The East West Hospitality Scribe

Honeymoon Dessert - A Scalable Business Model For Asia Pacific

  I don't apologize for being a fan of Honeymoon Dessert. In fact I am more of an addict!  This dessert Company began selling its delicious South China sweets in Hong Kong in 1995 and 13 years later has over 20 sores in the territory but more importantly 44 stores overseas of which 40 are in Mainland China.  Many years ago I asked some friends in Hong Kong and China about the international development potential for this concept and was treated to a long lecture about all the regional cuisine differences in China and why Honeymoon Dessert could not develop a national footprint on the Mainland.  First, they were selling desserts which is not exactly a big part of Chinese cuisine.  Most people prefer fruit after a meal and dessert is really treated as an after-thought.  Second, they were selling South China style desserts which were alien to people living in other parts of China.  Third, selling desserts and drinks by themselves is not an easy business considering the limited hours when most people are comfortable eating this type of food.  In the language of the restaurant industry, were there enough "day parts" to sustain the business?  And yet by the end of 2008, the Company had stores in Shanghai, Hunan and Jiangsu Provinces in addition to Guangdong.

Krispy Kreme - Why Did the Concept Fail in Hong Kong?

In October 2008, the franchisee of Krispy Kreme in Hong Kong announced that they would be liquidating the company and closing the majority of their 7 stores in the territory.  The main reason cited in most press announcements was the high tenancy costs in Hong Kong.  Obviously low sales lead to high tenancy costs and it is fair to say that Krispy Kreme just did not catch on with the local Hong Kong bakery customer.  So why did the brand fail when donut concepts have been highly successful in Japan, Taiwan, Korea and most of Southeast Asia and are recently gaining a following in Shanghai?

First, the product was just too sweet for the main Hong Kong Chinese bakery customer.  They prefer salty over sweet and the sweets they do eat are far less sweet than what is common in the USA or Korea.