Is your QSR ready for international expansion?
Andrew Lyme, Managing Director of Global Retail Partners discusses Australian food retail systems and trends in international expansion.
QSR Media: What trends do you see with Australian food retail brands expanding internationally?
Andrew Lyme: The most common trend we are observing is the smaller network size of Australian retail systems now expanding to overseas markets. Traditionally, international expansion was considered once a brand reached outlet saturation in its domestic market or had achieved a heightened brand profile so went looking abroad for growth. Today, brands with only a relatively small network of stores or franchisees can attract genuine attention from international markets keen to experience the next up and coming food trend or concept. The worlds expanding middle classes and increased wealth in many developing countries is a contributor. This combined with availability to the internet and social media, competitively priced consumer travel and exposure from the domestic foreign student industry have increased brand awareness and international consumer interest in Australian brands and products. These consumers are brand savvy and aspiring to experience new and meaningful concepts and trends from other countries.
QSR Media: How suitable are Australian retail brands for international expansion?
Lyme: Firstly, western brands have proved extremely popular in Asia particularly, and there is continual demand for quality Australian offers in these markets. The Australian retail market itself is extremely challenging compared to many overseas markets given high labour and real estate costs relative to population size and density. We also have a very wide and diverse range of domestic retail offers and concepts. Australian brands work extremely hard to compete and are continually fine tuning their product offer, pricing, formats and labour models in order to remain relevant and succeed. It’s constantly overcoming these domestic challenges that often provides our home grown brands with a commercial advantage when they enter other countries.
QSR Media: So is it easy for Australian retail brands to enter new countries?
Lyme: It’s by no ways easy, but certainly attainable, and an excellent opportunity for business expansion and long term growth. However, its crucial Australian businesses adopt well planned entry strategies and ensure they have proper systems and resources in place to support the international initiative. Also, to remain open minded and flexible is important, as in many cases, products, store formats or supply chain models that work in Australian can require some modifications to succeed in overseas territories.
QSR Media: How can Australian brands ensure success in international markets?
Lyme: Most retail brands and franchise systems choose to partner with experienced local operators by way of JV, MFA or License. The overseas partner can navigate language and cultural barriers and will typically fund, develop and operate the brand under supervision. Selecting the right international partner is almost always the defining factor in determining a systems success in an overseas country.
QSR Media: How does a brand ensure they select sound international partners?
Lyme: Its important Australian franchisors adopt a strategic approach to the promotion of their brand to international partners. Franchisors/brands should ensure they research the potential partner opportunity pool in a subject market then target the most suitable candidate profiles for their brand and offer. Thoroughly understanding each candidates experience level, business history, financial standing, strengths and limitations will assist Franchisors to make informed decisions. Also, benchmarking findings alongside other potential partners business and development plans and taking into consideration learnings gained from the Franchisors own activities will help determine suitability. An international partner relationship is typically long term, so both the Franchisor and international partner need to align their development and operational visions for the brand.
