Asia Today editor recently interviewed Mr. Andrew Tjioe, Vice-Chairman, FLA Singapore, discussing about franchising, branding, and the current and future trends faced by F&B industry as a whole. Below are the questions and answers:
1. What are some of the current trends in the F&B industry and where it is headed?
Singapore has always had a very vibrant F&B scene. While it is known to be a foodie destination for tourists, local consumers are always on the lookout for the latest gastronomic trends. In addition, they are very open to trying new fare and a large majority of them are well travelled – it is this spirit that makes franchising such a popular business model in the industry, as franchisors bring in established international brands to cater to the tastes and preferences of the local market.
Business opportunities in the local F&B industry are vast as eating out is a popular lifestyle choice for most local consumers. In fact, the latest National Nutrition Survey conducted by the Health Promotion Board in 2010 showed that six in 10 Singaporeans eat out at least four times a week. We expect to see the industry grow even further and flourish as retailers reinvent themselves to stay ahead of the curve, and new entrants enter the market with innovative and trendy ideas to try to capture a portion of the pie.
Convenience food is being reinvented with unique concepts such as Singapore’s first vending machine café, which has seen overwhelming support since its launch less than a month ago. Though in its early stages, its popularity may spark more of such similar concepts around the island with various innovative meals being served from these machines. We are also seeing a greater number of F&B retailers placing more emphasis and attention on the photogenic quality of their brick-and-mortar store – in interior design, ambience and food styling – as retailers adapt to the shifting demands and preferences of the local market.
On the flip side, Singapore is also a very tech-savvy nation and we are seeing a disruption in the F&B industry as it heads in the direction of online and mobile-based food delivery services. Convenience is the trend heading the F&B industry and there is a shrinking need for consumers to physically head out to ‘eat out’. The rise in the number of food delivery services being made available across the island has made it easier for consumers to gain access to a wide variety of food options without leaving the office or the comforts of home, and we anticipate more businesses to jump on the delivery bandwagon, by offering such services on their own or leveraging on the strong network of fans and subscribers of third-party vendors like Deliveroo or UberEATS to grow their customer base.
Some businesses may even take it a notch further by allowing patrons to customize their meal boxes and weekly deliveries online and in advance, then delivering each meal to their doorstep on the chosen days of the week. Which such customized services, there is now less of a need for consumers in Singapore to eat out, and this lifestyle trend is certainly expected to continue.
Lastly, besides making reservations through online websites and mobile apps, technology has further enabled the growth of secure and established mobile payment gateways. Businesses are increasingly making use of this secure technology to manage their services efficiently – consumers can order their meals online, then head to the outlet to pick it up and make payment all with the swipe or tap of a card – and it is this convenience and the opportunities created by technology that will continue to shape the future of the F&B industry.
2. How can franchises stay afloat in this competitive market?
The F&B industry is first and foremost a services industry, so franchises need to understand the importance of customer interaction to create loyalty, establish long-term relationships and grow word-of-mouth endorsements amongst customers. In particular, international franchises can make themselves more approachable by taking the time to speak with local customers and engaging with them to hear their thoughts, suggestions and feedback.
Social media is also a significant avenue for sharing and reading reviews online, particularly in this day and age, and local consumers rely on them especially when exploring new dining options. To remain competitive and secure positive reviews, franchises should ensure that they are constantly providing exceptional services and creating memorable experiences for their customers.
Facebook is a useful and lucrative platform for engaging in two-way communications with customers, and presents another outlet to receive feedback and share suggestions. In addition, Instagram is a great avenue for businesses operating in the F&B industry. By its very nature, this platform focuses on imagery, which is the most effective way to entice customers to try out your food and other offerings. WeChat is also another avenue that is growing in popularity – it not only caters to the Chinese market but even to locals in Singapore.
Businesses can only compete effectively when they put in effort to monitor their social media pages and share interesting content and deals to grow their online presence. If done right, franchises can monitor and measure customer complaints and reviews, further translating them into valuable insights to grow and improve the business. For a more effective marketing strategy, brands should further analyze their target audience, pick the most relevant channels and concentrate their efforts on developing these social platforms well.
Finally, it is also imperative to keep abreast of the latest trends in the industry. Businesses that can react and adapt to industry trends while retaining the essence of their brand will definitely benefit from the hype. Additionally, international franchises can also consider localizing their offerings by adapting it to consumer tastes and preferences in the market.
3. What are some tips for businesses looking to enter into the franchising and licensing space within the F&B industry?
• Understand your business – Franchisers need to understand the franchise thoroughly in order to be able to make the best business decisions for the brand. Always remember that the decisions you make at the beginning of your franchise journey will impact the business in the long term, so take the time to understand the brand and the people that drive it, such as your employees and customers.
• Know your franchisor and the brand identity – When looking for a suitable franchise, research your potential business partner to find out more about their long term goals and plans for the business. Ensure that their goals, motives and practices align with yours and always ask questions to ultimately ascertain the viability and suitability of the franchise for you.
• Seek professional advice – If you are a new business owner in the franchising and licensing industry, look for avenues and associations that can help you kickstart and guide you through your journey. The Franchising and Licensing Association (Singapore) has been set up for this very cause. We organise many events, mission trips, seminars and conferences for both members and investors who are keen to learn more about franchising. In particular, Fundamentals of Franchise Management (FFM) is FLA Singapore's flagship workshop conducted several times a year and designed with the purpose of helping and guiding businesses in their franchising needs along with local and international expansion.
• Be financially savvy – Before you get into a franchise business, consider your financial obligations and find out if you can meet them. Speak to experienced franchisees and ask questions about cash flow, ROI, and sales expectations.
• Location is key – Research thoroughly on the location of your franchise. Look at the demographics and footfall of some successful locations in the brand and try to replicate it or use it as a benchmark for your own location scouting purposes.
4. What are some ways FLA helps business owners in their franchising and licensing journey?
FLA provides a smorgasbord of activities and incentives for its members, such as:
1. Education & Training Workshops
2. Networking Sessions
3. Overseas Trade Fair Participation & Business Matching Sessions
4. Assistance with Government Grants
5. Discounted rates for FLAsia Show
6. Annual FLA Awards that provide branding and quality benchmarking for franchisors e.g. International Franchisor of the Year. These awards also provide confidence for potential franchisees and help to grow the industry.
- ASIA TODAY Newswire http://www.AsiaToday.com