High-End Dining Cools, Affordable Bento Booms! Chao Jing-lun Reveals Domestic Consumption Downgrade, Fried Chicken Big Lion US Store Delayed to August-September

As Taiwanese people treat traveling to Japan as domestic travel, and some high-income talent moves overseas with Taiwan's supply chain, domestic food and beverage consumption is experiencing structural changes. Yang Qin International (2755) Chairman Chao Jing-lun today (28th) stated that from the group's meat supply end, the demand for five-star hotels has recently decreased by nearly 10%. In contrast, high-speed rail routes, PX Mart, and other affordable hot bento meals continue to sell well, showing that consumers are not completely without spending power but are shifting some of their spending overseas, and domestic food and beverage consumption is more focused on cost-performance. 'To a certain extent, this is consumption downgrade.' In the face of changes in domestic and overseas consumption power, Yang Qin's store expansion strategy has become more cautious. Its subsidiary, Fried Chicken Big Lion, continues to expand in the Indonesian market, aiming for 38 stores this year. However, the first store in the United States, in Virginia, has been delayed to August or September due to issues with the landlord, fire safety, and administrative procedures. Chao Jing-lun emphasized that overseas expansion cannot just pursue rapid store expansion but must first establish a profitable model for the first store and then replicate it to the second and fourth stores. Taiwanese people treat traveling to Japan as domestic travel, and high-end dining demand is diverted overseas Chao Jing-lun stated that the overall consumption environment recently is not ideal. Part of Taiwan's original food and beverage and accommodation expenses are being diverted to short-term overseas travel. He observed that cities like Osaka and Fukuoka in Japan, as well as Seoul in South Korea, Hanoi in Vietnam, and Penang in Malaysia, have become common travel choices for Taiwanese families. Affected by factors such as travel distance, exchange rates, tax refunds, and flight convenience, many people even view traveling to Japan as a substitute for domestic travel. 'It's full on weekdays and full on weekends. As long as there are three consecutive holidays, the planes are almost full.' Chao Jing-lun said that when people choose to go abroad during holidays, the hotel, restaurant, and leisure accommodation expenses that might have been left in Taiwan also flow overseas. On the other hand, as TSMC and related supply chain talent move to the United States and Southeast Asia for work, some high-income populations and family consumption also move out of the country. These groups were once the main customers of five-star hotels, high-end restaurants, or villas. Now, they may not necessarily return to Taiwan to consume during holidays like the Dragon Boat Festival and Mid-Autumn Festival, further affecting the demand for high-end dining and accommodation. From the group's meat supply end order situation, Chao Jing-lun pointed out that the demand for five-star hotels has recently decreased by nearly 10%. In contrast, supermarkets, convenience stores, catering, and chain affordable dining channels have relatively stable overall demand. However, Chao Jing-lun's so-called 'decrease of nearly 10%' is a market observation made by the Yang Qin Group based on customer demand at the meat supply end, not the official statistics of the overall performance of tourist hotels or accommodation facilities. Contrasting with the cooling of high-end dining is the rigid demand for daily affordable meals. Chao Jing-lun stated that the group's recent supply of chicken main dishes for high-speed rail routes and PX Mart hot bento has received a very enthusiastic response, with continuous growth in demand for products such as original block thighs and breast meat. 'Consumers are not buying it because they can't afford it, but they are going to hot bento to eat different flavors.' Chao Jing-lun pointed out that consumers may not be willing to bear the expenses of high-end restaurants but are willing to add 10 or 20 yuan to the price of general bento to get larger original meat, better side dishes, or slightly upgraded meals. He believes that this phenomenon is not the complete disappearance of consumption but a change in the structure of spending. Part of the high-priced, experience-type consumption is diverted to overseas travel, while the food and beverage spending left in the country shifts to daily meals that are affordable and have a small sense of upgrade. 'To a certain extent, this is consumption downgrade.' Although the catering market shows a trend of high-end cooling and low-end hot sales, Chao Jing-lun believes that catering is ultimately a 'daily food' that consumers face every day, and its demand is different from the stock market and short-term hot topics. It cannot pursue growth at a bubble-like speed. 