SINGAPORE: Although the bubble tea chain Gong Cha closed all its outlets in Singapore last year, it appears that Singapore itself played an important role in the Gong Cha brand’s success.
Martin Berry, the founder and chairman of Gong Cha Global, said in a recent interview with CNBC that what got him started in the bubble tea business was seeing the long queues at the Gong Cha outlet at ViVoCity.
At the time, Mr Berry had a successful and lucrative career in banking, but was looking to leave the industry due to an “entrepreneurial itch” and was wondering what his next steps should be.
“I started to look around for opportunities to build a business,” he told CNBC.
One day in January 2011, at a time when he and his family were living in Singapore, he went out for a haircut at VivoCity.
Seeing the number of people in line at Gong Cha piqued his interest. The quickness with which customers were served, the low overhead due to the smallness of the store, its profitability due to the simplicity of ingredients, and the overall efficiency of the business model “blew him away.”
That sameyear, Mr Berry went to Taiwan to meet with Wu Zhenhua, who founded Gong Cha in 1996. That encounter ended with Mr Berry acquiring master franchise rights.
Using US$2.5 million from their savings, he and his wife, who had also been in banking opened five Gong Cha outlets across Korea in 2012.
As Gong Cha was an unknown brand in the country, Mr Berry employed a clever tactic to ensure foot traffic into the stores.
“It was quite terrifying, to be honest. We opened the first store, and ’if you build it, they will come,’ does not apply. So my strategy was, I’m going to put a Gong Cha— the first five stores— next to Starbucks. And if I can get one in a hundred people who are going into Starbucks to come and try a Gong Cha, then I’ve got a business,” he said in the interview.
Social media, which was just starting at the time, helped greatly in getting the word out, but what really launched the brand was what came next. Just a few months after opening the first store, Mr Berry was offered the chance to open Gong Cha outlets in all the Hyundai-owned department stores throughout Korea.
Three years later, there were 300 Gong Cha stores all over the country.
By 2017, Mr Berry, together with the private equity firm UCK Partners, acquired Royal Tea Taiwan, which owns Gong Cha.
In Singapore, after having closed its outlets last October, Gong Cha is set to re-launch this year as part of the company’s “Gong Cha 2.0” strategy. This will happen under a new franchisee, after the company chose not to renew its agreement with the previous one.
Kang Puay Seng, the former CEO of Gong Cha Singapore, opened a new bubble tea brand in November, with six outlets manned by former Gong Cha Singapore staff.
Gong Cha global CEO Paul Reynish was quoted in CNA last October as saying, “Singapore is a really important market for us, and we’re really excited about relaunching in 2026.
We have seen fantastic results in Japan and South Korea, with customer wait times significantly reduced, higher repeat visits, and overall customer satisfaction levels up. Next year, we’ll bring this concept to Singapore and relaunch our ambitious plans to scale in the market alongside new franchisees.” /TISG
Read also: More than 20 former Gong Cha Singapore staff now working at new bubble tea brand Cai Ca
