TOKYO -- Japan's leading coffee shop operator will take its low-price cafe chain to mainland China via a local joint venture, returning to the country after ending a previous foray with pasta restaurants.
Doutor Nichires Holdings will partner with restaurant group Xiao Nan Guo, whose business includes high-end Chinese dining. Xiao Nan Guo had flourished on lavish official meals funded by taxpayer money. But it has suffered under President Xi Jinping's crackdown on official extravagance.
With Chinese consumers increasingly price-conscious, the partners see potential for the low-price Doutor Coffee chain. The first location will open as early as the fiscal year starting March 1.
Doutor Nichires, which also runs chains such as Excelsior Caffe and Hoshino Coffee in Japan, operated three pasta restaurants in Shanghai until about three years ago. It ended that effort, and now has just overseas 18 locations, such as cafes in Singapore.
With help from the popularity of high-end coffee in Japan, Doutor Nichires is on track to a record operating profit in the current year. It is looking to ride that momentum back into China with an experienced partner.
The partnership, to be announced as early as Monday, could help Xiao Nan Guo broaden its customer base.