I walked past a Gonuts Donuts store the other day, which displayed a “Buy 6, Take 6!” poster in a desperate act to nab some impatient souls away from the hordes of donut zombies wanting to get a bite of J.Co. Maybe another two months of financial castration will push them to introduce donut rice meals in an attempt to relieve the pain.
It’s a common cycle for local food ventures. A Filipino entrepreneur sees an interesting concept in a foreign country and makes a similar version at home and profits. Competitors then see potential and decide to one-up the local competition by bringing in the original, foreign version in to take the number one spot. We’ve seen this happen. Bon Chon pushed Chicken Charlie to the outskirts of the Korean chicken market. Krispy Kreme (now, J.Co) mopped the floor with Gonuts Donuts. IHOP is hoping to pull it off versus Pancake House.
With competitors closing in, is Yabu going to be the next victim?
You’ve probably heard that two of the biggest behemoths in Japan’s katsu scene are set for a Manila launch in a month or two. Saboten, founded in 1966, is warming up in Serendra. Ginza Bairin, founded in 1927 (realize that sliced bread was first sold in 1928!), is under construction in the new Glorietta across Raffles Hotel. I’m assuming both want to expand and eat into Yabu’s lucrative katsu pie.
If you visit each of their websites, you’ll notice that their menus are almost identical: a deep-fried protein with a set meal consisting of steamed rice, miso soup and some plant matter. All of them boast of the same things as well: fresh bread crumbs, the world’s greatest frying techniques, a special tonkatsu sauce, and a nice, golden color to their katsus.
There’s not much product differentiation in their flagship products so competition is obviously stiff. In fact, Yabu hit the panic button recently when it started offering unlimited miso soup and organic brown rice in its menu. They’re not taking this lightly and rightly so.
But despite all this, I’m guessing that Yabu will still be a frontrunner once the fog of this katsu war subsides. Here are 4 reasons why:
1. Yabu is not a franchise and has more cash to play with.
Let’s assume that Ginza Bairin and Saboten both need to pay their masters 5% of their store revenues as a royalty for their franchises. For comparison’s sake, let’s assume that the three katsu houses make 2 million pesos every month (they most likely make much more) for each of their stores. Through simple math, we can calculate that Yabu will have an extra 100,000 pesos every month as a leverage.
That cash can add so much value for their customers—improving service, increasing quality or even adjusting prices. More cashflow is more financial freedom and Yabu will definitely have the most of it.
2. Yabu is not Gonuts Donuts.
If you take a look at the strange Gonuts Donuts Facebook page, there’s a brief history lesson, “The Trillana-De Ocampo clans engaged in a donut business and attempted to have a franchise of the American-based Krispy Kreme. They, however, were denied. Thus, they decided put up their own. After 18 months of planning, Go Nuts Donuts was created.” They said it themselves: they made Gonuts as a Krispy Kreme substitute.
Gonuts Donuts fell precisely because people only ate there because they couldn’t get Krispy Kreme. They put themselves in second place to begin with.
It’s not the same with Yabu. People don’t eat in Yabu because they’re waiting for Saboten or Ginza Bairin—they just want Yabu. This is a critical distinction because it defines the fate of local stores that were patterned after international counterparts. Once you position yourself as a mere placeholder, death is certain once the real deal makes it to the market. Yabu didn’t fall in that trap.
3. Yabu is as good as its competitors.
I’ve personally tried Saboten and a couple of katsu places outside the Philippines. I have friends who’ve tried both Ginza and Saboten. Some say one’s better than the other; but there’s no clear winner.
It’s not surprising.
You can only do so much with katsu because it’s a straightforward dish that doesn’t have too many variables that could significantly alter the final product. If you keep the deep-frying consistent and all the ingredients of high quality, you’ll end up with identical results. Most of the creativity will come from the sauces, side dishes and overall experience.
For the most part, Yabu’s on equal footing with its international competitors.
4. Yabu monopolized the Internet.
With 200+ reviews for its Megamall branch, Yabu (based on my informal research) is Looloo’s most-reviewed restaurant and the most-reviewed 5 star restaurant. That’s a gargantuan deal since it’s no easy feat to get a 5-star review in Looloo with that many reviews.
If you key-in “katsu manila” in Google, you’ll be slapped with blog posts about Yabu more than 10 pages deep. Their Facebook page has almost 14,000 likes and their Twitter is nearing 8,000 followers. Considering that Yabu was a single branch restaurant just until recently, these numbers are impressive.
With a social media advantage like this, the cost of reaching their customers is now almost zero making it stupidly easy for Yabu to give their customers a heads up for new offerings and updates.
Watching these things unfold is exciting especially when you’re pitting a local concept against international chains. Although I’m certain that Saboten and Ginza Bairin will do well when they open with such fame and equity, I’m not sure if they’ll be able to do damage to Yabu.
I’m guessing what’s gonna happen is that the popularity of these katsu houses will bite into the market share of non-specialty Japanese restaurants and the katsu category will begin to carve itself a specialized niche.
In any case, the bottomline winners are the fresh bread crumb suppliers who are now probably making snow angels in a bed full of it.
What are your predictions? Let us know in the comments section below!
[Edit 1: Updated Yabu’s statistics in Looloo]