Gong Cha’s return to Singapore: Rebuilding a popular bubble tea franchise

• Main Authors: RAMASWAMI, Seshan, TAN, Josephine, LIM, Thomas
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: innovation; market segmentation; crisis management; employee empowerment; brand management; Environmental sustainability; Asian Studies; Marketing
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/441; https://smu.sharepoint.com/sites/admin/CMP/cases/SMU-23-BATCH%20%5BPDF-Pic%5D/SMU-23-0007%20%5BGong%20Cha%5D/SMU-23-0007%20%5BGong%20Cha%5D.pdf?CT=1689155582413&OR=ItemsView
• Institution: Singapore Management University

The case describes the relaunch of the popular bubble tea franchise Gong Cha in Singapore in December 2017. This was seven months after its 80 outlets were converted, within a week, into a new chain named LiHO TEA by the former Gong Cha franchisee. Kang Puay Seng, the new franchisee, had the advantage of a large loyal customer base waiting for Gong Cha’s return, but also faced the challenge of balancing the expectations of the existing base of Gong Cha loyalists with the changes occurring in the fast-changing bubble tea market. In addition, he had to find new locations in an increasingly competitive market in which mall owners were now allowing multiple bubble tea brands to operate in the same mall. The COVID-19 crisis in 2020-21 was another shock that the franchise had to adapt to, especially during a two-month lockdown period. In 2022, five years after the relaunch, the bubble tea market seemed to continue attracting new entrants, with over 60 brands operating in Singapore. The case describes innovations in menu additions, retail format, and service model that have kept the Gong Cha brand popular in a competitive market. The challenge ahead is to continue to innovate as the bubble tea market would likely consolidate in the years to come. The case could be used in multiple courses such as Brand Management, Retailing or Services Marketing, and Principles of Marketing. By the end of the case, students will be able to understand how to market a “fast beverage” brand, analyse the challenges of relaunching a retail brand, assess the staying power of strong brands, examine the elements of menu design, evaluate how to leverage the employees, investigate the challenges of innovation, and develop sustainability measures.