Straight to the Source: The Boba Guys Visit Taiwan

Bin here, reporting back with some observations on the current business landscape in Asia after two weeks in Taiwan, birthplace of boba milk tea.

Though my trip was mostly to report on cycling in Taiwan, along the way I managed to try boba milk tea everywhere I went. It could be found on most street corners and in most restaurants; I even stopped by Chun Shui Tang, the tea shop where boba milk tea was apparently conceived back in 1987.

Boba milk tea is still wildly popular in Taiwan, but the country hasn't produced a recognizable brand for the product. How is it that a region that has such high brand appreciation has produced so few international brands of its own?

Outside of Japan and Korea, there are only a handful of Asian brands that people worldwide will recognize. A major thorn in Asia is the topic of intellectual property protection. It's generally understood that if a brand manages to make it to the big stage, it will be copied shortly thereafter.

Thus, for a very long time, Asian businesses were focused on low cost and less focused on innovation. A prevalent business belief is that branding is a cost, rather than a strategic and long-term investment. Asian companies tend to view branding as a tactical maneuver, rather than as an intrinsic part of a company's identity.

This is all changing though, and very quickly. With China's burgeoning middle class and the massive demand for brand-name goods, all of Asia is starting to take notice. Companies overseas are pouring more money into their marketing budgets, and more emphasis is being put on branding—not only to consumers in their own backyard, but with an eye toward a more global reach.

Another difference: The general startup cost to open a business is relatively low in Asia. Picture a landscape dotted with hundreds of small mom-and-pop shops and restaurants with new ones opening seemingly overnight. In America, we have a lot of government red tape to clear before we ever start: A business has to acquire operating permits, tax filings, insurance, food and handling permits, the list goes on. The Asian system allows for many small companies to flourish, mostly focused on low cost and diverse offerings.

We think Boba Guys falls somewhere in between East and West, and we’ll explain why next week. Stay tuned!