Although Nolboo, a Korean restaurant franchise, made its first foreign entry in 2006 by opening a restaurant named “Galbi in a Jar” in Beijing, at the time, the operation was limited in scale. The virtual foreign expansion started in May 2014, as Nolboo signed an agreement to form a joint venture with a local partner. As of Aug. 2015, Nolboo has opened 12 locations specializing in Nolboo budae stew and grilled meats in Shanghai, and 2 locations serving Nolboo galbi marinated in Korean traditional jars in Bejing and Qingdao. Last month, the company launched a restaurant complex named “Nolboo Chef’s Choice” serving bossam, galbi, and budae stew in Universal Studios in Japan. In total, the company has opened 15 locations throughout Asia.
Unlike other Korean franchises in foreign markets, Nolboo didn’t pay special attention to a localization strategy for fear of losing its unique flavor. Rather, Nolboo has striven to maintain the original characters of the dishes and sought ways to recreate them in foreign markets. The popularity of Hallyu, or the Korean Wave, has helped to create a favorable business environment for Nolboo, as Chinese consumers have formed positive views of Korean products and services. This allows Nolboo restaurants in China to use the same company logo that the company uses in Korea in Chinese stores.
Nevertheless, under special circumstances like the Shanghai case, Nolboo caters to the local food culture. For instance, there is a noticeable difference between Korean and Shanghai food culture. For instance, in Chinese food culture, Chinese people don’t have side dishes. Also, when Chinese people eat budae stews, they prefer noodles in the stew over a broth. For such reasons, Nolboo doesn’t offer side dishes, and serves budae stew with a large portion of noodle and little broth.
As for ingredients, due to the difficulty of shipping ingredients from Korea, Nolboo restaurants in China are always on the lookout for local suppliers that can help Nolboo restaurants to recreate the original tastes and characters of the menu served in China.
Meticulous adaptation to local preferences has been possible due to the joint venture the Nolboo entered into with Mak Brands. Mak Brands is well versed in local knowledge and experienced in operating restaurant businesses in China. The partnership with Mak Brands helped Nolboo quickly adapt to the Chinese market without much trial and error.
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The popularity of Korea’s cultural and entertainment content, or so-called Hallyu, contributes to the Korean franchise settling in China. Hallyu is still sensational there. Chinese consumers’ strong affinity for Korean entertainment and the high levels of awareness among Chinese consumers of Korean celebrities serve to rapidly propagate aspects of Korean lifestyle. For instance, dresses or food that appear in the Korean TV entertainment programs frequently become fads in China.
In addition to the Korean way of having fried chicken when they drink beer, grilling meats over a charcoal fire has quickly caught on with Chinese consumers. Just like eating pasta or pizza represents an exotic experience in Korea, eating galbi, budae stew, or Korean style fried chicken is known to give a similar impression to Chinese people. Even though the budae stew served at the Nolboo restaurant is relatively high priced compared to restaurants in Korea, the average sales per restaurant in China are higher than that of the restaurants in Korea. The fact that the majority of guests are women, a segment of consumers that are known to be relatively more fashion-sensitive, also helps boost the trend.
Asked about the Korean government policy toward supporting overseas Korean food service franchises, the company said that it feels that although the government shows great interest in providing support for the Korean food service and retail industry seeking overseas expansion, it wishes that the support could be provided in a more systematic, unified, and consistent way. For instance, given that three government agencies – the Ministry of Agriculture, Food, and Rural Affairs (MAFRA), Small and Medium Business Administration, and Korea Trade-Investment Promotion Agency (KOTRA) – provide relevant policies, they tend to have overlap or friction. The company also feels that the government support proves limited in the substantive dimension. When asked to elaborate on the point, the spokesperson said that the company wishes that when the government provides financial support, the procedural process could be more simplified and unified. He cited that the existing regulatory procedures and criteria are so complicated and time consuming that they cripple timing for the business opportunities. He also added that the government’s consulting services in the form of manuals and guides on regulatory environments in foreign countries should be more helpful.