Chowking goes to Indonesia

In terms of the number of zeroes involved, the opening day sales of Chowking’s branch in Jakarta, Indonesia has set a company record. Then again, a US dollar is equivalent to between 9,000 and 10,000 rupiah; and a Philippine peso is equivalent to about 170 rupiah.

"We are happy with our opening day sales. It was higher than we projected," said Chowking Food Corp. president and chief executive officer Rufino dela Rosa.

The first store, located in one of Jakarta’s 120 malls, opened for business last Wednesday. Two more stores, also in Jakarta, will be opened before July this year. The number of stores will increase to ten by end-2006.

"In the early years of Chowking, master franchises in Dubai and in the United States were granted. Our global strategy, starting with Indonesia, is to first build the business ourselves and then franchise store-by-store, just like in the Philippines," said dela Rosa.

High Growth

The decision to invest more aggressively in its global operation was primarily driven by growth targets.

With a network of 319 stores, of which 309 are located in the Philippines, Chowking posted a 39.4% growth in revenues to P7.2 billion last year. This year, the sales target is P8.7 billion.

"Indonesia will not significantly contribute to total revenues this year or next," said dela Rosa. "In terms of growth, however, our global operation is the future of the company. We are close to saturation point in the Philippines. If we do not go abroad, there will come a time soon when we will be growing by only 5% a year."

Indonesia was chosen because it is a member of the Association of Southeast Asean Nations and because of its large population, the fifth largest in the world. Jakarta currently has a population of 12 million and at least five other cities have each a population base of one million or more.

Ground Work

Ground work began more than a year ago with the hiring of an American company to do a consumer study. Aside from religious restrictions (such as no pork for the predominantly Muslim populace), the study tracked the buying and eating patterns of the B-broad C markets that are Chowking’s traditional consumers.

A wholly-owned, Jakarta-based subsidiary called PT Chowking International was put up. Locals, which account for 90% or 55 of the company’s staff, were recruited.

"We placed ads in local newspapers for managers. The ones we hired were brought to the Philippines for training. Their first training program was for four months and the second one a month before the Jakarta store opening was for less than a week. These managers, in turn, trained the service crew," said head for international development Eduardo Paredes.

Taste

During the same period, the kitchen/commissary was being put up. Chowking’s Hong Kong chef Tommy Che was flown to Jakarta to adjust the menu to the Indonesian palate through a series of taste-testing by Indonesians until a certain level of internally-set acceptability level was achieved.

"From the start, we decided to keep the core Chowking menu, which was merely adjusted to the Indonesian spicy palate. For example, we serve chicken instead of pork dimsum or siomai and we serve it with sambal, which is spicy, instead of with the usual soy sauce and calamansi. Around this core menu, we have introduced signature dishes not found elsewhere in the chain such as Chicken Supreme, which garnered a 100% acceptability level in our tests," said Paredes.

To keep costs down, the company locally sources most of its raw materials. In the case of the 11-ingredient halo-halo, the company brought subcontractor Amelia Valenzuela of Amelia Sweet Products to Jakarta, to make final decisions such as which one of three acceptable varieties of banana would be a good substitute for the Philippine saba and what is the next best thing to locally unavailable purple yam or ube. It was also Valenzuela who trained the local commissary staff how to make the ingredients used in Chowking’s signature dessert.

Tests

With the kitchen/commissary up, PT Chowking worked on having the store halal-certified by the Office of Muslim Affairs.

"It normally takes four to six months to get certified. We got ours in two months because we were prepared," said Paredes.

A month before the store opening, the kitchen staff went through four stress tests, which checked the kitchen’s capability during the peak transaction period of a regular store day; two kitchen simulation tests; and one store simulation test.

A week before the store opened, members of the Filipino community as well as relatives and friends of PT Chowking’s staff were invited to the store to order and eat on the house. Guests were then asked to assess the service and the food.

"The comments were generally good. One guest suggested that we place sambal on each table instead of serving sambal with the ordered food," said Indonesia operations head Wilbert Escleto.

On purpose, PT Chowking chose to open its first store in a new mall, which has yet to have an anchor store. Located in Sunter, an area that would be equivalent to the Las Pinas-Muntinlupa area in Metro Manila, the store also deliberately opened on a working day, a supposedly weak sales day, to work out any kinks in the kitchen and on the store level.

The store has a seating capacity of 120, of which 30 seats are in a separate glass-enclosed section for clients who would like to hold their meetings.