Looking South Episode #20 – SMEs – La Fresh

In this final episode of this season of Looking South, Eric Gau talks with May Kang, Lafresh Information Company CEO, about her company’s expansion into Southeast Asia.

Listen here

Transcript below:

Eric Gau: Good morning. I’m Eric Gau, and welcome to the final instalment of Looking South. We’re wrapping up with one last look at a company that has expanded abroad with the help of the central government’s New Southbound Policy. To tell us about that, we are joined this morning by May Kang, the CEO of Lafresh Information Company. Ms. Kang, hello, and welcome to ICRT.

May Kang: Good morning, everyone. Thank you for having me.

Eric: Ms. Kang, let us know what sector is Lafresh in? What kind of company are you?

May: Basically, we provide hardware and software solution, such as POS systems, self-service kiosk, app, management system. It’s not only hardware but also software. We help those offline physical stores to work more smartly and we also increase their efficiency.

Eric: So you’re saying you mostly target brick-and-mortar stores instead of online vendors?

May: Yes, because most physical stores are threatened a lot by online chains, right? So we position ourselves as enablers of those physical stores. We help them to increase their revenue and reduce their labor costs. So we provide all kinds of software and hardware devices to them.

Eric: Are you helping companies in like the retail sector, the manufacturing sector, dining? Which sector are you targeting at?

May: Basically, dining and restaurants. We account for maybe 15% market share in local market, especially in Taiwan.

Eric: What was the impetus for your company’s move to expand into the Southeast Asian market?

May: Our target clients are chain stores. Taiwanese food industry is quite popular and powerful in Southeastern Asia. So once they have exposure in those countries, we follow their steps to expand our business there. Also, Lafresh belongs to one member of BenQ, and BenQ also invest in one similar company in Singapore. Their market share maybe about 50% in Singapore. So Lafresh and that Singapore software company, we have set up a very, very strong value proposition across Asia. That’s why those chain stores, especially for those clients in Taiwan, they refer to us. Once they have exposure in Southeastern countries, and they need hardware and software and service. We can provide all of this.

Eric: What countries are you targeting in your expansion plans, and why did you chose those?

May: At this moment, we have exposure in Malaysia, Indonesia, and Vietnam, because in those countries we have local partners already. And also, our chain stores clients they have exposure, they have chain stores, in those countries. Those countries, actually, the economy is still growing, and their population is very, very young. In terms of market potential, there is market opportunity there.

Eric: What incentives or help did the government here in Taiwan offer La Fresh that informed your decision about going expanding abroad?

May: Basically, we joined some government-led offshore conventions and exhibitions. We go along with our government several times in the year. In the show, we can find our local partners. And there are local opportunities. They will come to our show and see if there is any opportunity there. Government has provided us some subsidies, especially in specific markets and some new technology. We actually are the benchmark company in the smart retailing industry. Our government has helped us a lot.

Eric: What were some of the biggest challenges you encountered as you were entering these markets?

May: A lot. A lot. In those Southeast Asian countries, the language and tax system and regulations are quite complicated and fragmented. Culture shock is still an issue, so that’s why the local partner is quite important.

Eric: Obviously, doing business here in Taiwan is different from doing business in these other countries. What were some of the things you had the most difficulty getting used to in how business is run in Malaysia, Indonesia, or Vietnam?

May: I think in terms of government, the efficiency is not so good. And also, dining and restaurant is part of the culture. So the way you deal with those consumers are different. And also, how they look at things. Even the menu order is different. I think dining and restaurant is really part of the society, part of the culture. It’s very, very complicated.

Eric: Since you’ve been entering the Southeast Asian market, how has your business benefited or expanded? What have you learned that has allowed you to improve your operations?

May: I think globalization and localization. There are two kinds of trends. For those chain stores, globalization is their target, so they are searching for a standard. In terms of systems, they need to monitor on-site situations across those countries, where they face hundreds or thousands of stores, and they need to do some immediate decisions on-site, in terms of the host company’s view. But localization is also another key, because you need to do some change accordingly. I think that is our challenge. Sometimes, you need to partner with local partner, but sometimes you need to control because you want to do some standardized decision. It’s a hard job. That is the goal now we are trying to reach.

Eric: What are you plans for the future in those countries?

May: Offshore revenue only accounts for our maybe less than 10 percent. But maybe in coming four or five years, our target is to reach maybe 15 or 20 percent. But before we reach the target, we need to do much more with the local partners. Maybe we should do some revise accordingly to meet the local requirements. And also we need to recruit some high talents locally. But now we know research team and actually the expense and labor costs of those engineers is not so high if you recruit locally in Taiwan compared to other countries. The talents are our issue, and also is a very big task as well.

Eric: What is something you wish you knew before you started your expansion, and based on that, what kind of advice do you have for other companies that are considering the move?

May: You should do some research, and you need to send a smart team or smart person to be in charge of the business. And also you need a group of people. You should not do it alone. The team must work very, very hard. You can refer to the government as well. I think in terms of government, there are some resources, like World Trade Center. You can get more advice from similar companies and do more research. You can come with your clients, you can come with your upstream or downstream players, you should come with a group of people. Don’t just do it alone.

Eric: We’ve been chatting with May Kang, CEO of Lafresh Information Company about her business’ experience in Southeast Asia. Ms. Kang, thank you for taking time out of your busy schedule to share with us today.

May: Thank you, thank you for your time.

Eric: And that wraps up this season of Looking South. Remember that you can find all the episodes in podcast from on the ICRT web site or on the mobile app. You can also look for the Looking South blog online for transcripts of every interview. I’m Eric Gau, and thank you all for tuning in.


Leave a Reply

Your email address will not be published. Required fields are marked *