Rodney Tang, the man who introduced Gong Cha to Singapore, just announced his plans of shutting down the popular bubble tea chain and replacing it with LiHo, his new home-grown brand.
LiHo is Rodney’s very own creation and he aims to have all 80 stores nationwide converted by next week. Currently, over 30 outlets have already started selling the drinks under the LiHo brand, according to Straits Times.
Source: EatBook.sg
LiHo is derived from Hokkien, meaning “You good?” or “How are you?”. Since Gong Cha was first introduced back in 2009, it has raked in an annual revenue of SGD$30 million (approx. RM92.5 million).
Source: The Straits Times
Rodney revealed that he only decided to make this drastic change after Gong Cha’s parent company in Taiwan decided to make a big change to their own business strategy. As their contract just expired, Rodney had planned to visit his Taiwanese business partners to discuss about Gong Cha Singapore’s future. It was then he found out that the Taiwanese parent company had sold their entire company to Gong Cha Korea, which in turn is owned by a Japanese private equity known as Unison Capital.
“So my friends were no longer in charge of the company and did not even inform me formally. I felt betrayed.”
“Initially, our agreement to operate Gong Cha in Singapore expired on Dec 31 last year, and they proposed an extension. We were more than happy to do so. I saw no reason not to extend,” he said.
“But I was busy and I kept putting off reading and agreeing to it. Anyway, we had been working together for years and I trusted them.”
Source: The Straits Times
Rodney went through the new terms by the new parent company and realised that they were much more restrictive and contained clauses that will affect him managing his other businesses. Initially planning to renegotiate the business deal, he suddenly had the struck of idea to start his own brand from scratch. So he’ll have to look out for new suppliers for his ingredients, new drink recipes, new brand, basically everything!
He confesses that after his staff first heard of this drastic change, they were very uneasy with it. However, soon enough, they settled with the idea and are all now ‘fighting’ with him. Sounds a little similar to Chatime’s case a few months ago!
As the master franchisor in Malaysia is a different person, Gong Cha’s brand in Bolehland is likely to stay! So at least we can still enjoy our Gong Cha Signature wintermelon tea <3
Who knows? LiHo may turn out to be a great brand after all!
Also read: What’s Happening Between La Kaffa And Loob Holdings?
