Wagas – How to launch a sandwich brand in China?

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Last week I attended a presentation  by Jackie Yun, co-founder of the pioneering Chinese sandwich brand, Wagas.  Jackie and co-founder, John Christensen, founded Wagas in 1999 and opened their first café in Shanghai in 2001, then entered into the bakery business with Baker & Spice in 2010.  Fast forward to 2016, Wagas will have 68 locations, including Shanghai, Beijing, Wuxi, Chengdu, Suzhou, Shenzhen, and more cities in Greater China.

Background of Jackie Yun, Cafe Connoisseur

Wagas

Those not familiar with the sandwich connoisseur’s story:  Jackie was born in New Guinea, living the majority of her life in Australia.  She found a love of cafés and entrepreneurship during her life after college, but felt she needed to get out of her comfort zone and experience the world in a new way.  So Jackie left the comforts of home and family to travel to China, with the aim of gaining independence and studying Chinese language.  Even though she is of Cantonese decent, she did not know any Chinese at that point, but planned to take a year and master the language.  During her time in China, she met her future business partner, Dane John Christensen.  As a foreigner in the 1990s China, John struggled to find a good sandwich in Shanghai,as a result he planned to open up a sandwich café based on his food industry experience.  However, he needed Jackie’s help to manage the café he envisioned so immediately offered her a partnership.Inside store

Entering the Chinese Sandwich Frontier

Introducing a sandwich café into China was no easy feat, with many stories along the way.  One that stood out was the reaction of seventy-year old Chinese man to the ‘famed’ turkey and cranberry sandwich.  For him, he had no idea how to eat it, and admitted he thought it was horrible!  Based on this honest feedback,  Jackie and John realized they needed to adjust their menu to appeal to the local consumers.  They did this by adding pastas (similar to noodles) and toasted sandwiches to their menu.  Toasted sandwiches due to a local view that cold foods are bad for digestion.

An important lesson for businesses or anyone in general from Jackie was to not impose your own culture on Chinese consumers, success is based on continual localization and adaption.

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Keys to Success in Chinese Market

  • Location is everything. Spending money on prime locations that are easily seen and accessible to customers –  is worth it.  As a result, Wagas has not needed to spend a single dollar on advertising.
  • Maintain quality. Wagas focuses highly on quality because in this day in China you can’t compete with prices alone.  High quality ensures reliability and dependability in the brand.  One of the ways Wagas does this is by not outsourcing, including their menu, food, store design, or graphic design.  Everything is from scratch.
  • Stay innovative. Wagas updates their menus and adds new recipes seasonally to stay fresh within the ever changing foodie culture in China.
  • Don’t impose your own culture. As mentioned, Wagas works not only to sell the great concept behind their cafés and bakeries but also to truly understand the Chinese culture.

Recently launched WeChat Royalty Program

In March of 2015, Wagas launched their WeChat Wagas Royalty Program (WRP), by just September they had gained 115,000 users and increased their business by a staggering 30%.app screenshot

The program is relatively simple:

  1. You can register by scanning their WeChat public account QR code and follow their page.  Then sign up for membership.
  2. To earn points:  order, scan My Virtual Card and pay- 1 point for every 1 RMB spent.  To spend points – download e-coupon in Members Rewards first using Pin Code, order, scan e-coupon and pay.
  3. There are three levels:  starting at White Level, then Orange Level and then Black Level based on point, and there are more rewards and gifts as you reach higher levels.

What’s Next for Wagas

The big next step for Wagas is to enter online delivery service as China becomes a more technology and digital oriented market.  The brand also plans to reach a goal of 98 stores by 2017 and expand their presence further in the Chinese market – including more 2nd-tier cities.

As of now, they also plan to stay privately owned and scalable through their consistent quality even as they continue to expand and grow.  Listening to Jackie explain her story and business was an incredible experience and Wagas stands out as a business that is ‘doing it right’ in China as they work not only to create a successful business but also focus on getting to know the local culture better every day.

About Author

Leah Basford

Leah is a researcher on the SMART@Resonance team. She originally hails from Centerville, Indiana, and as an avid foodie, Guangzhou naturally is the Chinese city she enjoys exploring the most.

1 Comment

  1. “Wagas focuses highly on quality because in this day in China you can’t compete with prices alone. High quality ensures reliability and dependability in the brand.”

    One wonders how that correlates to the recent social media scandal involving a rodent and a Wagas location in Peoples Square.

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