Bubble tea brand Gong Cha Korea is planning international expansion.
Aided by the global passion for Hallyu, or the so-called Korean Wave, Gong Cha plans to open stores in the Middle East and Europe. It will also buy more than 1380 stores in 18 countries, including the US, Canada, Australia, New Zealand, China, Japan, Singapore, the Philippines, and Hong Kong.
Currently, Gong Cha Korea operates only about 360 stores in its home market, which last year brought in KRW8 billion (US$7 million) profit – representing 11 per cent growth year-on-year.
As most of Gong Cha’s customers are aged from 10 to their 30s, the company expects entering new foreign markets will be easier through creating synergies with Hallyu.
The expansion will be facilitated by a share transaction with its parent company Royal Tea Taiwan in which the Korean business will progressively boost its ownership from 35 per cent to 70 per cent by January 2017.
Royal Tea Taiwan was launched in 2006, and introduced to Korea by franchisee Kim Yeo-jin in 2012. Two years later, Japanese private equity fund Unison Capital bought 70 per cent of the Korean business.