkinson.
15
In Singapore, the National Day Rally was considered the most important political event of the year in which the nation’s prime
minister would speak about its important challenges and announce key policy changes. Typically held on the first or second Sunday after
Singapore’s National Day in August, it was akin to the US State of the Union address by the American president.
16
US$1 = S$1.37 as at November 2022.
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Gong Cha’s Return to Singapore
more sophisticated logo design. Piqued by this, Kang, previously a non-bubble tea drinker, finally
began to pay attention to the bubble tea business.
As luck would have it, shortly after that, Unison Capital began calling for applications for the
Singapore master franchisee rights, and a friend of Kang’s urged him to give it a try. Kang duly
submitted his application but received no reply. When he enquired, he was told that there were over
100 applicants, so it would take some time to arrive at a decision. Kang then decided that he should
do some market research in the meantime, so as to better prepare himself should he be shortlisted.
He thus travelled around the region, including Australia, and discovered to his surprise that despite
being seen as an Asian drink, bubble tea was well-received by Caucasian consumers like his
Australian friend living in Melbourne, once they were introduced to it. This led Kang to believe there
was considerable market potential for the drink, and that he could be on the right track.
Making “Bigger and Better” a Reality
Before RTG had exited the Gong Cha franchise, it was reported that Gong Cha Singapore had chalked
up S$30 million (US$21.9 million) in annual revenue. As a result, the Singapore market was ranked
among Gong Cha’s top three contributors to its overall revenue, which amounted to US$70 million
in 2016.17 Given this stellar track record of RTG, Kang was well aware that he would have big shoes
to fill (refer to Exhibit 3 for a photo on the size of the crowd waiting for Gong Cha’s first outlet to
open after Kang took over the franchise, as well as Exhibits 4 and 5 on social media comments on
its departure and return to the Singapore market).
Increasing Menu Options
When making his pitch to Unison Capital, Kang thus said that he would aim to make the Gong Cha
franchise “bigger and better” when it returned to the Singapore market. To fulfil the “bigger” part of
his promise, Kang made sure that when the brand made its comeback, the menu would retain the
really popular drinks that had defined it, such as its Earl Grey Milk Tea (refer to Exhibit 6 for Gong
Cha’s menu when it was still run by RTG). Thereafter, in response to new trends emerging, he
expanded the menu accordingly (refer to Exhibit 7 for Gong Cha’s menu after it re-entered the
Singapore market). For instance, given how rival Tiger Sugar had popularised the brown sugar trend
in Taiwan and Hong Kong, it was inevitable that a new Brown Sugar range – Brown Sugar Fresh
Milk Tea with Pearl, Brown Sugar Fresh Milk with Pearl, and Brown Sugar Ginger Milk Tea – was
introduced. For this range, dark brown sugar syrup was added to juxtapose it against the milk or tea
to give a striking contrast in terms of visual appeal. Another new trend that Singaporean consumers
had embraced was coconut-based beverages, hence the addition of the Coconut Slush range, which
included Original Coconut Slush and Earl Grey Coconut Slush (refer to Exhibit 8 for Gong Cha’s
current menu as at April 2023). In comparison, rivals such as LiHO had come up with a new range
of Cheese Teas in line with Singaporeans’ love for cheese (refer to Exhibit 9 for LiHO’s menu when
it was first launched in 2017).
Expanding Customer Range
Kang was also of the opinion that to enlarge his customer base, one key way to do so was to reach
out to the older demographic, given how many in this group thought that bubble tea was only for the
young. He explained,
Yasmine Yahya, “Bubble Tea Firm Gong Cha Promises Bigger, Better Comeback in Singapore”, The Straits Times, June 10, 2017,
https://www.straitstimes.com/business/bubble-tea-firm-gong-cha-promises-bigger-better-comeback-in-singapore, accessed November
2022.
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Older consumers tend to think that bubble tea is very sweet and therefore a turn-off, but that’s not
true. People in China and Japan have been drinking tea for thousands of years, and it’s a traditional
drink. So I told my staff to develop healthier drinks that can meet the Health Promotion Board’s
(HPB’s) criteria for the Healthier Choice Symbol. With these drinks, we can attract older customers,
who typically want their drinks to be less sweet.
So far, 10 drinks, including Oolong Tea and Black Tea, have been awarded HPB’s Healthier Choice
Symbol. In order to be awarded the symbol, Gong Cha had to submit the ingredients for these drinks
and send the beverages to an independent laboratory for testing. According to Kang, HPB would
only award the symbol for drinks that met its requirements for ideal sugar and fat levels, among other
requirements. To further cater to this demographic, who may not necessarily want to drink cold
beverages, a Hot Drink range has been introduced, of which two – Pearl Milk Tea and Taro Drink –
were bestsellers.
