Tung Lok's recipe for China success: Singapore food

In Singapore, Tung Lok is rejuvenating some of its restaurant concepts and looking to attract younger diners. It also wants to roll out more quick-service restaurants.
In Singapore, Tung Lok is rejuvenating some of its restaurant concepts and looking to attract younger diners. It also wants to roll out more quick-service restaurants.PHOTO: TUNGLOK GROUP

Tung Lok Restaurants (2000) has switched tacks to sell Singapore cuisine in China - as its previous Chinese restaurant brand there was like "trying to sell ice to Eskimos".

The firm has opened a second Singapore Seafood by TungLok outlet in Beijing and is exploring further expansion in China in a bid to cut its dependence on the market here.

The second outlet was opened at the Chinese capital's China World Mall in May through a 40-per-cent-owned associate, Beijing Xihe Tung Lok Restaurant.

"It is exploring further roll-outs there and in other first- and second-tier Chinese cities in the light of the current tough operating environment in Singapore," the firm said in a business update yesterday.

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The food and beverage industry here has been faced with issues such as rising operating costs, and of late, weaker consumer spending.

Singapore Seafood by TungLok resulted after a rebranding last September from My Humble House. The concept was launched in Beijing in 2004 and operated via a 70- per-cent-owned subsidiary, My Humble House Xihe (Beijing) Restaurant, set up in collaboration with Beijing-based Chinese restaurant operator XiHe Group.

Founder and executive chairman Andrew Tjioe said yesterday that the group believes Singapore cuisine is a better prospect in China as running Chinese restaurants was like "trying to sell ice to Eskimos".

"We may not hold majority stakes (in overseas joint ventures) but at least we can continue to expand market presence in this very competitive, but very lucrative, market of China," said Mr Tjioe.

Its efforts have paid off.

The company said in May that it had stayed in the black, though net profit fell 30.9 per cent to $422,000 for the full year to March 31, and as at that date, the group had net working capital of $8.6 million and cash and bank balances of $15 million - a U-turn from the $6.8 million net loss three years prior .

The group has been rejuvenating some of its restaurant concepts and in 2015 launched online ready-to- eat food delivery service, Home Fiesta. It has also tied up with e-commerce and food delivery platforms and branched out into catering services. The group intends to roll out more quick-service restaurants and casual dining concepts in Singapore. Technology-centric, manpower- lean, and typically not more than 1,500 sq ft in size, quick-service restaurants will feature digital menu boards, self-service and ordering through smart devices. As Mr Tjioe explained: "Manpower costs are now the highest of all our costs."

His strategy is also to attract younger diners, who he noted tend to eat out more often but spend less on each occasion. The group aims to step up engagement with them via social media platforms such as Facebook, WeChat and Instagram.

The group operates 46 restaurant outlets across Singapore, Indonesia, Japan, China and Vietnam, including nine outlets held by its associates and 11 outlets under franchising or licensing contracts.

•Additional reporting by Annabeth Leow

A version of this article appeared in the print edition of The Straits Times on August 01, 2017, with the headline 'Tung Lok's recipe for China success: S'pore food'. Print Edition | Subscribe