“Breaking the mould” aptly describes Paris Baguette’s success. From a small bakery tracing its roots to North Korea in 1945, it is known today as a ‘French-inspired’ Korean franchise global bakery chain with annual sales in excess of a billion dollars. How had this success been achieved and what would be the appropriate strategy for continued business growth?

Paris Baguette was a premium bakery café franchise brand owned by SPC Group, a leading food and confectionary conglomerate in South Korea. To reflect its strong association with French style, the Paris Baguette brand was replete with French themes: from its name, an Eiffel tower logo, to the staff dressed in Breton-style striped tops.

“I’ll do my utmost to help Korea earn a reputation as the ‘mecca’ for bread and pastries,” said Young-In Hur, CEO of the SPC Group. Paris Baguette’s success was primarily driven by its emphasis to provide innovative fare with a modern and wide selection of fresh, clean and healthy products. To that end, it procured more than a thousand different ingredients on a regular basis to offer a menu consisting of over 600 different types of breads. Hur established a vertically integrated supply chain that gave the SPC group control over key operations such as the supply of raw materials, processing of dough and semi-baked products, and delivery to the stores.

In 2004, Paris Baguette was the first Korean bakery to go international, when it opened its first overseas company-owned store in Shanghai, China. By August 2012, it had opened its 100th outlet abroad and its 200th in December 2015, and by 2016 the chain had expanded to more than 240 stores across China, Vietnam, USA, Singapore and France.

The focal point of Paris Baguette’s global strategy across all markets was to upscale, differentiate and localise. It positioned itself as a premium brand, targeting upper-class consumers. In addition to its French-style offerings, the company placed an emphasis on presenting a globally informed menu. At the same time, it ensured that its marketing mix was well integrated with the local tastes, culture and preferences. In 2014, having successfully employed its strategy of ‘glocalisation’ in different markets across Asia and North America, Paris Baguette decided to expand to Europe with France as its first port of call.

According to Hur, “We regard France as the spiritual home of our bakery products. The opening of our Paris store highlights our commitment to continually improving and perfecting the quality of our European – style bread and pastries.”

In less than a year of its opening, the stores’ customer base had expanded to 850 customers visiting it each day, and sales had grown by 25 percent. The success of its first store encouraged Paris Baguette to open its second store in the Opera district near Palais Garnier in Paris, in 2015. In less than two years, the two shops had served over 700,000 customers.

In 2016, Paris Baguette entered the Coupe du Monde de Boulangerie, an annual premier baking competition held in Paris that was described as the ‘world’s most prestigious bakery contest’. The company competed against a host of truly French boulangeries and emerged victorious, winning favour with French locals, who were regarded as the world’s most discerning consumers of baguettes.

Written by Professor Jin K. Han, Dr Sheetal Mittal and Dr Havovi Joshi at SMU, and Professor Yong Seok Sohn of Kyung Hee University, this case examines how an Asian brand can succeed in its overseas expansion not only to other Asian markets but also to the developed Western markets.

To read the case in full, please visit the CMP website by clicking here.