Learning from setbacks
Wang, who is also responsible for the group’s international brands, adds, “This is the result of our past failures and the lessons learned.”
As far back as 2000 Wowprime was looking to expand internationally, with Lobo Lee—now general manager of their mainland China operations—at the head of their move into the US market with Porterhouse Bistro in Beverly Hills.
This was the group’s first international operation, and they dispatched a team to run the 100%-owned new restaurant using Wowprime resources exclusively. From menu planning to pricing and market positioning, they handled everything. However, despite the fact that Wowprime’s leading brand is a steak house chain known as Wang Steak, they made a major error with their new steak house. To adapt to local tastes, Porterhouse Bistro changed the focus of their dishes from the specially produced steak fillets of the Taiwan operation to cuts more preferred by American diners. However, the market was already flooded with similar restaurants, and combined with the pressure of wages and operating costs, expenses went up. After seven years, Porterhouse had racked up over NT$100 million in losses, finally prompting Wowprime to admit defeat.
In 2011, Wowprime decided to try again, launching the Tokiya brand in Thailand. This time they sought a local franchiser, leaving operation of the Thai restaurant in the hands of local management, with Wowprime just offering support in the form of advice and staff training.
This time, Wowprime thought, would be different, for they had learned from their past mistake. However, when the local partner decided to reorient from “Japanese restaurant” to “Japanese-style steak house,” the restaurant’s brand positioning was muddied, and by the time Wowprime found out, it was too late. But these two failures taught the group much, and for their next attempt they struck a balance between the two modes of operation, finding a partner in Singapore willing to engage in a joint venture.
Their 2003 move into the mainland Chinese market was also part of their effort to prepare for a wider international expansion.
Group vice chairman Endy Wang explains that other global brands have built from a sizable local foundation—Starbucks, for example, already had 3,000 stores in the US before opening its first overseas location. Issues of scaling and manpower were already well and truly sorted out.
Taiwanese restaurant brands looking to expand abroad, however, don’t have foundations of such scale, and thus lack the necessary experience. When Wowprime moved into mainland China, they initially faced familiar issues around staff training and venue development, but after ten years of persistence, their efforts finally began to bear fruit.
The mainland operation saw a rise in turnover of some 45% last year. In 2014 the company expects to see further growth of 50%, and is seemingly set for more exponential growth. But as Wang notes, success in the mainland hardly makes a Taiwanese company “international.” “Only once you’ve made it in the American market have you really gone international,” he avers.
With their mainland operation on a firm footing, Wowprime decided to set up another group to look into further overseas expansion and to prepare a two-pronged assault on the global market. While the mainland team focused on becoming self-sufficient, the international team began actively seeking out potential partners.
Last year, Wowprime saw turnover of NT$14.89 billion, of which their international operations accounted for 38%. “We’re actually six years ahead of the chairman’s goal, achieving by 2014 what was planned for 2020,” says Wang.
The creative vegetarian dishes on Sufood menus first have to pass through six months of trials before being ready for diners.