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  • Tips on starting a business

    Tips on starting a business

    The fun really begins now, as there is so much to learn about starting a new business. There is a lot of preparation and risk involved in starting out in a new venture. There are a lot of options available for you to look into, as you start your venture as an entrepreneur. I must admit it takes a lot of courage and want, to succeed and to create a viable business. There is no point in creating a business if you are not prepared to give it your all. The risks involved are far too high, to take a step into a new business venture light heartedly. I’m not trying to scare you but merely emphasize, what to expect if you decide to take on the challenge.

    Create a Business Plan

    It is imperative that you create a business plan before you start your venture. A business plan is like a road map to your success. You will find that there are many different areas that you should have a firm understanding of. A few examples of this include a Marketing plan, Equipment list, suppliers list and a list of processes for your daily operations. These are just a few areas you should be looking into and there is a lot more preparation required for a successful business. There is a number of ways you can set out your business plan there issoftware and templates available. The main thing is that you have one!

    Don’t Over Capitalize

    The best way to start a business is to start out small and dip your toe in so to speak. The advantages to testing your market will ensure you do not end up in a hole, with nothing to show. There is a lot of successful businesses. Which have started out with a very minimal investment a great product and a great business strategy.

    Understand the Nature of What you are Selling

    It is a good idea to enter an area of business where you have experience. The obvious upside to entering a business that you know a lot about is the rate of failure will be lower. Imagine for a second that you have a great idea started investing your time and hard earned savings, to find that you had no idea what you were doing . You may not be able to sustain the business based on your turnover. A lot of your learning would be now coming from on the job learning, which can be quite costly.

    If you had experience already around certain areas of the business you were starting, you would eliminate a large part of the risk. So in basic terms the more you know in advance to your commencement, obviously the less risk involved. Business is all about eliminating the levels of risk associated with it. There will always be risk but you must manage it efficiently to succeed.

    Market your Business Effectively

    Your business obviously must be marketed to your audience. Now there is no point marketing to an audience that is not receptive to your product. For instances if your selling men’s business shoes, you want to market to business men. The chances of selling those men’s business shoes to truck drivers, will be quite minimal. I hope you understand the point I am trying to outline.

    Once you have indentified your market, then it’s time to test different ways of marketing. Most of the best entrepreneurs try small efforts, in different areas tweaking to maximize results. Marketing is a complete topic on its own and needs to be looked at very thoroughly if you are to succeed. In saying this there are some very cost effective ways, available to start marketing your business.

    Read as Much Literature as you Can

    If you are dedicated to your success and follow your dreams then you will succeed. We are in the information age and can access a great wealth of information from basically anywhere. The best part is a lot of this information is FREE. We must constantly learn from investing time, in advancing our knowledge to succeed. Remember that Rome wasn’t built in a day and that you don’t need to go it alone. Many people have already made the mistakes, you just need to learn from them and tailor it to your own situation.

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  • PRG China expanding in confidence

    PRG China expanding in confidence

    Despite economic growth cooling, Parkson Retail Group (PRG China) is confident about its shopping mall opening this month in Qingdao.

    This confidence is underlined by an Asian Development Bank prediction that the Chinese economy will grow 6.5 per cent this year, with retail sales expanding 10.6 per cent in the first two months of this year.

    A unit of Parkson Holdings in Malaysia, PRG has 57 department stores in China, with one already in Qingdao. Its latest store is in the new Lion Mall, which the group has acquired for nearly RM1 billion (US$258 million) from Shanghai Industrial Qingdao Development via its indirect unit Qingdao Lion Plaza Retail Management.

    For the financial year ended June 30 last, the group’s China stores contributed about 70 per cent of Parkson Holdings’ revenue and profits.

    Parkson’s first store in Qingdao opened in 1998, its brand equity providing the platform for the group to expand its market share and strengthen its foothold in the fast-growing market. Lion Mall will offer a fully integrated shopping experience, with Parkson and Foodpark as anchor tenants. There will be cinemas, fast-fashion brands, international cosmetics and accessories, F&B, entertainment and other amenities.

    In the Laoshan district of Qingdao, a new financial and commercial hub, the mall is part of a fully integrated development known as the Beer City Project. It has a total gross floor area of about 230,000 sqm, of which about 130,000 sqm are for retail. There will be parking for 2000 cars.

    An exit gate is planned as a direct link to the M2 subway line, which is under construction and will come into service next year.

    On the group’s future plans, a spokesperson says a Lion Mall Phnom Penh in Cambodia is being developed, with the foundation works almost complete.

