1.

0 Introduction

1.1 Background and History of Tealive

Tealive Malaysia aims to be the most loved beverage by revolutionizing the tea drinking culture in the
country (Coursehero 2019). The taste of freshly brewed beverage was first introduced to Malaysians
at 17 February 2017. The founder of Tealive is Bryan Loo, Chief Executive Officer of Loob Holding
Sdn.Bhd. Tealive previously was name as Chatime, which is a franchise from Taiwan. ‘Cha’ which
means tea in chinese, so Chatime is meaning of teatime. La Kaffa in Taiwan is the parent company of
Chatime. In the early of year 2017, La Kaffa decided to terminate agreement with Loob with the
reason of disagree about business direction of Chatime in Malaysia. Thus, Bryan Loo decided to start
Tealive business after the termination of agreement.

The meaning of Tealive are Tea=A drink, prepared hot or iced, using tea leaves as a base, and Live=
Being alive. Full of life, energy, activity. Tealive have their own slogan, which is ‘For the love of Tea’.
Tealive prepares hand-made beverages with freshly brewed tea prepared on site(Bhd L 2019). Tealive
are selling almost 70 types of drinks in the categories of tea, coffee, fruit juice, sparkling drinks and so
on. Granted, it included of hot drinks and cold drinks. One of the uniqueness of their product is drinks
serve with their handmade pearl, which is made by sweet potatoes.

Tealive have large distribution network within Malaysia, there are 300 outlets around every state in
Malaysia (Bhd L 2019)). Not only that, Tealive has enter into international market. It expanded
business into Vietnam (Yeoh J 2019) and China(The Star Online 2019).

Moreover, Tealive also cooperate with several E-commerce companies such as Touch-n-Go, Boost
(Malaysiafreebies 2019) , and GrabPay(Grab MY 2019). Customers can download all of these apps in
their mobile phone, and use these E-wallet to make purchase. Customers are allowed to enjoy
discount if they make purchase by using E-wallet. For example, (Tngdigital com my 2019) there was
a programme launched in 5th of May 2019 until 15th of June 2019 by Tealive and Touch-n-Go.
Customers can purchase a Tealive drink originally priced at RM6.50 with only RM2.50 by using
Touch-n-Go E-wallet. These kinds of activities are to welfare their customers and remain customers’
loyalty. Furthermore, Tealive cooperate with GrabFood (Grab MY 2019) and provide delivery
services to customers. This bring convenient to buyers as they just have to order their drinks through
Grab apps, and received their drinks without visit to Tealive physical shop.
1.2 Company’s vision and mission

Vision:

Tealive’s vision is to brew new life to tea by a team of passionate tea people. With this vision, it
motivated and led Tealive to grow rapidly within two years. Tealive is growing fast in Malaysia, the
number of branches has increased to 300 in all states in Malaysia https://www.tealive.com.my/outlets.
Meanwhile, the number of employees within the business also increase, which is large and close to
1500 employees (NAZLINA C 2019).

Mission:

Tealive have mission about ‘We are committed to take tea-brewing to new height. First in Malaysia,
then the world.’ All of the Tealive employees work hard to achieve the mission (Facebook 2019).
Obviously, it led Tealive toward succeed, as Tealive has expended business into other countries which
included Vietnam (Yeoh J 2019), and China (The Star Online 2019).
2.0 Analysis of three years company’s performance

Based on the statistic of (Emis 2019), it show that three years net sales revenue of Loob Holding. In
year2016, the net sales revenue is the highest compared with year2015 and year2017. The net sales
revenue of Loob Holding is dropping 13.88% from year2016 to year2017. Not only that, Loob
Holding is planning to increase the initial public offering (IPO) to RM300 millions (The Straits Times
2019). Loob Holding is having 300 Tealive outlets in Malaysia, 7 in Vietnam, 2 in China 1 in UK and
1 in Australia, they are planing to operate 1000 outlets at 15 different countries in the future ( Retail
News Asia 2019).