Additionally, Kang chose locations with high footfall such as shopping malls, MRT stations, public
hospitals, and tertiary educational institutions, for his outlets. With the target younger clientele
frequenting many of these locations, it would be easier for the brand to reach out again to bubble tea
lovers.
Furthermore, retail trends had changed over the years. Explained Kang,
In the past when I was still running Mr Bean, the mall landlords had enforced a rule: one brand,
one trade, one player, which meant that generally, for a particular type of business, there would
only be one player allowed in the mall. So, for instance, if Mr Bean is renting a unit in the mall, no
other soya milk shop would be allowed to rent another unit in the same mall. But now, times have
changed. There can be up to four or even five bubble tea brands in one mall. So while it’s not so
restrictive anymore, it has also become much more competitive.
Moreover, to expand the customer range, a number of Gong Cha outlets were set up around the
business areas to cater to the office worker demographic. Similarly, outlets were established at public
hospitals to capture the sizeable captive crowd of patients, staff and visitors.
Introducing Sit-Down Format
As for making the franchise “better” than it had been previously, whereas most bubble tea chain
outlets did not offer any seating, Kang decided that one way to differentiate Gong Cha from its peers
was to provide seating in eight outlets, which were dubbed “café outlets”. Located in a range of
places like malls and educational institutions, these café outlets enabled customers to enjoy their
bubble tea in greater comfort, and also facilitated socialising and project discussions.
Launching Innovative Drinks
And in view of how young consumers were always on the lookout for something new, Gong Cha
made sure that new flavours were being constantly developed and sold. Kang said that he gave his
staff, most of whom were young and familiar with what younger consumers liked, the freedom to
devise new flavours, so long as he believed that these were likely to be commercially successful.
Some of the more innovative creations included the Tomato Bubble Tea (BBT) range in collaboration
with iconic tomato sauce manufacturer Heinz – Berry Mary (Tomato, Raspberry, and Strawberry)
and Pomato Bomb (Tomato, Pear, and Pomegranate), as well as the Ikura Matcha Latte, a creamy
rich matcha latte topped with flavourful bursts of ikura (red caviar), and the Milk Foam BBT Floats
in which a scoop of Häagen-Dazs Bourbon Vanilla Bean Truffle ice cream would be drizzled with
rich melted chocolate and then floated on milk foam over a milk tea with pearls.
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Gong Cha’s Return to Singapore
Kang’s marketing team also shrewdly tapped into Singaporeans’ wanderlust, which had been
severely tested by the pandemic-related travel restrictions before they were relaxed in March 2022.
As part of the Gong Cha Terminal campaign in May 2021, selected outlets like those in major malls
like 313@Somerset and Causeway Point were temporarily converted into “airport concept stores”.
Eight destination-inspired drinks such as US-inspired Cranberry Tea Ade and Korea-inspired Daebak
Banana were offered at these outlets (refer to Exhibit 10 for the special menu for this campaign).
Not only that, the drinks menu screens at these stores displayed these destination-inspired drinks
under the “Arrivals”, “Transfer Information” and “Check-In” categories, and signs that read “Self
Check-In” were displayed above the self-order kiosks. Images of aeroplanes and luggage also
dominated the store displays, allowing customers to better imagine that they were at an airport and
about to embark on a flight overseas.
Pioneering Self-Order Kiosks
Moreover, as part of a move that not only helped Kang achieve manpower cost savings but also
offered customers a bigger role in the purchasing process, self-order kiosks were introduced in a first
among Singapore bubble tea chains. Through the kiosks, customers could select the options they
preferred, including choice of drink and toppings as well as ice and sugar levels, and also make
cashless payments. Kang said this enabled him to save at least 20 percent on manpower costs.
Furthermore, customers could pay for their drinks using cashless alternatives like credit cards and
NETS18. And patrons could opt to use apps such as FavePay, GrabPay, and PayLah to pay for their
drinks if they wished to, making it even more convenient for them. Nevertheless, customers who
preferred to pay using cash were allowed to do so. Kang elaborated,
The supervisor of each outlet has a cashcard, which in Singapore is essentially a stored value card.
Whenever the customer says they want to pay cash, the supervisor will use the cashcard to pay for
the purchase at the self-order kiosk. The cash paid by the customer will be kept in the outlet. To
avoid the hassle of depositing the cash collected daily, the supervisor will wait until the outlet has
accumulated about S$100 to S$200 in cash before depositing it and then top up the cashcard after
that.
