Jumbo scales back ambitions for China expansion
Singaporean upmarket seafood restaurant chain Jumbo Group appears to have U-turned on its targeted expansion in China to focus on its home market.
Jumbo permanently closed a high-profile branch in Shanghai’s Raffles City mall during the COVID-19 lockdown. The firm still operates three Jumbo Seafood Restaurant outlets in Shanghai, as well as one in Beijing and Xi’an, and two in Fuzhou. The firm also operates other brands in China and across Asia. In 2018, it had announced an expansion into China’s smaller regional cities in recent years to tap into increased growth outside the country’s first-tier cities.
The Raffles City closure marks a retreat for the Singaporean seafood restaurant, which at its peak in 2017 claimed it served up 1.6 tons of crab per day at its three outlets in Shanghai, and featured premium seafood cooked using traditional recipes, such as one-kilo Alaskan crab served with hot peppers.
Revenue at the company declined by 36.5 percent in 2020 to SGD 97.6 million (USD 74.1 million, EUR 60.51 million) and the company posted its first loss since listing on the Singapore Exchange in 2015. The company also took a one-off impairment loss of SGD 3.7 million (USD 2.81 million EUR 2.29 million), mainly on property, plant, and equipment for those non-performing outlets, including the Jumbo Seafood outlet in Xi’an.
Jumbo, also known by its Mandarin name Zhen Bao Seafood, targeted as its customers base wealthy Shanghai diners from office locations, but also declared in 2017 it wanted to open in luxury hotels. But with both office work and tourism scaled back dramatically as a result of the COVID-19 pandemic, the chain has announced a pivot to develop products for home consumption. In the company’s recently published annual report, Jumbo Chairman Tan Cher Liang laid out the new strategy.
"The group has... reviewed and pivoted our growth strategy to leverage on our strong brand presence to build a stronger foothold in our home country, Singapore, with a multiple pronged approach – new concepts and new product offerings, both organically and inorganically,” he said. “We will also continue to focus on managing our liquidity and optimize our costs.”
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