'Doing catering cannot be a bubble because it is a rigid demand.' Chao Jing-lun said that products that need to be eaten every day can be moderately adjusted according to the market, but they cannot chase topics and let the original taste, price, situation, and brand positioning completely disappear. He pointed out that catering brands can increase consumers' freshness through collaborations, new products, and digital tools, but the basic products, supply chain, and franchisee profit model must remain stable. Otherwise, when the market trend retreats, the costs and operational risks accumulated from rapid expansion may surface. In terms of overseas layout, Chao Jing-lun said that Fried Chicken Big Lion maintains stable development in markets such as Singapore, Malaysia, and Indonesia. Currently, there are about 36 stores in Indonesia, with the opportunity to open two more this year, challenging 38 stores for the year. The Singapore and East Malaysia markets maintain stable operations, but due to regional economic conditions, changes in the US dollar, and weakening consumer power, the pace of expansion will be more cautious. Chao Jing-lun pointed out that although fried chicken can be used as a regular meal in the Southeast Asian market, the product unit price is relatively positioned in the mid-to-high range. When consumer spending tends to be conservative, the brand must adjust the pace of expansion and cannot take the number of stores as the only goal. Fire and administrative procedures are more complex than expected, and the US flagship store is delayed to August-September. Regarding the market's focus on the US layout, the first store of Fried Chicken Big Lion will be located in Virginia, but the opening time has been delayed again due to the impact of landlord coordination, fire inspection, and administrative procedures. Chao Jing-lun said that the relevant regulations and administrative procedures in the US are relatively complex, from store preparation, fire to related permits, the overall operation time may take 8 to 10 months, and it is currently estimated that the first store can be expected to open in August or September. He frankly said that the population structure, food culture, consumption habits, and business district conditions in various places in the United States are very different, and the portion size, price, and product combination of meals cannot be directly copied from the Taiwanese model. In addition to whether the agent has the ability to operate, logistics and distribution, and product localization are also key to whether long-term expansion is possible. Not only relying on the homesickness of Taiwanese people, local customer recognition is the key. With TSMC and Taiwan's supply chain moving into Arizona, there are indeed many Taiwanese employees and family members in places like Phoenix who look forward to McDonald's or Fried Chicken Big Lion entering the local market. However, Chao Jing-lun emphasized that overseas catering brands cannot only rely on the homesickness of Taiwanese expatriates and technology industry employees, otherwise the market scale and growth space will be limited. 'We go to do business overseas, not just to make money from Taiwanese people.' He said that Taiwanese brands want to operate in the United States for the long term and must gain the recognition of local consumers and adjust products and business district strategies for different groups, rather than relying on the short-term needs of Taiwanese people missing their hometown flavors. Taking the US market as an example, different states, or even within the same state, may have different groups such as whites, Mexicans, Asians, and others; street stores, supermarket stores, or drive-thru stores also need different locations, products, and logistics configurations. The first store must be profitable, then replicate from the second to the fourth store. Facing the complexity of the US market, Chao Jing-lun pointed out that Yang Qin is not in a hurry to set a time table for rapid and large-scale expansion but requires agents to first let the first store establish a stable profit model, then open the second store, and then replicate from two stores to four stores. The same logic also applies to agent regions. After a region is successful, it will enter the second region, rather than requiring agents to open many stores first, invest money, and then verify whether the model is feasible based on market results. 'We are not opening stores just to open stores, but we are opening stores to succeed in opening stores.' Chao Jing-lun emphasized that franchisees make money, and the company will move to the next step; overseas agents can make a profit, and they will open the next store or expand the next region. He used the traditional analogy of rice planting, which seems to be working while retreating, but in reality, the entire field is continuously completed, 'slow is fast.' In the environment of domestic consumption downgrade and intensified changes in overseas markets, Yang Qin's strategy has shifted from simply pursuing the speed of store expansion to affordable rigid demand, single-store profitability, and sustainable replicable operating models.