Traditional Chinese Cake Shop Koi Kei -- A Famous Macao Brand

Souvenir shops have an important place in Macao´s tourism industry. When talking about Macao´s local delicacies, people will think of jerky (dried strips meats), Chinese almond cake, peanut sweets and egg roll, and many different types of cake shops located around the old town and tourist areas. In fact, acccording to figures from the Macao Statistics and Census Service, in the second quarter of 2004, up to 27 per cent of tourists´ non-gaming expenditure was spent on "Chinese food, sweets, and other foodstuffs".

Well Received by Tourists
In recent years, Macao´s traditional Chinese cakes-shop sector has evolved from selling only a limited range of traditional Chinese products to a great variety of well-packaged delicacies. During holiday periods, one will find lots of tourists at the New Macao Maritime Terminal carrying bags from cake-shops filled with Macao-style pastries. The Koi Kei Cake Shop is one of the brands most popular with tourists.

When he visited the Koi Kei Cake Shop in August this year, Chief Executive Edmund Ho Hau Wah tried the famous Koi Kei Chinese almond cake. Praising its general manager, Leong Chan Kuong, Mr. Ho said, "(Koi Kei) uses better packaging and a great variety of products to attract customers, and it has grown rapidly in the cake-shop sector in recent years. Koi Kei sets a very good example of developing through competition."

Previously, Koi Kei was a street vendor. Mr. Leong moved from his cart to his first branch on Travessa do Matadouro in 1997. Now the firm has a total of 120 full-time staff and six branches in Macao, something that is considered large scale by Macao´s professionally managed Chinese cake-shop chains.

Mr. Leong told Macao Image, "I was greatly encouraged when the Chief Executive announced in 2002 that two more gaming concessions would be issued. I immediately bought three new branches as I believe that Macao will be more and more prosperous, drawing large mumbers of tourists in the next 10 years."

According to the Macao Statistics and Census Service, Macao´s gross domestic product grew 47.5 per cent in the second quarter of 2004. The number of tourists in July 2004 also rose 45.6 per cent over the same period last year.

Successful Market Positioning
Mr. Leong says, "Koi Kei Cake Shop registered at least 50 per cent annual growth in its revenue during three consecutive years. Presently, I believe that our jerky sales make up more than half of the market. We produce 75,000 Chinese almond cakes everyday, we are the number-one in our industry. It is my conservative forecast that demand will grow by 50 per cent annually for the next couple of years. During peak seasons in the past few years, we could not meet the market demand even when our workers at the plant worked till 2:00 or 3:00 a.m.." "Therefore I decided to shift from traditional manual production to fully mechanised a couple of years ago. I spent four to five million Hong Kong dollars on developing new machines. It took us two years. I will invest another five to six million Hong Kong dollars on purchasing new machines," Mr. Leong said.

The marketing positioning of the Koi Kei Cake Shop has also been very successful. Although the packaging of their products is rather high-end, the products are sold at reasonable prices. The firm prefers selling higher quantities at a lower profit. For example, some of Koi Kei´s products are sold at just nearly half the price of those sold by other high-end cake shops.

Mr. Leong says, "the top priority of the food industry is taste. If the taste is good, customers will not only come back, but also recommend the products to their friends. Low pricing without good quality will just not do."

Expanding the Business
The Koi Kei Cake Shop is successful nowadays because they take every aspect of the operation very seriously, including quality control, packaging, pricing and counter services. In order to control quality, the Koi Kei Cake Shop often disposes products that do not meet the grade .

In order to cater to the increasing number of tourists coming to Macao, the Koi Kei Cake Shop has just bought a 10,000 square foot plant to engage in mechanised production, with assistance from IPIM. Mr Liang is very happy with IPIM´s service. "Without IPIM, we would not finish all the procedures for another couple of months."

Mr. Leong says that, apart from the new plant, his company applying for another 50,000 square foot plant at the Concordia Industrial Park on Coloane Island for future development. The firm plans to open two more branches, in addition to the current of six.

Mr. Leong also says, "we will strictly control product quality and develop new products. Then we will sell our products of best possible quality to Chinese communities worldwide." "Once, I was very happy to see two passengers carrying Koi Kei Cake Shop bags at the airport" Mr. Leong says with a smile on his face.

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