    “Another development is Parkson City Centre in Phnom Penh, where Parkson has taken a lease of 36,500 sqm and will open the first Parkson department store in Cambodia with sub-tenants in the fourth quarter of this year.”

    Parkson City Centre will include Golden Screen Cinema, making its debut in Cambodia, and Giant Supermarket’s second store.

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  • Tesco result improved significantly

    Tesco result improved significantly

    Tesco’s statutory profit before tax improved from a £6.3 billion loss last year back into positive territory of £162 million as the impact of a deep write-down in the value of its stores last year eased off and it developed promising sales momentum and reduced its operating cost base.

    Although the full year Tesco result showed that core UK like-for-like sales were still negative, its performance has improved significantly. Like-for-likes grew 0.9 per cent during its fourth quarter, following on from a 1.3 per cent rise over Christmas.

    Having suffered persistently at the hands of discounters Aldi and Lidl, customers have responded well to its fight back and aside from Sainsbury’s, it is now firmly outperforming Morrisons and especially Asda.

    Over the last 18 months Tesco has reduced its food range by 18 per cent allowing it to improve availability, and developed its in-store service by introducing 9000 new roles. It has also cut the price of an average weekly shop by 3 per cent over the last year and has largely moved away from heavy promotions towards a more relevant everyday low price strategy.

    Since its year end it has also simplified its price match scheme and launched a new Farm themed entry-level own label. Furthermore, 60 unprofitable stores were closed during the year, which along with a 25 per cent cut in its management team benefitted operating profits.

    Elsewhere Eire like-for-likes turned positive in the fourth quarter for the first time since 2012, in reaction to price investments. European full year like-for-like sales improved 3.5 per cent amid a greater focus on price and fresh food and a consolidation of regional management teams.

    Asian full year like-for-likes stabilised at 0.6 per cent following a marked improvement over the fourth quarter, helped by the sale of the Korean Homeplus business in September which was clearly not profitable. The sale of Homeplus helped generate cash and reduced group debt.

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  • Warburg Pincus takes Reiss stake

    Warburg Pincus takes Reiss stake

    A majority stake in UK luxury fashion retailer Reiss has been bought by private equity company Warburg Pincus.

    The transaction values the brand, which started out as a menswear store in 1971, at £230 million.

    Reiss has two stores in Hong Kong and four in Manila, Philippines; its only stores to date in Asia. The Hong Kong stores are located in IFC Mall and Ocean terminal, Harbour City. It also sells online, on its own website and on Asos. It has 160 stores globally.

    The sale ends more than six months of talks between founder David Reiss and several potential investors, one of whom was revealed as Permira, which is the private equity investor in Dr Martens.

    According to UK media, Reiss achieved total sales of £146 million in the year to January 31, up substantially from the £111 million of the previous year. Pre-tax profits soared from £3.6 million in 2013 to £10 million during 2014.

    Warburg Pincus MD Paul Best says he plans to expand the brand’s presence internationally.

    “The business has built an enviable position in its core UK market, with a broad and loyal customer base. We believe there is significant opportunity to build on this success,” he said in a statement.

    Reiss, who will remain as chairman and CEO, says the deal will allow the business to grow into a “truly global fashion brand”.

    “We have built a great business providing our customers with timeless luxury at affordable prices.”

    Reiss and Best said the company’s expansion strategy would be focused on the US, Canada, Asia and Australia.

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  • Robi launches Wi-Fi in buses and taxis

    Robi launches Wi-Fi in buses and taxis

    Robi Axiata has introduced Wi-Fi services in 100 buses and 100 taxis in Bangladesh as part of a government-led project to improve internet availability in the nation.

    The network services will be available for all users with Wi-Fi enabled devices. Robi will offer its customers purchasing data packs of at least 1GB free Wi-Fi quota to use on the network, and plans to introduce bundles with Wi-Fi quotas in the near future.

    Robi has formed partnerships with local broadband provider Qubee and technology services providers AccessTel, and Aamra to deploy and maintain the hotspots. The rollout on buses and taxis is being conducted in partnership with e-commerce and e-business aggregator Coalesce.

    Over the next six months, the Wi-Fi project will be extended to a total of 500 restaurants and cafes, 100 educational institutes, 10 public places, 350 buses, taxis and trains, as well as airport and rail stations.

    Robi is partnering with the government on a project to realize the vision of a Digital Bangladesh, and improving internet connectivity in the nation is a key component of this initiative.