Based on the (Focus Malaysia 2019), it said that Tealive is selling almost two millions cup of drinks
per month and it will increasing double in year2020 and the price is RM6.50 per cup. Therefore, it
means that the profits is RM13 millions per month. Not only that, Tealive plans to hire 1200-1500
more workers to operate another 250 outlets by mid-2021 (The Star Online 2019). Tealive is
increasing the number of outlets, Tealive launched 300 th outlets in Malaysia in year2019
(Appendix2.0). Compared with Chatime in year2016, the sales growth of Tealive is increasing 20% in
first three months and the average sales growth is increasing 5% per month (www.thesundaily 2019).
3.0 Analysis of the company internationalization process

3.1 Identify the Countries the Company Currently Operates in or Doing Business in

Tealive is a Malaysia base franchising business since 2017 after terminate the contract with
Taiwanese firm La Kaffa which is the ingredient supplier from Chatime. After become a fully
domestic business, Loob Holding started to expand Tealive to foreign market in order to increase their
revenue. Tealive currently operate in more than one country which included China,UK and Vietnam.
Tealive having good performance in China due to Tealive able to launched ten corporate store in
China as their starting point and keep expand their business to all states in China. The CEO of Tealive
Bryan Loo also said that the investments in China are high and it would like to keep it as an asset-
light mode. By having high investment and large population in China, Tealive aimed to open up 500
outlets in China within three years (Malaymail 2019). Other than that, Tealive also expand their
business into Asean market which is Vietnam. Tealive also have good performance in Vietnam, their
first outlet is set up in Ho Chi Minh City which is the capital of Vietnam. Tealive have sevens outlets
in Vietnam currently and eyes to open up 20 outlets (Focus Malaysia 2019).

3.2 Entry Mode used to enter international country

3.2.1 Joint Venture Strategy

Joint Venture Strategy is a cooperative enterprise entered into by two or more business entities for the
purpose of a specific project or other business activity (The Balance Small Business 2019). Tealive is
one of the business of Loob Holding. Loob Holding has expanded Tealive business into UK, Vietnam
and China. When expansion of business into other countries, Loob Holding joint venture with local
organization of each country. In Vietnam, Loob Holding joint venture with Kinh Do Corporation, a
food and beverage conglomerate. The business ownership will share by both Loob Holding and Kinh
Do Corporation, and Loob Holding own 51% of ownership (Focus Malaysia 2019). Not only in
Vietnam, Loob Holding also joint venture with Zhejiang Boduo International Trade and Shanghai
Panfei International Trade in China (Tan J 2019). By using joint venture strategy with local
organization, it allow Tealive have more understanding about the preferences and needs of customers
in Vietnam and China. The development costs and risks also share with the joint venture partner.
Thus, joint venture is a less risky entry mode.
3.2.2 Franchising

Franchising is a continuing relationship in which an owner of products (franchisor) provides a

licensed privilege to the dealers (franchisees) to do business in return for franchising fees. In
Malaysia, Tealive is using franchising strategy for their business expansion. Franchisees buy the
franchise from franchisors to operate the franchise business, and franchisor will provide hands-on
training at outlets to every franchisees, monthly audit and quality services check for each outlets, as
well as always have live update through Tealive Business Management Tool (Bhd L 2019). By doing
so, the business are operating systematically and ensure standard level of every outlets. When enter
into international market, Tealive also using franchising strategy to expand businesses. Firstly, Tealive
joint venture with local organization to set up first Tealive in Vietnam and China as a master
franchise. Then, Tealive selling franchise to franchisees in return of franchising fees. 70% percent of
the outlets are owned by Loob Holding, and 30% are operated by franchisees. (Chia R 2019).

3.3 Global Strategies Adopted by The Company

Tealive is using localization strategy for their outlets in Vietnam; localization strategy is used to adapt
a product to a specific market. The reason that using localization instead of standardization is because
every market has different culture and preferences. For instance, Tealive only launch the durians
flavor in Malaysia market due to they know that Malaysian love durians. By using localization
strategy, it helps Tealive lower the failure rates due to the drinks is cater to the preferences of citizen
in Vietnam. The menu offered by Tealive in Vietnam includes some drinks are only available in
Vietnam and the drinks specially develop for the particular country. Tealive use localization strategy
for their coffee series in Vietnam, they have launch two new product that is not available in Malaysia
or others market. In the series, Tealive launch iced tea with Vietnamese coffee and Vietnamese coffee
which is sound familiar to the citizen in Vietnam (Appendix3.1). Not only that, Tealive also removed
the crafted tea series from their original menu and adds on new series into menu for Vietnam outlet.
Tealive added sea salt cheese series into their menu and this series are only available in Vietnam; this
is the series that develop for the Vietnam market (Appendix3.2).
4.0 Analysis of the company’s distinctive competencies and the products and services offered by
the company in the global market

