Thu, Dec 11, 2003 page10

• Ten Ren wants to make tea hot

  GLOBAL REACH Although the tea-shop industry is often seen as a traditional-minded industry with little room for growth, the tea-store chain has an ambitious strategy

  • By Amber Chung / STAFF REPORTER
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  Ten Ren Tea Co (天仁茶業), which has seized 12 percent of Taiwan's tea market, is planning to open more Cha for Tea (喫茶趣) restaurants in Japan next year while launching four restaurants every year domestically, a company executive said yesterday.

  Ten Ren, Taiwan's largest tea shop chain with 113 outlets worldwide, unveiled its first Cha for Tea restaurant -- which sells food and tea beverages in a Western-style layout in an effort to differentiate themselves from traditional tea house -- in 2000.

  The company has opened 12 such restaurants worldwide, with six in Taiwan, three in Los Angeles, one in Australia and two in Japan.

  "Sales from these restaurants accounted for nearly 19 percent of Ten Ren's reported NT$1.3 billion in annual sales," said Douglas Lin (林仁宗), Ten Ren's general manager yesterday.

  The company reported NT$1.2 billion during the first 11 months of the year, up 7.14 percent from a year ago, the company reported yesterday. It aims to reach NT$1.5 billion in sales next year. Ten Ren shares stood unchaged at NT$17 on the TAIEX.

  The new type of restaurants have helped the company focus on female customers in particular.

  "Cha for Tea helps us to establish a delicate image. It has attracted 60 percent to 70 percent of female consumers who have traditionally rarely purchased tea products," Lin said.

  Ten Ren plans to develop two kinds of Cha for Tea restaurants in the future.

  "We will launch larger outlets in Hsinchu, Tainan and Kaohsiung next year, while opening the simpler-versioned ones inside department stores during the second half of next year," Lin said.

  The company is also targeting Japan for its overseas expansion plan next year. "We have decided to cooperate with a Japanese noodles chain stores, which have more than 300 outlets there, while South Korea and the UK would be our next focus after Japan," Lin added.

  Ten Ren's overseas expansion plan is deemed practical, according to a chain store and franchise expert.

  "To cooperate with local companies in the target markets which have already built up a well-known image or brand will be a effective way for Ten Ren to enter foreign markets," said Shirley Huang (黃淑麗), director of the Taiwan Chain Store & Franchise Association (台灣連鎖加盟協會).

  Ten Ren also plans to open a Cha for Tea restaurant in China, but not at this time, said Ten Ren Group's chairman Lee Rie-ho (李瑞河).

  "We currently have 400 outlets in China under the name of Ten Fu (天福) and we do not rule out the possibility of introducing such delicate restaurants as Cha for Tea there in the next three years," Lee said. "We hope to open as many as 1,000 outlets in 10 years, and we plan to set up our first Chinese restaurant in Beijing."

  The tea-making industry is viewed as a traditional sector, but this 50-year-old Taiwanese tea group hopes to rejuvenate the industry through a combination of transformation, outlet expansion and management innovation.

  To appeal to the younger generation in Taiwan, Ten Ren signed an agreement with Swire Coca-Cola Taiwan Ltd in May to produce and market bottled oolong and green tea drinks using the Ten Ren brand.

  "We hope to sell the bottled drinks to overseas markets, including China," Lee Rie-ho said. "But if we do market the product overseas, Coca-Cola will enjoy proprietary rights for the deal."
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