    The move comes soon after Singaporean operator M1 and the nation’s Infocomm Development Authority commenced a trial of their own Wi-Fi service for public buses operated by Singapore’s main public transport operator SMRT.

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  • Hong Kong and Macau drag down Prada profits

    Hong Kong and Macau drag down Prada profits

    Difficult times on Asian markets, especially in Hong Kong and Macau with lower local demand and fewer tourists, have impacted Prada profits.

    “At the same time, social and political tensions worldwide further contributed to a general decrease in willingness to consume and in tourist flows,” the Milan-based group says in its annual results.

    The company plans to offset new shop openings with selective closures this year and next in an effort to shield profit margins from weaker demand, according to Business Insider.
    Prada profits fell by a larger-than-expected 28 per cent in the 12 months to January 31 – to 14 per cent of revenue, down from 20 per cent the previous year.

    After listing on the Hong Kong bourse in 2011, the group expanded its retail outlets in the territory. Now it has been hit by China’s economic slowdown as well as a crackdown on extravagant gift-giving. Similarly affected, luxury goods industry leader LVMH has just posted first-quarter sales below forecasts.

    CFO Alessandra Cozzani, who took over the role in February after the sudden resignation of Donatello Galli, says Prada will balance new openings with closures and work to keep operating expenses flat.

    “The retail network will remain the same for sure in 2016 and probably also 2017. We’re working on increasing the productivity of stores.”

    Prada’s directly operated stores (DOS) increased from 594 to 618 in the 12 months to January 31.

    Head of strategic marketing Stefano Cantino says the group will bet on eCommerce with the aim of doubling revenues over the next two years. It will start working with partners such as Yoox Net-A-Porter to sell its products on multi-brand e-shops.

    Digital and marketing initiatives will also be used to strengthen relationships with clients.
    Meanwhile, the Asia Pacific is still the group’s leading market, generating new sales of €1080 million (US$1.23 billion) during the year. However, net sales fell by 4.4 per cent at current exchange rates and by 16.1 per cent at constant exchange rates.

    In Japan, where there was a strong flow of tourists, the brand ended the year with net sales of €403.7 million, a 10.7 per cent increase.

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  • Gemalto launches applet for UnionPay wearables

    Gemalto launches applet for UnionPay wearables

    Gemalto has launched a secure element based applet for smart wearables developed by China UnionPay (CUP).

    CUP had launched smart wearables with embedded secure elements based payment applications last year.

    The payment applet runs on the secure element, to provide online and offline payment capabilities on wearables.

    This is expected to eliminate the need for different card vendors to develop their own versions, simplifying deployment of payment applications on a range of secure elements and improving time to market.

    “Intelligent NFC-based wearable devices are set to disrupt our lives much beyond contactless payments – from user access and authentication to smart homes and cities, the possibilities are simply endless,” said Suzanne Tong-Li, president for Greater China and Korea at Gemalto.

    “With extensive experience in NFC ecosystem and end-to-end security, we support CUP to not only simplify and speed up this launch for maximum outreach, but also provide consulting for next-generation solutions.”

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  • Garuda Indonesia to receive 14 Airbus A330neo jets

    Garuda Indonesia to receive 14 Airbus A330neo jets

    Garuda Indonesia has confirmed an order with Airbus for the purchase of 14 A330-900neo, the new re-engined version of the best-selling A330 widebody airliner, to support the company’s growth and business expansion in the future.

    The deal was signed at a ceremony in London in the presence of the President of Indonesia, His Excellency Joko Widodo and British Prime Minister, the Rt. Hon. David Cameron MP.

    Garuda Indonesia plans to use the A330neo to develop its medium and long haul network, with the aircraft offering cutting edge technology along with more efficient operations. The order replaces and extends an existing order for seven A330-300 aircraft, and the A330neo will be delivered from 2019 onwards.

    “We are pleased to announce that we continue our long-standing relationship with Airbus. Both Garuda Indonesia and Airbus fully understand the aim of the deal as a long-term strategy to win the global challenge,” said Arif Wibowo, CEO of Garuda Indonesia.

    Arif explained, “The A330neo represents a more-efficient future for Garuda Indonesia. This order restructuring is believed to support our continued commitment to deliver the most modern, comfortable and excellent air travel service to all customers as well as to strengthen the sustained positive growth and business expansion of the company.

    “Furthermore, we are confident that this latest technology aircraft will support us to compete better in the industry.”

    Prime Minister David Cameron said: “This deal underlines the increasing importance of our ties with Indonesia – a fast growing economy and set to become the seventh largest in the world by 2030.