4.1 Products or Services Offered by the Company in the Global Market

4.1.1 Products

Tealive is running their business with selling the distinctive bubble milk tea in the markets. Tealive
is selling various flavoured beverage in the markets, such as their top sellers milk tea, Matcha,
smoothies, cocoa, fruit tea, sparkling juice, coffee, and also traditional tea type as well (Bhd L 2019).
Furthermore, Tealive also offering some snacks food in their menu such as popcorn chicken,
sausages, cheesy potato pops and other as well (Appendix4.1). In additions, Tealive also expand their
business into Vietnam markets due to the reason that, the Vietnamese people love to eat and drink, this
is one of the culture of Vietnamese (Yeoh J 2019). Not only that, Tealive also expand their business
into globalize level, and Tealive also offering Iced Tea with Vietnamese Coffee in the menu which
they mix the iced tea and Vietnam Coffee that will fit with the Vietnamese’s taste and fulfil their
needs.

4.1.2 Services

Tealive is providing delivery services for customers. Tealive set the minimum order for online order
delivery services which the customer have to purchase RM20 excluding the delivery charges and
above then only entitled to the online delivery services. However, the customer can enjoy the delivery
services from Monday to Friday and from 11.30am until 8pm. Aside from that, Tealive delivery
services only available for certain areas in KL and Selangor (Tealive 2019). Due to the limited
coverage areas that Tealive is providing the delivery services, Tealive also collaborate with some
company that mainly provide food and beverage delivery services in order to overcome the area
coverage problem. Tealive collaborate with Foodpanda, so the customer can place the order through
Foodpanda website based on the prices that charged by (Foodpanda 2019). (Appendix 4.2)
4.2 The Stages of Industries the Company is Currently Competes in

In the products life cycle stages, Tealive is under the maturity stages. Tealive has become a brand
that familiar to every customer who prefer to consume tea beverage in Malaysia. The products has
reached the widespread acceptance in the market, and successfully building a positive strong brand
image in consumer’s mind.

During the maturity stage, Tealive business has become more competitive in the competing markets
due to rivalry of new competitor such as Tiger Sugar, The Alley, Tea Bubble Malaysia and so on
(Discover KL 2019).

So, brand differentiation and feature diversifications is emphasize to maintain, Tealive manage to
innovate more flavour of beverage such as adding durian flavor in the menu, and always follow the
trend which preferred by consumer in order to reach their expectations and fulfil its needs and wants
(Lee A 2019). Due to the high competition in the markets, Tealive manage to increase its outlet in the
markets, and signify its strong brand capability and stands out from its competitors. It has large
network distribution in whole Malaysia (The Edge Markets 2019). Moreover, Tealive also allow
consumers registered as membership, and able to track their consumer purchase’s behaviour in
order to fulfil the consumer’s needs and wants to maintain the customer loyalty.

4.3 Segmentation of the Market

4.3.1 Demographic Segmentation

Tealive segment their customer based on age and income level. Tealive is focusing on the individual
customer, working adults and students. The age range of Tealive customers is between 12 years old to
35 years old. The reason that Tealive is paying less attention to senior citizen is because their drinks
is contain sugar and mostly senior citizen might not able to take it due to health conditions. Moreover,
customer who is having medium income range between RM2500 to RM4000 will be the primary
market segment for Tealive.

4.3.2 Geographical Segmentation

Tealive is mainly focusing their business in the urban area and paying less attention to rural area.
Tealive having most outlets in Kuala Lumpur and Selangor which is the most prosperity state in
Malaysia (Bhd L 2019). Tealive also set up their business in crowded area such as LRT Station,
shopping mall and so on. Tealive has 300 outlets within all states in Malaysia and aims for 1000
outlets worldwide in next year (Chia R 2019). Tealive has expanded their business into foreign market
which included Vietnam and China, they also aims to expand their business to Japan, Thailand and
UK (Bhd L 2019).

