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Goubuli prepares to put big dough into expansion

By Zhao Yinan (China Daily) Updated: 2014-01-10 08:07

But some are predicting that Goubuli's ambitions to go global will face failure if it can't cater to local eating habits and abide by local laws regarding consumer protection and labor rights.

Li Juan, a 28-year-old Tianjin resident, said she believes that Goubuli has lost customers over the years because of high prices and diminishing quality.

"I once treated a visiting friend at Goubuli's flagship restaurant, but the stuffed buns were too oily, and the waiters didn't take care of us very well," she said.

Mou Dongliang, deputy secretary-general for the World Association of Chinese Cuisine, said that while domestic companies may eye the overseas food market, many fail to meet local tastes, so their customers are limited to overseas Chinese.

But Mou said that even though some restaurants may have customers lining up, it is still hard for them to expand into a chain business.

"They may succeed at one place, but such success can rarely be duplicated," he said.

"They have to research local eating and spending habits, as well as local regulations on business management, consumer protection and labor rights, before opening a new store. Expansion without proper research can be very risky."

Yang Lin, a lawyer at the Beijing-based Yingke Law Firm, said Goubuli's deal can be completed only if it wins approval from the Tianjin Commerce Committee, and noted that when the government will complete its assessment is hard to predict.

"The time of closing the deal will be largely decided by the local government's attitude. It could be possible for Goubuli to wrap it up in six months, since no governmental review is needed on the US side," she said.

She suggested that Goubuli hire accounting, business and legal consultants to analyze and counter any possible investment risks.

"A successful acquisition is only the first step in going global," Yang said. "Business restructuring and how to meld with the local culture are some of the challenges that lie ahead."

Li Xiang in Tianjin contributed to this story.

 

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