    “We are the fifth biggest investor in Indonesia and our relationship has more untapped potential. We want to encourage more British businesses to seize on these opportunities and we will continue to support them by banging the drum for British skills and expertise.”
    Airbus Chief Operating Officer Tom Williams said: “We are delighted to welcome Garuda Indonesia as a new customer for the A330neo.

    “The A330neo will bring a range of benefits from unbeatable operating economics including significant reductions in fuel consumption, lower maintenance costs and extended range capability. The aircraft will have Airbus’ all new Airspace cabin which will ensure the A330 continues to be a benchmark for passengers and airlines alike.”

    The deal is the latest milestone in a long standing partnership dating back more than 30 years, when the airline took delivery of its first Airbus A300.

    The A330-800neo and the A330-900neo are two new members of the Airbus Widebody Family with first deliveries scheduled to start in Q4 2017. The A330neo incorporates latest generation Rolls-Royce Trent 7000 engines, aerodynamic enhancements and new cabin features. Benefitting from the unbeatable economics, versatility and high reliability of the A330, the A330neo reduces fuel consumption by 14% per seat, making it the most cost efficient, long range widebody aircraft on the market.

    In addition to greater fuel savings, A330neo operators will also benefit from a range increase of up to 400 nautical miles and all the operational commonality advantages of the Airbus Family.

  • South Tea exporters to double volumes to Malaysia, Indonesia

    South Tea exporters to double volumes to Malaysia, Indonesia

    Tea exporters from south are exploring opportunities to double their exports to Malaysia and Indonesia by joining hands with the tea industry in those countries.

    The exporters’ organisation has signed an MoU with trade representatives in Malaysia to double exports and to create a brand which will cater both domestic and export markets.

    With Indonesian industry the exporters are exploring to see whether they can create a new blended products suitable for that country.

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  • Garuda Indonesia Denpasar Aims for 10% Growth

    Garuda Indonesia Denpasar Aims for 10% Growth

    PT Garuda Indonesia (Persero) Tbk. Denpasar Branch Office has targeted a 10 percent growth this year compared to 2015.

    Micky Irfandi, General Manager of Garuda Indonesia Denpasar Branch Office, said he is optimistic of achieving the target through a wide range of efforts, though he admitted that Q1 2016 sales has yet to show any positive signal.

    “In Q1 2016, we actually saw a decrease of 14 percent compared to the same period last year. One of the factor that affected the decrease was unstable global economy, which has made people and companies or agencies to be more efficient,” Micky said, Monday, April 18, 2016.

    Based on the data of Bali Statistic Agency, the number international departure from I Gusti Ngurah Rai airport in February 2016 was 2,423 flight departures. The figure was down by 2.73 from previous month of 2,491 flights.

    For domestic flights, the number of aircraft departed from I Gusti Ngurah Rai airport in February 2016 was 3,067 flight departures, or fell by 7.15 percent compared to the previous month of 3,303 flight departures.

    Moreover, Micky went on, another factor which has affected the growth figure was fuel price decrease which has forced his company to readjust ticket prices.

    “Fuel price decrease has resulted in lower ticket prices and it has reduced our revenue compared to previous figure,” Micky said.

    Garuda continues to launch various promotional efforts to attract foreigners to travel to Bali in line with the company’s support for the government program of 20 foreign tourist visits by 2019.

    “We continue to carry out various efforts to support the government programs also by opening new routes recently and increasing the number of seats for Denpasar-Hong Kong route. The route was previously using 737-800 aircraft with a capacity of 162 seats; we replaced it with A333 aircraft with 251 seats and adding 89 seats,” he explained.

    Micky added that Garuda is also mulling on increasing flight frequency of Denpasar-Beijing and Denpasar-Shanghai routes from three flights per week to four or five flights.

  • Garuda Indonesia set to achieve its cargo transport target

    Garuda Indonesia set to achieve its cargo transport target

    The Indonesia’s flag carrier, Garuda Indonesia, said it is optimistic cargo transport service would contribute 20 percent to its income this year.

    “I think the target could be achieved. For that purpose we have named a director in charge of cargo transport,” Garuda Indonesia’s commercial director, Toni Soetirto, said here on Tuesday.

    The target has been set by the president director of the airline M Arif Wibowo.

    Soetirto said cargo transport markets in Indonesia include all destination areas in the country. The main cargo transport markets abroad include Middle East, China, Japan and South Korea.