4.4 Identification of the Company’s Target Customers

Based on the market segmentation, Tealive is targeting customers who are age between 12 years old
to 35 years old. This stage of customers can be students, teenagers and working adults, the reasons
that make Tealive target these customer segment is due to there is a trend of teenagers drinking bubble
tea in Malaysia. Tealive also targeting customer with the income level between RM2500 to RM4000,
the reason that Tealive is targeting low to medium income customers is due to the selling price of their
drinks is the lowest in the bubble tea market which only costs RM6.50 per cup. (Appendix4.3)
Therefore, everyone can be the potential customers to Tealive due to they sell their drinks in
affordable price. Not only that, Tealive also target all races in Malaysia with their Halal certificate
and all citizen will become their potential customers (www thesundaily my 2019).

4.5 Distinctive Competencies of the company that differentiates the company from others

4.5.1 Large Distribution Network

The first distinctive competency of Tealive is they have large distribution network within
Malaysia, Tealive have their business in all states in Malaysia and having 300 outlets within Malaysia
(Bhd L 2019). They have the highest amount of outlet in Malaysia bubble tea industry and having
more outlets than any competitor such as Chatime and Koi The. Tealive are able to reach customer
faster and easily by operating in more locations as it can brings convenience to customer and saving
their time for searching. They are having 114 outlets in Selangor area and 76 outlets in Kuala Lumpur,
this is due to these are the two most crowded area in Malaysia (Bhd L 2019). By having more outlets
within the market, it help Tealive gain the competitive advantage which is makes them become a well-
known brand of bubble tea in Malaysia. Besides, the large distribution network help Tealive build
brand awareness as well as improve their capabilities in the market.

4.5.2 Affordable Price

The second distinctive competency of Tealive is they having a good pricing strategy and credible
brand name in Malaysia compared to their competitor. Tealive using cost leadership strategy to
increase their market share in Malaysia and this helping them to gain competitive advantage in
pricing. By using this pricing strategy, Tealive has close to reach 2.5 million of customer within each
month in Malaysia (Focus Malaysia 2019). The prices offered by Tealive are started from RM6.5
which is the lowest prices in Malaysia bubble tea market (Tealive Menu Malaysia 2019). By offering
the lower prices than their competitor such as Xing Fu Tang and Koi, this able to help Tealive attract
potential customer in order to penetrate the market quickly.

4.5.3 Credible Brand Name

The third distinctive competency is credible brand name, it helps Tealive to cooperate with others
company in order to offer various types of promotion, one of it is Tealive announced that they’ll work
together with TNG Digital Sdn Bhd. By cooperate with TNG Company, Tealive offer great discounts
and promotions for customers who pay with the Touch ‘n Go eWallet for selected Tealive beverages
(Thestar com my 2019). During the promotion period, customers can purchase their favourite Tealive
beverages for only RM2.50, exclusively for those who pay with the Touch ‘n Go eWallet app (Chong
2019). This help Tealive to gain more market share due to it can sell their product at lower price and it
is convenience for customer to pay for it. Not only that, Tealive even cooperated with other Boost
which is a mobile payment app in Malaysia. During the cooperation period, Tealive offer buy 1 free 1
special deal for their customers (Malaysiafreebies com 2019).
5.0 Evaluate THREE (3) key factors that drive/motivate the company towards the
International/global expansion
There are three key factors that drive Tealive expand their business toward international, which is
expanding to the United Kingdom. The reason of expand Tealive to United Kingdom is because there
are some competitive advantages of the country that help Tealive to expand market, gain revenue,
enhance reputation, longer product lifespan, and so on (Business Trends and Insights 2019).

i. Local Demand Conditions

The first attribute of UK that drive Tealive to expand their business to the UK is the local demand
condition of the country. According to the research, the average UK citizen consumes nearly 2 kg of
tea per year, this shown UK citizen has a more preference to purchase in tea. (Hand L 2019). Not
only that, there are approximately 165 million cups of tea which consume daily, which is almost 60
billion per year in the UK , this shown UK citizens are willing to spend money in tea product as well
as the Tealive core product, bubble milk tea (Hartston W 2019). Not only that, the UK citizens are
more likely to drink tea rather than other types of drinks, and drinking tea has already become a
habit in their life. These evidences are shown the demand condition of UK citizens toward tea is
high, and it would create opportunity for Tealive to growth and ensure their product has the
demand and market to sell their product in the UK are efficient and effective.

