Hung Fook Tong (HFT) founded in 1986 and more than 120 stores in China and HK. HFT turned traditional herbal tea shop into a modern and innovative enterprise over the years which have over 100 products, including herbal jellies, herbal tea, homemade soups, and preservative-free healthy drinks. An innovation that helped both the popularity and the portability of herbal tea, they have more than 3000 retail points across the territory, including supermarkets, convenience shops, schools and restaurants.
Kung Wo Tong (KWT) was established in 1904 by an imperial physician in the Qing Dynasty, there are total 10 stores in HK and 1 in China.
The stores located along a main street and keeps old-fashioned herbal drinks shops in typical sized with limited even no decoration over hundred years. Most of shops sell four to six kinds of herbal drinks, but the herbal jelly is one staple that seldom miss the list. They keeps tradition way and focus more on the health benefits rather than its taste.
HealthWorks (HW) started as a traditional Chinese herbal tea shop in 1989 and decided to modernize the company in 2000 in order to follow their global expansion plan.
HW use modern technologies involves in develop, produce and distribute an array of traditional Chinese natural nourishing productions including herbal soup, herbal tea, medicinal tea, herbal jelly and other Chinese medicinal diet. There are 22 shops which mainly at MTR stations with trendy decoration and more than 1500 point of sales distributing ready-to-drinks herbal tea in various supermarkets and convenient stores
Compare to HTT, customer regard KWT is more traditional and believe the products have more medical function while HFT and HW are trendier and provide health supplement goods.
So, customers who go to HTT and KWT will be the local people who believe traditional herbal benefits, mainly the adult and elderly. The customers who go to HFT and HW will be younger age customers with health conscious and even tourists.
HTT lost the competitive advances to HFT on product range and market coverage due to HFT do a good job at distribution strategy which has lots of products and large distribution channels. HFT also use price strategy to set their price is the lower among these competitor, these advances make HFT become the biggest herbal tea group in HK according to survey by AC Nelson.
HTT use location strategy and branding strategy better than other competitors who have many chain stories and strong image, so HTT have competitive advances on sales network, number of chain stores and customer loyalty.