Hong Kong rekindles love for bubble tea
Many Hong Kong people are willing to spend an hour even more time waiting in lines just to buy a cup of bubble tea and that returned love for such beverage has lured more and more traditional Taiwanese tea shop operators to come and tap the market.
“We want to expand our business to other countries through Hong Kong as it gathers travelers from all over the world,” said Enre Lui, a director of Taiwan-style drink shop Pin Cha Liu Jing.
Tiger Sugar and Jenjudan, located in Causeway Bay, hit the Hong Kong market this year and both shops have attracted plenty of consumers mainly due to their good reputation in Taiwan.
“Traditional Taiwan-style drink shops choose places with larger traffic flows like Causeway Bay to open their first store aiming to gain considerable prestige,” added Mr. Lui.
Stricter control on ingredients regain confidence
The Taiwanese drink industry has been working hard to regain customers' trust since two food scandals: a plasticizer scandal in 2011 and a toxic food starch scandal in 2013 greatly dampened their business.
“In order to regain the trust of more local consumers, we guarantee not to use any ingredients that contain plasticizer or pigment but only natural fruits and other healthy components,” Mr. Lui said.
Now Taiwan-style drink shops in Hong Kong is active again.
The B & S International Holdings (1705), the Hong Kong franchisor of famous Taiwanese leading tea chain TenRen Tea, listed on the Hong Kong Stock Exchange in March.
Revenue of the company increased by 22.9 percent to HK$452.1 million for the year ended March 31, 2018, according to its annual report.
The average daily sales volume of beverage products almost doubled from 13,200 cups to 21,400 cups during the period.
The company plans to open new outlets and introduce new retail brands due to a recovery of consumer confidence and strengthening of consumer’s spending power in Hong Kong this year.
The number of TenRen retail outlets are expected to increase by 16 stores to 49 stores in 2020.
Taiwan-style drink becomes teenagers' favorite
Buying Taiwan-style drinks has become a new trend among teenagers in the past few months.
For example, most of the young consumers are willing to queue for an hour or even more time to buy a cup of brown sugar boba milk tea with cream mousse, the signature product of Tiger Sugar.
“Hong Kong youngsters prefer searching new things on the social media, especially those signature products pursued and recommended by most of the local people on the Internet," said Jasmine Hung, who is addicted to Taiwan-style drink, such as bubble tea.
Delicately packed and colorful drinks draw more attention, attract teenagers to take beautiful photos and post them on the social media platform, which creates a virtuous cycle of promotion.
“Hong Kong’s culture is similar to Taiwan’s, so Hong Kong people accept Taiwan things more easily and faster,” Ms. Hung said. This is another reason that makes Taiwan-style drink so popular in Hong Kong.
Mr. Lui believed that Taiwan-style drink industry still sees room for growth, as eating and drinking are essential to Hong Kong people.
As a loyal customer, Ms. Hung welcomes more Taiwan-style drink shops opening retail outlets in Hong Kong because more competitions among different brands lead to higher quality and lower prices.
“More competitors will have a positive influence within Taiwan-style drink industry,” said Mr. Lui. He also encourages newcomers to join the industry and bring new attractions to the market.
Business opportunities and challenges coexist
"To attract more customers, Taiwan-style drink shops should focus more on the promotion through social media as more targeted customers are youngsters who hardly do (things) without the social media nowadays,” suggested Jill Chan, another residence adoring Taiwan-style drink.
Different Taiwan-style drink shops can think about how to create a connection among teenagers through social media platforms like Facebook, WeChat to stand out from other competitors and promote new products in Hong Kong.
However, Hung also worries that Taiwan-style drinks may just boom in the short term. The purpose of some customers is to try new things or create social awareness, while they won’t be loyal to the shops or build a long-lasting connection with them.
“Taiwan-style drink won’t receive sought after only for a short period, because we don’t have a specific targeted market, not like other food industry such as the Mille crepes cake,” Mr. Lui said.
Despite all this, the Taiwan-style drink business is very competitive. In some areas, like Mongkok or Tsuen Wan, numerous Taiwan-style drink shops are located next to each other, which creates a negative affection for those small-scale Taiwanese drink shops.
The prospect of Taiwan-style drink shops may not be bright. “I will not suggest people joining the industry if people just aim to make money, because B & S International Holdings is just the minority which hit the market successfully,” said Ms. Hung.
《The Young Financial Post 新報人財經》