Franchising Opportunities: Testing Business Innovation via Hong Kong

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Hong Kong has become an important showcase for brands from around the world. This is partly thanks to the influx of affluent tourists from the Chinese mainland over recent years. Many of the brands showcased in Hong Kong have found favour among these tourists, with a number of them having been impressed by the genuine quality, fashionable designs and shopping environment on off throughout the city. Mainland tourists tend not to visit Hong Kong just to shop, but also to experience its cosmopolitan lifestyle.

As the enduring home of a substantial number of expatriates and a truly international city at the very heart of Asia, Hong Kong embraces a rich diversity of cultures, talent and ideas. The city fosters a deep sense of inclusion, connection and a commitment to building both understanding and extensive networks with the rest of the world. Hong Kong is, thus, well-positioned to be the cultural gateway between the East and the West, gathering and

distilling the very best of Asian cultures for its residents and international visitors, while also bringing the finest examples of global culture to Asia.

Hong Kong, as the lifestyle capital of Asia and a major exporter of many lifestyle products (including films, music, visual arts, media, entertainment and fashion) is then the ideal place to showcase and market franchise concepts.

Innovation and Creativity Breed Success

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While Ronnie Cheng first came across liquid nitrogen ice cream in England, he quickly realised that this special product was notably smoother than traditional gelato. There was also a fun element to watching it being made, with the suffused smoke creating a captivating and alluring atmosphere. Ever since this initial encounter, one tantalising question was uppermost in Cheng’s mind – could he build a business based around this product?

As a pharmacist with biochemical knowledge, Cheng understood that liquid nitrogen could be utilised to instantly freeze different natural ingredients into ice cream. The use of fresh and natural ingredients to create the ice cream ensured there was no need for artificial colouring or preservatives, common ingredients in traditional ice cream. This made-to-order ice cream also does not need to be prepared in large batches, making each serving fresh and quite unique. All of these characteristics combine to make liquid nitrogen ice cream an appealing product, especially for those middle class Hong Kong consumers who are renowned as being very open to trying new things.

After careful consideration, Cheng decided to quit his job in England and return to Hong Kong and fully commit himself to this new business venture. Cheng spent a year preparing before his first Lab Made shop opened in 2012. Now the brand extends across five outlets in Hong Kong and two in Shanghai. It has also developed more than 80 proprietary recipes. Cheng believes that its variety of innovative recipes sets Lab Made apart from its competitors, lures new customers in and results in repeated purchases.

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Not long after Lab Made’s launch, it became a media favourite, winning fans with its superior quality, spectacular creations and its ability to customise each serving. At the same time, Cheng received considerable interest from investors looking at franchising the business. Cheng now believes the brand is ready to be franchised, following years of fine-tuning its operational procedures and training manual. To this end, franchise rights have now been assigned in Shenzhen, Dongguan and Wuhan.

With a vision to start a truly ‘cool’ trend and open 200 shops via franchising across the mainland by 2017, Cheng is continuing to look for Chinese partners. This year he will exhibit at the World SME Expo in Hong Kong, where he will be able to introduce his business concept to a wide number of prospective investors.

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