Nowadays, when walking on the streets and in department stores, you can see Korean fried chicken shops everywhere. Following brands such as Cheogajip Chicken, bb.q CHICKEN, and Kyochon Chicken, BHC Chicken also entered the Taiwan market in November, with its first store opening at the Far East Garden City Green Corridor of the Taipei Dome.
Maybe you are unfamiliar with this name, but BHC, founded in 2004, is the driving force behind the Korean fried chicken craze. In the 2014 Korean drama "My Love from the Star", which became popular in Asia, the scene of the heroine Cheon Song-yi, played by Jun Ji-hyun, enjoying fried chicken and drinking beer, ignited the "chicken and beer" food pairing and became a popular food pairing, becoming a symbol of Korean food culture. A big symbol, and the mouth-watering fried chicken in the show comes from BHC.
BHC remains the sales champion among more than 400 fried chicken brands in South Korea, with sales reaching 535.6 billion won in 2023, and operating profit exceeding 120.3 billion won. This is not a result of a marketing campaign that is a hit or a flash in the pan.
From 2018 to 2022, BHC's average annual growth rate remained stable at 16.9%, and in 2022 it exceeded the sales mark of US$ 400 million for the first time. Not only that, the operating profit rate has always remained above 30%. With 2,200 stores in South Korea, how can it achieve such impressive results? We can analyze it from two aspects: product and business strategy.
The cornerstone of BHC Chicken's success: emphasis on quality and continuous innovation
Quality is the foundation of everything. In order to provide customers with a fresh and tender taste in every bite, BHC selects local fresh chicken and stipulates that it must be sold within 3 days after entering the store. Meat that has exceeded the time limit will not be sold. In addition, sunflower seed oil sent directly from Korea is used, which has a high smoke point and refreshing aroma, and uses an exclusive two-stage frying method to create a crispy outside and tender inside.
BHC also maintains product competitiveness through innovation and launches at least 2 new products every year. They combine consumer analysis and observation of customer preferences on social networks to invest 6 billion won in a food factory. It has repeatedly launched trend-setting products. For example, the "Star Cheese Ball" launched in 2018 sparked a craze for side dishes in fried chicken restaurants. It not only dominated the hot ranking topics on social media, but was also listed as a must-eat item by mukbang YouTubers.
BHC struck while the iron was hot and subsequently launched new products such as cheese balls and hot dog skewers in various flavors. In 2019, the sales of side dishes accounted for 12% of the total for the first time, opening up a new market for the industry.
BHC, which has 26 overseas branches, also creates different product portfolios according to local preferences. For example, unlike Korea where one has to buy a whole chicken or a half chicken at a time, taking into account the eating habits of Taiwanese consumers, and also wanting to break the situation of "Korean fried chicken is large and suitable for dinner parties or sharing among many people", we introduced boneless chicken. Legs, two-section wings, large and small stick legs and other parts are available in M, L and XL portions to meet the dining needs of 1 to 6 people.
Taking care of logistics and customer service, franchise store sales triple
In terms of operations, BHC has made cross-industry borrowings. In 2017, it hired managers from Samsung Electronics to optimize the corporate structure and strengthen cooperation with franchise stores.
First, create a transparent management system and smooth vertical communication channels. They actively solve store difficulties and receive and solve problems encountered by the front line at work through a direct communication platform. One of the amazing cases is that through research and development, the original 10 steps of cooking have been streamlined into 3 steps, greatly improving the efficiency of meal preparation.
Secondly, BHC built its own logistics system and installed GPS satellite navigation systems on both warehouses and trucks to help franchise stores accurately grasp the delivery status and arrival time, improve warehousing management efficiency, and reduce losses. The practice of not outsourcing logistics also reduces shipping costs.
Not only is the logistics in-house, but the back-end customer service center is also operated by itself. The advantage of this is that the headquarters can eliminate the risk of information distortion in the layers of returns, thereby obtaining the most authentic and original customer opinions. Compared with companies that outsource customer service centers, they can more accurately improve the issues that customers really care about and respond faster.
Based on the above reforms, the average turnover of franchise stores increased from 140 million won in 2013 to 460 million won in 2019, an increase of more than three times.
