Home-grown Japanese restaurant Sushi Tei has built a fiercely loyal customer base, enabling it to expand across Singapore and the region. Executive Director Allen Tan reveals the secrets to the brand’s winning formula.
When Sushi Tei first opened in Holland Village in 1994, Japanese food was not readily accessible for most Singaporeans. But the new entrant, focused on making sushi, sashimi and other Japanese fare for the general customer, represented a paradigm shift, attracting a new audience. Today, almost 25 years later, incomes in Singapore have risen while Sushi Tei’s prices have stayed affordable, allowing the chain to flourish. It now runs 13 restaurants in Singapore, with many more across South-East Asia. Early next year, it will open a high-profile store in Jewel, Changi Airport’s shopping, entertainment and lifestyle complex that is already making global headlines.
From the outset, Sushi Tei pitched itself as a family restaurant in a sector now rife with competitors. “When we were founded, Japanese cuisine was perceived as fairly exotic in Singapore but 25 years on, it is more mainstream now,” Tan says. “We have a lot more competition, especially in malls, where families choose a restaurant based on price bracket.” Sushi Tei sets itself apart with a grand menu, which changes about every two years, seasonal menus and special promotions. It also offers a membership that comes with benefits and features an e-ordering system using iPads on each table. “You need to innovate and give customers a reason to return.”
The food is still the main attraction however, standing out as authentic and fresh, but catered to local tastes and bolstered by their signature service. “The restaurants are nicely kitted out for families,” Tan says. He’s frank about the challenges of running the organisation, especially staffing issues, which were made more problematic due to strict foreign-staff quotas in Singapore. Sushi Tei has tackled this issue by reaching out to technical schools in Singapore to offer jobs to their graduates, and the e-service ordering system has helped buffer the need for front-of-house staff and kitchen labour.
Another familiar issue in the F&B industry is the logistical complexity of “getting the food into the restaurants at the right time, with proper storage and handling. A lot of our food comes from Japan .... we are a conduit for Japanese growers and farmers to showcase their produce. If you don’t handle and store it properly, it changes the entire customer experience.”
Obstacles aside, the rewards have made the hard work worthwhile. With a background in banking and finance, he joined Sushi Tei’s board of directors in 2015, and calls the enterprise “Main Street rather than Wall Street. We’re getting it right every day, in little bits, for the customer. Seeing them walk away happy after a meal, that’s a lot more satisfying than closing an M&A deal. It’s real.” The sense of comfort and connection has helped Sushi Tei cultivate a legion of regular customers, some returning fortnightly for years. The ambience and interaction between staff and customers have also transcended the standard hospitality norm to one more familiar and familial.
The brand’s upward trajectory has been sure and steady. “It has grown organically in Singapore,” Tan says. “We have 81 outlets in nine countries. We are South-East Asia-centric now, but have had customer enquiries from further afield, the European Union and United States, for example, for us to set up in their home countries.” In addition to Sushi Tei, the owners (Tan and an institutional shareholder) have just launched two new brands aimed at younger customers who prefer simpler, more wallet-friendly prices. In Singapore, ‘Hokkaido-Ya’ welcomed its first customers in Vivocity in June 2018, while ‘Tom Sushi’, launched in Indonesia in October 2017, is expanding rapidly and now has several branches in Jakarta.
This aggressive expansion requires an extensive and complex cash flow management, which is supported by their bank, CIMB. “They are the best at what they do,” Tan says. “We use them for payroll, cash management, and overseas payments. They give us very attractive and competitive rates … They are very attentive, prompt and professional; when we want immediate service they are there for us.”
The bank’s network has also been instrumental to Sushi Tei’s growth, especially in Malaysia and Indonesia where it has 13 and 45 restaurants respectively. During this expansion, Sushi Tei continued to bank with CIMB, first opening their Indonesia current account in 2011. “CIMB has been really expanding into Indonesia recently,… our largest market, so having that seamless service has been fantastic …. [Having CIMB as a partner] is hugely important, basically it’s the infrastructure that supports the business,” Tan says, likening its importance to food supply or physical premises. “CIMB is a one-stop-shop solution.”
The assurances of a partner such as CIMB have allowed Tan and his team to focus on the core value of authenticity, especially in products and offering value for money. “We live in a world with a lot of social media, a lot of hype,” Tan says. “We want a customer to walk away and say, ‘I got really good value for what I paid’. That’s really important. That honesty is how we should treat our customers.”
He urges entrepreneurs that have an idea to “just do it”. “Be stubborn and resilient,” Tan says. “It is tough here because the market is small, but it is a global hub and the customer is fairly well-off. You need the determination to keep trying.” Tan also believes there should be a narrative behind products, hence initiatives such as QR codes on seasonal menus that explain where the fish and beef came from is a way to deepen the relationship between the food, the customer, the experience and Japan. Looking at growth, the sub-brands represent an exciting opportunity. “It’s still the same good-quality food,” Tan says. “We are able to use the power of being a chain and our economies of scale to provide more wallet-friendly prices in both the new brands.”
Tan’s enjoyment of his work is evident in the passion with which he speaks. “My day starts at 6.30am and ends at 1am and I have no complaints. Though I could sleep more,” he jokes. “I look forward to continuing to work with great colleagues and partners. That makes life more enjoyable and meaningful, more than economic success. I am grateful and humbled to be part of this family. While we’re around let’s do the best we can.”
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