Kanada-Ya’s Shocking Singapore Market Exit: 4 Takeaway Lessons

Japanese ramen chain Kanada-Ya has ceased all operations in Singapore after its parent company Aspen Group said it is winding up the business due to continued losses.

While some are shocked by the sudden announcement, others expressed that it was inevitable because they felt the UK outlets serve tastier ramen. JEM and Marina Square outlets stopped operations days before the news was announced in the news outlet The Straits Times, and the PLQ outlet was boarded up.

This is not unique as another Japanese food franchiser, Japan Food Holdings, has experienced loss of $2.9 million, more than four times the loss almost 2 months ago. That was after the group cut the number of restaurants by 2 outlets. The group also closed 3 Konjiki Hototogisu outlets in Singapore.

Let’s take a look at the recurring topics modelled based on Tanjong Pagar outlet’s Tripadvisor reviews.

Why did the topic “beansprouts” ranked higher than “ramen”?
Because the restaurant serves free beansprouts and hard boiled eggs as starter before they serve their ramen. This shows that the local diners appreciate these items served before the main dish, because that helps them to hold their hunger before their food comes. Hence it will become a memorable part of the dining experience.

2. Optimize Hospitality and Problem Mitigation

let us take a look at the reviews on the service at Ramen Keisuke Tori King in Singapore.

Making kids meals free is a part of hospitality, which can retain customers and turn them to regulars, bringing their kids every time they want to have their meal there. In Kanada-Ya, Kids Tonkotsu Ramen is priced at $9.9, which is already expensive considering the rising living costs in Singapore. It is also worth mentioning that Ramen Keisuke Tori King staffs also took complaints raised by the customers very seriously as shown in the review. This might have convinced the diners to come back or even become a regular.

These are two 1 bad reviews of Kanada-Ya Ramen Paragon (before it eventually closed). The first review mentioned how the restaurant could not circumvent the system by charging more than it should, and the second review mentioned bad hospitality standards, even more after the shop removed the feedback on their Instagram account. It might seem trivial to some people, but the word “wait” might seem that the waiter is annoyed towards the request, hence dismissing the customer’s concerns.

3. Plan before Expanding

Another important aspect is that the expansions of Kanada Ya after its opening at PLQ in 2019 might have been too haste and done without considerations of conditions around the world. They opened their second outlet at Marina Square around May 2022 and third outlet at JEM around October 2022, the gap between the second and third restaurant opening being 5 months. It is also worth mentioning that there was an ongoing conflict which might have risen living costs around the world.

First, Marina Square is location wise not strategic as it has less footfalls than Suntec City, a mall nearby but several times bigger and has more attractive tenants. It might be close to office areas, but during weekdays people might want to eat more affordable food like those in food courts instead of ramen. Second, JEM’s mall layout is very complicated, making wayfinding difficult for diners. This is reflected by the number of google reviews of Marina Square being half the number of reviews of PLQ outlet, and the number of google reviews of JEM being a quarter of PLQ outlet.

4. Partner with People with The Same Values

The partner of Kanada-Ya in Singapore, Aspen Group, is a group focusing on property building, not F&B. This might have led to operational inefficiencies or lack of strategic focus. For Japanese brands wanting to expand overseas, it is essential to collaborate with partners with experience expanding F&B brands, tailoring it to local market, and most importantly adapting to the ever-changing world.

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