ii. Firm Strategy, Structure, and Rivalry

The second attribute of UK that drive Tealive to expand their business to the UK is the competitive
of bubble milk tea industry in the UK are low. This is due to the reason, there are only less brand of
bubble milk tea are really a strong brand in the UK which is Bubbleology and Chatime
(Beverage Business World 2019). The others brand of bubble milk tea in the UK are less competitive
by comparing their brand awareness and number of outlets with Bubbleology and Chatime. This is the
good opportunities for Tealive expand their business into the UK market expand market, due to the
fact that Tealive have their own fierce domestic competition experience so they are able to
compete with competitors in UK. Therefore, by expanding Tealive to UK market, Tealive are able to
compete with the competitors with their marketing strategy that implemented in Malaysia these few
years.
iii. Related and Supporting Industries
The third attribute of UK that drive Tealive to expand their business to the UK is the succeed of other
industries in the UK that would relate and supporting Tealive. Firstly, the success of E-wallet
industry in UK would supporting Tealive for the transaction between organization and
customers, such as PayPal, EcoPayz, EntroPay, Skrill in UK (Compare & Apply Loans & Credit
Cards in India- Paisabazaar 2019). Not only that, the success of E-wallet will change the transaction
behaviour of customer which is provided more efficiency and accurate transaction services to
Tealive and customers. Therefore, consumers feel satisfy toward Tealive while using the E-wallet
Apps.
Besides, Food delivery companies in UK such as, Uber Eats, Foodhub, Hungry House would help
Tealive to distribute their products in convenient way to customer, rather than visiting the
physical store and purchase (Matters B 2019). Moreover, in the food delivery Apps, they might
implement their loyalty program to retain both of their customers (Peerbits 2019). In short, food
delivery companies in the UK would help Tealive to serve more and different area of customers,
promoting their products in Apps, and increasing their sales.
6.0 Challenges the company had encountered

6.1 THREE (3) challenges during their international expansion

i. Restriction from La Kaffa Company

During the expansion of Tealive business, Tealive had encountered some challenge which makes
them slowdown in the expansion. Tealive has court issues with La Kaffa International Company form
Taiwan. So, La Kaffa take some legal action which they brought the case to the Court of Appeal in a
written statement against Loob Holding. Based on the previous news, La Kaffa wanted to stop Loob
Holding from operating a Tealive business which is similar as Chatime as they said that their tea
business had been stolen from them, and mention that Loob Holding is not loyal with them (Fun P
2019). Also, La Kaffa Company begin to terminated Loob Holding’s contract as the franchise
holder for Chatime in Malaysia based on the breach of contract on Loob’s actions. La Kaffa also
mentioned that Loob had begun sourcing unapproved ingredients, and not follow the terms of the
master franchisor contract (The Malaysian Reserve 2019). In this situation, the court issues between
La Kaffa and Tealive is giving the negative brand reputations and the foreign market may not
confident on Tealive. Thus, it directly affects the progress of the business expansion, as the brand
reputations is represent the quality of the products of services

ii. Rebrand of Tealive

Moreover, Tealive has faced a challenge to rebrand from chatime to Tealive due to the court issues
(Pikri E 2019). La Kaffa Company restricted Loob Holding to expand the Chatime business. Thus,
Bryan Loo rebrand the business from Chatime business to Tealive. This is challenging for Bryan Loo
because the consumer might not aware about the Tealive business is actually come from the
previous Chatime, since the brand name is totally change. Therefore, Bryan Loo has to manage the
promotion and advertising heavily in order to create awareness in the markets when do expansion
and make consumer aware about the availability of Tealive.

iii. Rebuild customer confidence level

Aside from that, one of the challenges for Tealive is rebuild the confidence level of consumer due to
the court issues with La Kaffa Company. Generally, expanding business to international level require
substantial capital to carry out the expansion, therefore Tealive has to rebuild the consumer
confidence level and also customers loyalty in order to obtain the support, sales and profits from
customers. As the saying goes, customer is the key factor for generating sales and profits for every
business. Without loyalty customer to patronage, Tealive business will having limited chances to
expand the business into international level and failed to expose the brand to higher level.
6.2 THREE (3) other challenges will potentially face in the future
i. Tax codes and compliance issues
The first challenge of Tealive expanding their business to international is about the tax codes and
compliance issues (Tradegecko 2019). When expanding a business to international, the tax codes and
compliance issues are the most complexity and difficulty to understand, this is because the rules
and regulations of every country might be different. Some of them may bring inconvenience for the
business that does not understand the tax codes and compliance of the country. Tealive have to be
aware of trading standards and regulations of the country wanted attempting, to ensure meet the
compliance regulations.