    Garuda Indonesia hopes to raise its income from cargo transport to US$1 billion from around US$275 million a year at present.

    In order to reach the target , the airline hopes to cooperate with other companies in the form of “joint operation” or joint venture such as with state-owned post office company PT Pos Indonesia and international companies.

    The largest international cargo markets are Shanghai in China, Japan and Europe that could reach up to 13-15 tons per day.

    To be in charge of cargo transport, Garuda Indonesia in a shareholder meeting decided to form a new directorate under Sigit Muhartono.

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  • LFC sponsor Garuda in 14-plane order with Airbus

    LFC sponsor Garuda in 14-plane order with Airbus

    Liverpool FC training kit sponsor Garuda Indonesia has confirmed an order with Airbus for 14 A330-900 aircraft.

    The planes, the new re-engined version of the best-selling A330 widebody airliner, will support growth and business expansion for the Indonesian airline.

    The deal was signed at a ceremony in London in the presence of the President of Indonesia, His Excellency Joko Widodo, and British Prime Minister, David Cameron MP.

    Garuda Indonesia plans to use the aircraft to develop its medium and long haul network, with the planes offering cutting edge technology along with more efficient operations.

    Airbus employs more than 6,000 staff at its Broughton plant, near Chester, making wings for all its commercial aircraft .

    The order replaces and extends an existing order for seven A330-300 aircraft, and the A330neo (new engine option) will be delivered from 2019 onwards.

    “We are pleased to announce that we continue our long-standing relationship with Airbus. Both Garuda Indonesia and Airbus fully understand the aim of the deal as a long-term strategy to win the global challenge,” said Arif Wibowo, chief executive of Garuda Indonesia.

    He explained, “The A330neo represents a more-efficient future for Garuda Indonesia. This order restructuring is believed to support our continued commitment to deliver the most modern, comfortable and excellent air travel service to all customers as well as to strengthen the sustained positive growth and business expansion of the company.

    “Furthermore, we are confident that this latest technology aircraft will support us to compete better in the industry.”

    Prime Minister David Cameron said: “This deal underlines the increasing importance of our ties with Indonesia – a fast growing economy and set to become the seventh largest in the world by 2030.

    “We are the fifth biggest investor in Indonesia and our relationship has more untapped potential. We want to encourage more British businesses to seize on these opportunities and we will continue to support them by banging the drum for British skills and expertise.”

    Airbus chief operating officer Tom Williams said: “We are delighted to welcome Garuda Indonesia as a new customer for the A330neo.

    “The A330neo will bring a range of benefits from unbeatable operating economics including significant reductions in fuel consumption, lower maintenance costs and extended range capability.

    “The aircraft will have Airbus’ all new Airspace cabin which will ensure the A330 continues to be a benchmark for passengers and airlines alike.”

    The deal is the latest milestone in a long-standing partnership dating back more than 30 years, when the airline took delivery of its first Airbus A300.

    The A330-800neo and the A330-900neo are two new members of the Airbus widebody family with first deliveries scheduled to start in the fourth quarter of 2017.

    The A330neo incorporates latest generation Rolls-Royce Trent 7000 engines, aerodynamic enhancements and new cabin features.

    It reduces fuel consumption by 14% per seat, making it the most cost-efficient, long range widebody aircraft on the market.

    Garuda Indonesia is already rated a five star airline in terms of comfort and passenger services.

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  • Bag charge to reduce Indonesia’s plastic waste

    Bag charge to reduce Indonesia’s plastic waste

    The government has made it mandatory for retail businesses across Indonesia to charge customers 1.5 cents for each plastic bag they use.

    Supermarkets and vendors in cities across Indonesia have begun charging customers for plastic bags in a bid to reduce waste.

    The government has made it mandatory for retail businesses across Indonesia to charge customers 1.5 cents for each plastic bag they use.

    According to the Environment and Forestry Ministry, Indonesians consume up to a million plastic bags every minute.

    Indonesia is ranked the world’s second largest plastic waste producer, using more than 187 million tons each year.

    Watch the video to get more details over plastic wastw problem in Indonesia.

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  • Technology drives Timberland sales

    Technology drives Timberland sales

    In-store technology is helping brick-and-mortar stores like Timberland retain their relevance in a fast-growing online world according to leading US retailer VF Corporation (VFC).

    Todd Starcevich, Americas VP of direct-to-consumer with VFC, says his company is focused on growing its business at retail level and points to research from the International Council of Shopping Centers (ISCS) reminding etailers that brick-and-mortar stores continue to deliver the bulk of today’s total industry retail sales.

