Bar B Q Plaza eyes further expansion in region as AEC nears
June 21, 2014 00:00 By Kwanchai Rungfapaisarn
Operator conducts market study; talks underway for JVs in three countries
The Barbecue Plaza, operator of Bar B Q Plaza restaurants, is making a feasibility study on penetrating additional markets in this region to cash in on the coming Asean Economic Community (AEC), which will be effective next year.
Chataya Supanpong, assistant managing director of The Barbecue Plaza Co, said the company was making an in-depth market study and was in talks with potential partners for joint-venture possibilities in three key markets, namely Myanmar, Vietnam and the Philippines. Some restaurants could be opened by next year.
In Thailand, the company plans to increase the number of restaurants from 98 currently to about 125 by 2017.
Chataya said the AEC would provide tremendous opportunities and potential new markets for the company.
“Our overseas expansion policy will be conducted through joint ventures in order to benefit from local partners’ expertise while also leaving us with control over the operation and our branding. The JV model allows us to oversee the quality of the operation and the direction of the brand image to be consistent with Thailand. It also gives us a close relationship with the local partner, which is the major success factor in overseas expansion,” she said.
Chataya said the company had been studying the Asean market for a long while and had tested it in Malaysia for almost 10 years and Indonesia for almost two.
“We surely will use this knowledge and know-how to adapt to other AEC countries. The key to our successful expansion is really to study the market and fully understand the locality. The CLMV [Cambodia, Laos, Myanmar and Vietnam] countries are in our study plan,” she added.
Chataya said that for the company’s overseas expansion policy, it would focus on three major strategies. First is to identify the cities it plans to enter. These cities need high density of middle-income people, which normally means major centres. Currently, Bar B Q Plaza restaurants are operating successfully in Kuala Lumpur, Penang, Malacca and Jakarta.
The company opened its first restaurant outside Thailand in Kuala Lumpur in 2005 via a joint venture with a Malaysian partner.
In the second strategy, the company would consider opening restaurants only in major shopping centres because these are where the main customers it targets hang out, similar to Thai customer behaviour.
And last, the company plans to open around three branches per year, a relatively conservative number as it wants to spend time studying customer behaviour in each country to ensure business success.
In Thailand, the company is still committed to its business plan of both expansion and marketing activities. It says this country is still its main market and still has great growth potential despite the political crisis.
Chataya said the anti-government demonstrations at Rachaprasong and Lumpini Park had some effect on Bar B Q Plaza sales. There was a decrease, but only at branches in areas close to the demonstrations. The two major reasons were that people were not in the mood to spend their money, and many department stores in those areas were closing early, so there was less time to run the restaurants.
However, the political mayhem in Bangkok had no effect on other branches, as seen by the fact that the company achieved 15-per-cent sales growth in the first five months of 2014 compared with the same period last year.
Now, it seems that people are starting to spend their money as usual, as the company can see from sales after it has launched a new campaign called “Sa-Mak-Ki Refill”. Only a few days after its launch, Bar B Q Plaza outlets reported a significant increase in sales. The campaign ends on August 29. “This year, we expect sales growth of 15 per cent to Bt2.6 billion. This is because we have seen good signs of an increasing spending trend for Thai people in the latter part of the year,” Chataya said.
She said the company believed that the country would eventually return to a normal situation and people would spend their money again if they see good value. That is why the company needs to launch new campaigns continuously. This year, it will invest Bt290 million in marketing campaigns.
Of Bar B Q Plaza’s 98 branches nationwide, 76 are in metropolitan Bangkok and the rest upcountry.
This year’s expansion strategy will focus on renovating and refreshing its restaurants’ appearance as well as opening eight to 10 new locations with budgets ranging from Bt5 million to Bt10 million per store. The ratio of refreshed outlets and new restaurants will be 50:50.
Chataya said it was important for the company to change its restaurants’ image to make it more catchy, more lively and more trendy.
The opening of new branches will coincide with the launch of new department stores or big retail outlets.