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Jollibee enters Malaysia: Tips to surviving a cut-throat F&B industry

Filipino fast food restaurant Jollibee plans to open its stores in Malaysia and Indonesia within the next few years. In a conversation with A+M, Dennis Flores, head of Jollibee International Business, Europe, Middle East, Asia and Australia said these markets are key to the brand’s global growth due to possible “potential patronage from the local and Filipino community”. He said, “We put our consumers at the heart of our marketing strategies. Our team carefully studies each new market to make sure that our brand values and USPs are communicated effectively.”

Meanwhile, QSR Brands has plans to expand its KFC business with an additional 30 new outlets by the end of this year. McDonald’s Malaysia also said it will fork out RM1.4 billion on its latest expansion plan to increase to 450 outlets nationwide by 2025.

According to the Department of Statistics Malaysia, the country’s F&B industry experienced an annual growth rate of 5.1%, increasing from 130,570 establishments in 2010 to 167,490 in 2017. Jollibee’s expansion into Malaysia, as such, adds to the wide range of existing F&B outlets in the country.

But to enter and stand out in a crowded F&B market such as Malaysia is not easy. To really make an impact in a country where food dominates cultural conversations, new F&B brands would need to address the basics of location, cuisine, price and service, Abhinav Sharma, head of strategy, Dentsu One Malaysia explained.

While a new restaurant never fails to generate interest, the more important aspect is sustaining itself over time.

Speed and consistency

Speed and consistency have also long been the main concerns for consumers when dining at restaurants. However, Sharma said that between the two, consistency is more critical because the Malaysian palate has evolved to become more sophisticated. The need for speed, in the meantime, is based on the type of F&B outlet. For example, speed is less of a concern for fine dining restaurants which place emphasis on the ambience, whereas it is integral to the operations of a fast food chain.

Agreeing with Sharma is Amit Sutha, managing director, UM and Ensemble Worldwide, who said food retail is “a complex business” and success will come from the right mix of marketing acumen, product vision and ground level operational efficiencies. “That in turn is driven by a solid understanding of the customer, down to a granular regional or local level,” Sutha said.

Leveraging digital to drive customer footfall

While there is no surefire way to ensure success for a new entrant into the F&B industry, there are certain parameters that can help and support a brand.

According to Justin Peyton, chief strategy officer, Asia Pacific, Digitas, F&B brands need to mix digital with brick and mortar to deliver a better customer experience. One such example would be allowing consumers to order on an app and picking up when they arrive. Geo-location can also be used to target prospects and those dining at competitors’ outlets with discounts in order to drive trial. Also, brands can partner with delivery services to broaden accessibility and appeal.

“Brands are innovating around service to keep up with the fast pace of today’s consumers, and successful brands will continue to adapt to changing lifestyles,” Peyton said.

Meanwhile, UM and Ensemble Worldwide’s Sutha added that F&B brands can adopt a digital-first direct marketing approach by building a robust CRM platform and creating single-view databases to manage consumer data better. He added that innovation in product portfolio, in-store experience and variety in distribution and ordering need to be on point for a brand to be deemed successful.

Agreeing with the need to leverage digital is Dentsu One’s Sharma, who said that instead of being afraid of digital, F&B brands need to embrace it and use it to manage changing consumer habits and improve service levels. “Digital has enhanced, smoothened and improved the dining experience. It has become a great way to get critical consumer feedback, along with timely management of complaints,” he added.

Human touch still a key factor

Despite the rise in delivery services and apps targeting consumers that seek convenience, one aspect that certain F&B brands overlook, particularly quick services restaurants (QSR), is hospitality and customer service. Jason Wong, group managing director, Geometry Global said hospitality and customer service are an extension of the brand. He added:

[Hospitality and customer service] are measured just as important, or at times more important than the product today.

QSRs can be characterised by two traits – engaging in quick expansion due to the business model and serving or delivering the food quickly. Assuming that all QSRs deliver the food on time, Wong said there is no point of difference. Thus, it is still important to have the human touch, which will also serve as a point of differentiation between the brands.

Likewise, Sharma said that while food delivery services have made it convenient for consumers to obtain food, at the end of the day, companies still require experts in the F&B sector to understand food and food trends. Another element that brands cannot afford to overlook is generating positive word of mouth, which Sharma describes as “the strongest marketing element” required for continued success.

Nonetheless, he explains word of mouth is a double-edged sword where “a negative sentiment could potentially lead to a restaurant shutting down overnight”.

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