    VFC, which owns high-profile brands including Timberland, 7 For All Mankind and The North Face, achieves 85 per cent of its sales in its direct-to-consumer business through its onground stores.

    “We are building our sales by focusing on building our retail technology foundation while simultaneously experimenting and testing new technologies and experiences in-store,” said Starcevich.

    Consumer insights are woven into every aspect of VFC’s retail business. During testing periods, retail teams watch how consumers engage with various technology and process adjustments.

    In one recent experiment, Timberland deployed tablets to customers at its Herald Square store in New York City, allowing them to engage with every product in the store without having to sign up, download an app or initiate registration.

    As part of its Connected Store, which was introduced at the last National Retail Federation trade show, shoppers receive a guided Timberland sales experience with rich digital product information, styling options and recommendations for footwear, apparel and accessories. They can then choose to opt in via email to receive personalised content related to their store visit.

    Timberland’s Connected Store also offers “tap walls” featuring exclusive merchandise. Nimbus, CloudTags’ in-store recommendation engine, allows customers to shop from an extended range of styles, colours and sizing based on their location and interests.

    Meanwhile, The North Face and 7 For All Mankind brands have partnered with California-based Jaunt on innovative virtual-reality experiences. Shoppers at select The North Face stores could experience remote hiking or base jumping.

    Also partnering with Jaunt, 7 For All Mankind offered its customers Visions of California, filmed against the backdrop of a Paris chateau using 360-degree, stereoscopic 3D cameras and advanced 3D sound-field microphones. To amplify the content, Elle, the first fashion brand to collaborate with Jaunt, will promote the content across its digital platforms.

    Both The North Face’s and 7 For All Mankind’s virtual experiences are available via apps.
    VFC’s direct-to-consumer business accounts for about 30 per cent of its overall revenue. It includes 1520 retail stores and eCommerce sites.

  • McDonald’s Asia to sell 2800 restaurants

    McDonald’s Asia to sell 2800 restaurants

    McDonald’s Asia is preparing to sell some 2800 restaurants across Asia as it introduces a new business model in its fastest growing major market.

    And Reuters has named frontrunning investors in what looks to be a spin-off business in much the same nature as Yum! Brands is selling off its Chinese KFC, PIzza Hut and Taco Bell operation.

    Early contenders as partners with McDonald’s US include state-backed China Resources and private equity investors Bain Capital, TPG Capital, Baring Private Equity Asia and MBK Partners. China Resources already has street cred in the food sector, operating Pacific Coffee chains in Hong Kong, Macau, Singapore and China.

    McDonald’s is planning to create a new Asian business which would own restaurants as master franchisee, using local market knowledge and capital to expand networks in respective markets.

    Operations in China, Hong Kong, Macau and South Korea would be rolled into the new entity, although it is highly likely separate businesses could be created for each market – one for China, one for Hong Kong-Macau and another for Korea.

    McDonald’s has a stand-alone, listed business in Tokyo which encountered huge market problems several years ago and last year lost US$310 million after a major cull of its network. The company is trying to sell down its stake in that business from 49.99 per cent to 20 per cent.

    Inside Retail Hong Kong expects that McDonald’s Asia would likely be funded by a cashed-up investment partner for about five years before potentially being floated, most likely in Hong Kong.

    A fortnight ago, McDonald’s Chicago-based CEO Steve Easterbrook revealed plans to open 1500 new stores across China, Hong Kong and Korea within five years – 1300 of those in Mainland China. Globally, the company plans for 95 per cent of its restaurants to ultimately be franchised.

    In China’s mainland, McDonald’s already operates some 2200 restaurants – its new target is 3500.

    Easterbrook says strategic partners could “add value and unlock growth potential in key markets” in Asia.

    “This will allow McDonald’s to accelerate our growth and scale faster across diverse markets placing us closer to our customers and the communities we serve,” he said on March 31.

    Reuters quotes sources revealing McDonald’s has engaged Morgan Stanley to run the sale of the restaurants in China, Hong Kong and South Korea, with a formal, public sale process to be launched in mid-May.

    The final business model is subject to negotiations with potential buyers, but McDonald’s expects a one-time franchise payment and ongoing royalties based on sales – the typical industry rate running between 3 per cent and 5 per cent. Capital investment required to roll out new stores would be the responsibility of the franchisee.

    Reuters said McDonald’s declined further comment beyond its March 31 statement from Easterbrook and the private equity companies named, China Resources and Morgan Stanley all also refused to comment.

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