The Need to Constantly Innovate
While Gong Cha had introduced new products and ways of ordering, among other things, it realised
that it could not be complacent. Hence it strove to cater to the likes and fancies of young consumers,
but found that there were limits to what it could do. For instance, while many businesses were keen
to highlight their sustainability credentials, something the youths were becoming more passionate
about, the bubble tea chain found it challenging to do it. This was because the presence of the pearls
necessitated the use of straws and plastic straws were by default the cost-effective option. Kang found
that only a handful of consumers were willing to use metal straws for their drinks. He added,
I can switch to using paper cups, but the packaging cost would double or even triple. Then I would
have to absorb the additional cost or split it with my customers.
In Singapore, NETS was a form of electronic payment in which a particular sum was deducted from a customer’s bank account for
purchases.
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Tapping Staff’s Creativity in Publicity Push
In his push to reach a wider demographic, Kang began to realise the potential of social media. Again,
in another first for the social media convert who did not touch these platforms before taking over the
Gong Cha franchise, Kang began exploring Facebook as part of his market research. But in a sign of
changing times, Kang’s teenage son had advised him, “Facebook is for old uncles like you, not for
us, okay?” The social media novice then moved on to Instagram before finally settling on the new
social media darling, TikTok.
Kang found out that it was very expensive to engage influencers through their agents as he could
only get a few videos after paying sums of between S$3,000 (US$2,186) and S$4,000 (US$2,915).
He decided to explore the possibility of getting his staff to help out instead, since his earlier
experience of tapping his staff at Mr Bean for ideas on developing new products had turned out well.
So far, the experiment has been quite successful, with about 30 to 40 submissions from his team
every month.
Explained Kang,
When our young staff who are in the same age group as our target customers feel good about the
videos they produce, then there is a higher chance that we would be able to better communicate our
message to our customers. Of course, to sweeten the deal for our staff, we incentivise them to help
out with the TikTok video production.
Moreover, customers would view Gong Cha as a young and trendy brand after viewing these videos.
This could in turn help to attract new customers and staff too, making it a win-win proposition for
both management and staff.
Working around Circuit Breaker Measures
Knowing that he had to match Tang’s high standards after the latter had set up a wide network of
Gong Cha-turned-LiHO outlets, Kang decided that he would have to work smart, in addition to
working hard, to match what Tang had achieved. He therefore opted to work with the major F&B
delivery platforms like GrabFood, Deliveroo and Foodpanda from very early on to reach the whole
of Singapore, whereas the more established bubble tea chains did not need to do so, since they already
had a strong presence across the island. Thus, even though the commission these platforms charged,
which ranged from 25 to 30 percent of sales revenue, was prohibitive, Kang was determined to bite
the bullet since he needed to build up his customer base. This turned out to be a blessing in disguise,
because by the time the Singapore government shut all non-essential businesses during the circuit
breaker, Kang had already established a good working relationship with these delivery platforms,
and Gong Cha customers could immediately place orders for their drinks even as other chains
scrambled to cope with the restrictions.
Kang also found that in addition to tapping on the delivery platforms, he could leverage the strength
of other F&B brands that were chalking up healthy volumes of delivery orders during that period. As
a result, Gong Cha collaborated with Michelin-starred Chen’s Mapo Tofu and Crystal Jade, as well
as renowned chicken rice restaurant Chatterbox by stationing its equipment and staff at the kitchens
of these restaurants. Customers ordering food from these establishments could thus add on an order
of Gong Cha bubble tea, and the restaurant and Gong Cha would split their earnings accordingly. He
elaborated,
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Gong Cha’s Return to Singapore
It was important to partner the restaurants during this period, because if not, I would have had to
retrench many of my staff, some of whom are very experienced ones who have been with me since
day 1. Without them, I wouldn’t have been able to build the business up to its present scale today.
However, the Singapore Ministry of Manpower caught on to the practice and put a stop to it after the
circuit breaker period by imposing a new regulation: if the practice were to continue, Gong Cha’s
staff would have to be placed under the restaurant’s payroll, so Kang had to cease doing so after that.
Making “Gong Cha Plus One” a Reality
From the very beginning when Kang applied to become Gong Cha’s Singapore master franchisee,
he had planned to acquire the franchisee rights of a few more markets in the Southeast Asian region.
He had in fact envisioned manufacturing key ingredients in these neighbouring markets, where costs
were lower, and then transporting them to Singapore, making the city state the hub of his operations.
Gong Cha headquarters was however not been keen on the idea, as they felt that Kang’s plan was a
little too ambitious.
While he had presented the proposal before the pandemic struck, Kang knew that it was a close shave,
because had it been approved, he might have run into serious supply chain issues as the coronavirus
spread around the world, causing lockdowns and messing up supply chains in the process.
Nevertheless, he needed to grow the business eventually at some point, so what should he do next?
Since sourcing supplies from the ASEAN region would enable Gong Cha to enjoy the benefits of the
ASEAN Free Trade Area, Kang decided that he would