ii. Supply chain

The second challenge of Tealive expanding their business to international is about the supply chain
(Tradegecko 2019). Tealive is operating their business model as a franchise business model, so that to
ensure the quality of product and service, the ingredient and equipment of franchisee are supplied by
the franchisor. By export, shipping and logistics those ingredients and equipment from Malaysia to the
United Kingdom, it is a big challenge for Tealive as it is costly.

iii. Operational risk with hiring staff in overseas country

The third challenge of Tealive expanding their business to international is about the operational risk
by hiring staff in overseas country (Tradegecko 2019). Due to operating business in another
country, Tealive will need more employee to handle the operating activities of the business. By hiring
more employee, Tealive should provide training to new workers of different country, and ensure they
understand and follow the job scope to perform their daily job in the store.

6.3 Propose ONE (1) future strategy the company may adopt
The strategy of Tealive may adopt in the future is licensing the brand name from the famous cartoon
or animation characters that is trendy such as Marvel. By getting the licensing brand name of Marvel,
Tealive can build their own factory to produce the cup with designing of Marvel character and sell in
their business. This help Tealive to attract consumers’ awareness, and is one of the effective ways
to boost up sales in short term. Tealive can use the brand name to implement marketing activities
such as promotion and advertisement to attract consumers and gain sales. In short, by getting license
from strong brand name to promote Tealive products, it is able to gain the awareness of Tealive
effectively.
6.4 Propose ONE (1) country for future expansion
The country that will propose to expand is Canada. This is due to Canada will have the common
language with Malaysia. According to the research, Canada speaks English most in their home
country, there are 75% of population in Canada is speaking English, and using it to communicate with
each other (Babbel Magazine 2019). Also, English is one of the official language that spoken in
Canada. In addition, Malaysia can speak many languages in operating their business due to
Malaysia is having multiple culture. By having the common languages, it will avoid the conflict
between the employee and Tealive business holders, and it can ensure the business expansion going
smoothly without misunderstanding.
Also, Canada is in the Top 20 total wealth country in the world. This delivers the messages that
Canada is having a well economics in their country. Based on the research, Canada is in the 18th
places total wealth in the world, and having 48604 GDP per capita in years 2019 (FocusEconomics
| Economic Forecasts from the World's Leading Economists 2019). This is the great opportunity for
Tealive to expand the business to the top 18 th places total wealth in the world, the result can signify
the Canadian is willing to spend their money and manage the economics.
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8.0 Appendices

Appendix2.0 300th Tealive in Malaysia

Sources: https://www.instazu.com/media/2099069009244534969

Appendix 3.1 Tealive Coffee series in Vietnam

Sources:
https://www.facebook.com/tealivevietnam/photos/ms.c.eJxFzdsNwCAMQ9GNKicmD~_~_~;WFUo8
Ht045iabQGEkwPx2AYTgPIfhtSRWdQp9J1QucEwC~_9TxNzIurC~_4MIa5QtJaBtx.bps.a.1983814
785233427/1983815055233400/?type=3&theater
 Appendix 3.2 Tealive Sea Salt Cheese series in Vietnam

Sources:
https://www.facebook.com/tealivevietnam/photos/ms.c.eJxFzdsNwCAMQ9GNKicmD~_~_~;WFUo8
Ht045iabQGEkwPx2AYTgPIfhtSRWdQp9J1QucEwC~_9TxNzIurC~_4MIa5QtJaBtx.bps.a.1983814
785233427/1983815001900072/?type=3&theater

Appendix4.1 Different type of snacks food selling in Tealive

Sources: https://www.facebook.com/pg/tealivesegamat/posts/
 Appendix 4.2 Tealive collaborate with Food Panda delivery services

Sources: https://www.foodpanda.my/restaurant/o5ah/tealive-selayang#restaurant-info

Appendix 4.3 Price of one cup of Tealive

Sources: https://www.tealive.com.my/menu