Jollibee expanding to Malaysia, Indonesia

MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) is expanding to Malaysia and Indonesia in the next two years, banking on the international operations expertise it has developed through the years.

The quick service restaurant chain is looking at franchising its brands abroad as it takes advantage of free flow of capital, goods and workforce due to the ASEAN Economic Integration, an executive said.

“We hope that within the next two years, we will be able to go back to Indonesia and enter Malaysia,” JFC chief finance officer Ysmael V. Baysa told reporters on the sidelines of a forum organized by the Economic Journalists Association of the Philippines and ING.

JFC would cater to the 250-million population in Indonesia, whose fastfood market is still in the development stage, Baysa said. JFC invested in Malaysia and Indonesia in the 1990s but withdrew from the two countries due to the financial crisis.

JFC would introduce flagship brand Jollibee to its ASEAN neighbors at a slow pace as it studies and adjusts to the market, Baysa said.

“We hope (the rollout in Malaysia and Indonesia) would be faster, better than our experience in Vietnam,” Baysa said, adding the company has learned a lot from its operations in China, Middle East and Singapore.

In Vietnam, JFC initially rolled out 10 stores in its first few years of operations. To date, there are 49 Jollibee stores in Vietnam.

“It’s a learning process. You figure out how consumers find your product, your value and your service,” Baysa said, adding that the company would improve its food offerings and marketing schemes in time.

Baysa said JFC is also starting to cater to local tastes like in the Jollibee branch in Singapore where the store is packed by both overseas Filipinos and Singaporeans.

“We are getting better at understanding the local market and adjusting the business model,” Baysa said.

The foreign operations of JFC is composed of 588 stores: Yonghe King with 316 stores, Hong Zhuang Yuan with 43 and San Pin Wang with 45, all in China; 103 Jollibee, 32 Red Ribbon, 46 Chowking, and three Chow Fun located in US, Southeast Asia and the Middle East. It also has a 50-percent stake in Highlands Coffee branches in the Philippines and Vietnam; Pho 24 outlets in Vietnam, Indonesia, the Philippines and Japan; and Sabu stores in China.

Baysa said the company aims to become a “prominent player in the fastfood market in the years ahead for ASEAN,” where it stands to benefit from the freer movement of goods and labor.

“We also look forward to having a broader set of raw material sources from Thailand, Vietnam and Indonesia,” Bay said, adding that 80 percent of the company’s inputs are sourced locally while the remaining 20 percent comes from the US.

Faster processing of working visa will allow JFC to franchise its brands in the region as the local workforce can be transferred easily to new branches abroad, Baysa said.

“The only reason [we bring in Jollibee] is we are not able to find local brands to buy. In our case, we cannot find the opportunity to buy local brands in ASEAN market,” Baysa said.