Taipei Times (TT): Could you share some more details regarding this joint venture?
Charles Hsu (徐承義): The US$5 million joint venture will be between the Tai Tong Food & Beverage Group (瓦城泰統集團), Golden Eagle Retail Group (金鷹商貿集團) and Taiwan’s largest disperse dye manufacturer, Allied Industrial Co Ltd (中美聯合實業), with Tai Tong holding a 60 percent stake in the venture, while Golden Eagle and Allied Industrial will each take a 20 percent stake. We expect the venture to be officially established in the near future.
TT: Tai Tong said earlier that the joint venture is planning to invest in food courts in China. How do you plan to develop this new business?
Hsu: Backed by our partner Golden Eagle, which operates 28 department stores in China and plans 17 new department stores by 2015, we expect to operate food court businesses — which will consist of competitively priced food booths — in the group’s department stores that are currently under construction or in planning.
The first food court is scheduled to be opened in Golden Eagle’s new department store in Nanjing’s Xinjiekou area in either the fourth quarter of this year or the first quarter of next year.
Meanwhile, we are evaluating about 10 department stores to see which would be able to accommodate a food court inside.
TT: What prompted the company to enter the Chinese market with a whole new business model?
Hsu: Tai Tong has been aiming at being a group with multiple brands and to be competitive in various different markets. Therefore, aside from expanding its three brands — Thai Town Cuisine (瓦城泰式料理), Very Thai Restaurant (非常泰) and 1010 Hunan Cuisine (1010 湘辣料理) — the firm is interested in launching new business models in China.
TT: Unlike department stores in Taiwan, food courts are not that commonly seen in Chinese department stores. What marketing strategies will you use to attract customers?
Hsu: Tai Tong will develop a number of new flavors and new brands to be directly operated in the food courts.
Furthermore we might offer local specialties in each food court, based on its location, to satisfy local customers’ taste buds.
With an eye on the increasing market potential for competitively priced restaurants with average customer spend between 18 yuan (US$2.90) and 50 yuan, we believe Tai Tong’s expertise in menu development and Golden Eagle’s experience in the department store sector will create synergy for the venture.
TT: Following the plan to enter the food court market, will Tai Tong maintain its original plan of store expansion in China?
Hsu: Definitely. Tai Tong will open its first Thai Town Cuisine restaurant in Shanghai in the third quarter of this year, which will also be situated in a department store.
I have mentioned previously that we plan to open our first restaurant in the first half of this year, however, the plan has been delayed due to having to coordinate with the booth adjustment season of the department store.
TT: What is your view of the global economic sentiment for this year?
Hsu: I remain confident about the prospects of the restaurant sector this year on the back of a mild global economic recovery.
With our cooperation with Golden Eagle and our store expansion plan, Tai Tong is planning to recruit 1,200 new employees this year.
For its next step, the group is scheduled to open a Thai Town Cuisine outlet in New Taipei City’s Xindian District (新店) tomorrow. We expect the group’s outlets will total 70 in Taiwan and China by the end of this year.