Fosun China gets Secret Recipe
Feb 19, 2014
Fosun Group, a leading private conglomerate in China, has invested 210.5 million yuan (US$30.7 million) in its first overseas investment in the chain restaurant industry, the Shanghai-based China Business News reports.
In recent years, Fosun has been active in investing in the tourism consumption industry before selecting Malaysia-based chain Secret Recipe as its first target.
Fosun is a classic success story of China’s reform era. In the 1990s, the firm started its business in market research, later extending into the healthcare industry and real estate, among other sectors. In July 2007, Fosun International, the parent company of Fosun Group, was listed on the main board of the Hong Kong Stock Exchange.
Although this is the conglomerate’s first overseas investment in the dining chain industry, Fosun has taken up stakes in several domestic dining enterprises such as Shanghai-based chain South Memory. Last year, it established a unit to focus on investment in tourism and related businesses.
Secret Recipe, founded in 1997, is the largest dining chain in Southeast Asia, mainly serving cakes and fusion food with western and Southeast Asian flavors. The chain has opened more than 300 restaurants in 10 countries, including Malaysia, China, Singapore, Indonesia and Thailand.
China will be Secret Recipe’s main expansion focus in the future. Since it entered the mainland Chinese market in 2007, the chain has opened more than 50 restaurants in Shanghai, Nanjing and Wuxi. It plans to open new outlets in Guangzhou and Shenzhen by the end of this year. The chain expects to have more than 100 restaurants in China by 2015, with the revenue contribution from the mainland Chinese market rising to 50% of global sales from the current figure at less than 10%, the report said.
Secret Recipe in 2012 founded a vegetarian brand, Beyond Veggie, which currently has more than 10 restaurants in Kuala Lumpur. It will open the first Beyond Veggie restaurant in Shanghai this year.
Fosun chairman Guo Guangchang said the group is optimistic about the prospects for the restaurant sector in China. The industry’s compound annual growth rate between 2012-2016 is expected to exceed 27.9%, making it a highly valuable investment target.
Statistics showed that between 2004-2012, China’s dining industry revenues grew to 2.3 trillion yuan (US$387 billion) from 604 billion yuan (US$99.6 billion), with an average annual compound growth of 18.5%. However, competitors in the industry are scattered and there is still a big gap compared with developed countries, the report said.