Delifrance back in China after 20 years
French bakery chain to open cafes in Shenzhen and Guangzhou more than 20 years after its first attempt to crack the market failed
Delifrance is planning a comeback in the mainland market, brushing off a failure across the border more than 20 years ago. It is opening two bakery cafes in Shenzhen and Guangzhou next year as part of the new push.
The French bakery's initial move into China took place long before Starbucks and Costa Coffee's relatively recent attempts to add Western tastes to the menu of China's young generation. It opened its first cafe in Shanghai in 1987 but it did not end well.
"The attempt was probably made too early and there wasn't the proper population back then," said Jean-Manuel Leveque, managing director of Delifrance - a subsidiary of French milling giant Grands Moulins de Paris (GMP) which owns the brand.
Now, owing to the rise of a middle class which pursues not just luxury goods but also a fashionable lifestyle, the French pastry maker saw its chance to return. If things went well, Leveque said they will open two to three more outlets in each of the mainland cities by 2015, all in new shopping malls and high-end residential areas.
Delifrance will work on the expansion plan with Delifrance Asia - sold off by GMP some 30 years ago and which now manages the brand in the form of cafes, bistros and wholesale bakery in the region including Hong Kong, Singapore and Malaysia.
"It doesn't take an economist to know it's better to look for growth out of Europe," Leveque said. "But it's also the right time for us because we have a new partnership with Delifrance Asia."
The new partnership meant that all the Delifrance outlets in Asia would now have to make croissants, baguettes and macaroons exactly the same way as their baking counterparts in France do.
"Being a master franchisee of the brand now and not just a trademark user, we would have to follow completely the bakery's recipe and work flow, which means 38 per cent of the butter we now use in our croissant, for example, comes from France," said Francis Chan, country manager of Delifrance Hong Kong. "All Delifrance pastries you now have in Hong Kong are exactly the ones you would find in France."
Like many of its peers, Delifrance is upgrading its style, menu and restaurant design to remain competitive in the wake of rising costs and thinning margins.
"Butter price went up 35 per cent within two months last year, while the year before it was flour, every year we faced strong pressure on material prices," Leveque said.
Apart from China, the French bakery is also looking to open new markets in Latin America and the United States.