How China outgrew Singapore’s F&B brands

(Edited and refined by James Loo, with the assistance of AI translation.)

Singaporean F&B brands that once occupied China’s high-end shopping malls were symbols of consumption upgrade among China’s middle class. These days, however, they are undergoing the growing pains of shifting from expansion to contraction. Food Republic, which closed its last Beijing outlet on 15 June after its lease expired, is the latest example — but far from the only one.

Food Republic’s parent company, Singapore homegrown brand BreadTalk, also exited the Beijing market completely at the end of March. Last year, its bakery brand BreadTalk closed all 11 of its outlets in Chengdu, Sichuan. BreadTalk now has nearly 200 outlets in China, down about 60% from its peak of 460 a decade ago.

Mall prestige to mass expansion

In the early 2000s, brands such as Toast Box, Ya Kun, Paradise Group, Jumbo and Song Fa Bak Kut Teh, all well-established brands at home, brought Nanyang flavours to the Chinese market, buoyed by the international halo of “Singapore quality” and setting up in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen. In the decade or so that followed, as Chinese incomes continued to rise and consumption upgraded, these brands enjoyed a golden period of rapid expansion, with many expanding into second-tier cities such as Chengdu, Hangzhou and Nanjing.

However, the once flourishing expansion momentum gradually reversed following the Covid-19 pandemic. From around 2023, these brands began successively scaling back their business footprint in China, and over the past year or so their operational focus has gradually retreated to the core market of Shanghai.

Take Jumbo Seafood, which focuses on mid- to high-end dining, as an example. The company would gradually close six restaurants in six Chinese cities this year and focus on the Shanghai market. It has been 13 years since the company entered China.

End of the golden period

In an interview with Lianhe Zaobao (LHZB), Jumbo Group executive chairman and CEO Ang Kiam Meng explained that the main issue now is consumer confidence. Measures such as the CCP’s “eight-point regulations” have reduced consumer demand for business meals and entertainment, affecting the entire F&B environment.

In addition, taste preferences vary greatly across different Chinese cities, and companies need to spend a great deal of time understanding the food culture of each city before entering if they hope to survive. Hence, based on the experience of the past few years, Ang felt that Shanghai, as a southern city and international metropolis, is better suited than cities such as Beijing to offering Jumbo’s Nanyang-style Cantonese and Fujian dishes.

Apart from Jumbo, Song Fa’s sole remaining outlet in China is also in Shanghai. Food Republic has retained just four food court outlets there, while Paradise Group’s Le Shrimp restaurant chain has also sharply reduced its footprint in China, with its business now focused almost entirely on the city.

As for why Singaporean brands are under pressure in the Chinese market, a BreadTalk spokesperson said the rapid rise of Chinese brands, coupled with the growing importance of food delivery and e-commerce platforms, has reshaped the competitive landscape in China. In response, BreadTalk consolidated its operations to direct resources towards markets and business models offering stronger opportunities for sustainable growth.

Putien, a Fujian cuisine restaurant chain that entered mainland China in 2015, currently has 27 outlets. Ling Ling Kong, general manager of Putien Restaurant Group China, observed that, in recent years, market traffic has become increasingly concentrated among leading internet-famous brands, making it harder for traditional quality restaurants to attract new customers.

She told LHZB that, amid the dual pressures of high rents in core commercial districts and the cost of high-quality ingredients, shrinking profit margins have become a reality for the entire industry. As a result, Putien will adhere to a “quality over expediency” approach in its future expansion plans, keeping its number of outlets within the range of 20 to 30.

Singapore brands ill-prepared to compete

A restaurateur surnamed Chen, who has operated a Singaporean restaurant in Beijing for 14 years, survived the pandemic through boutique operations and the restaurant’s unique positioning in serving both the Singaporean community’s networking needs and business banquet demand. The restaurant opened a second outlet last year.

Based on his observations, compared with local companies, Singapore firms are too cautious in capturing market share and not aggressive enough. Some brands were also reluctant to make bigger and more fundamental changes in order to remain in China.

Chen’s view is shared by some academics. Yan Li, senior lecturer at Nanyang Technological University’s Nanyang Business School, said that while Singapore F&B brands highlight their Nanyang characteristics, there is still room for improvement in product localisation, adaptation and innovation.

Yan likewise feels that compared with Singapore’s orderly and regulated market competition, the Chinese market is far more involuted. Faced with such intense competition, Singapore F&B firms often appear overly risk-averse and lacking in drive; in other words, they lack fighting spirit. 

Moreover, the era when “good wine needs no bush” has passed. China’s digital marketing has developed extremely quickly, while Singapore F&B brands are relatively weak when it comes to investing in marketing funds, channels and methods.

Localisation as the key to survival

Jianggan Li, CEO of consultancy Momentum Works, pointed out that the consumption behaviour of Chinese consumers has changed. Public admiration for overseas brands has clearly weakened, and consumers now care more about product quality, whether prices are reasonable and whether the experience is worth sharing. As a result, the “place of origin” of overseas brands — including those from Singapore — has shifted from a competitive advantage into mere background information.

Li assessed that Singapore brands that can continue to survive in China would either have to offer Singaporean characteristics and experiences that other Chinese brands cannot replace, or fully localise themselves — “operating as though it is a Chinese company, rather than simply replicating the Singapore model”. Otherwise, it would become increasingly difficult for them to find their place in the Chinese market.

Some Singaporean brands have adapted amid the challenges. For example, in addition to its traditional shopping mall food court business, Food Republic has partnered with schools and companies in China to operate canteens and provide staff meal services, opening up new avenues for growth.

Li felt that brands exiting China are not necessarily poor brands. Rather, they are brands that were once successful but failed to keep pace with the speed of change in the Chinese market.

He said that China’s market has never lacked opportunities — it is simply changing too quickly. When many brands entered China, they were solving the needs of consumers from a decade ago. Today, however, brands face an entirely different competitive environment.

For Singaporean F&B brands that still hope to remain in China, the real challenge may never have been entering the market, but staying there amid constant change.

This article was first published in Lianhe Zaobao as “市场今非昔比赛道越来越挤 新加坡美食中国遇逆风？”.

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