Singapore Billionaire On Hot Streak From Selling Premium Coffee, Tea
With the help of TWG Tea and the century-old Moroccan brands Bacha Coffee, Ron Sim’s V3 Group is expanding internationally.
Nestled between the Armani and Zara stores at Singapore’s renowned Marina Bay Sands is Bacha Coffee. The walls of the café are covered with square tins of coffee beans in vibrant shades of saffron, the most costly of which is Paraiso Gold from Brazil, which costs S$1,100 ($840) per 100 grams at Bacha. As patrons enjoy their Comté cheese croissants and 100% Arabica coffee (of which there are more than 200 variations), they might consider reaching a little farther into their wallets for something like the S$3,899 gold-plated metal and glass Sultan coffee pot.
There’s frequently a line to get a table at Bacha, but those who can’t wait to get their coffee fix can try their luck at TWG Tea, which is located nearby and is decorated like an English tea room with wall-to-wall displays of yellow tea canisters. When available, TWG sells 50 grams of Japanese Imperial Gyokuro green tea for S$1,271.
Singapore Billionaire On Hot Streak From Selling Premium Coffee, Tea Ron Sim, the owner and operator of both franchises through his privately held V3 Group, states, “We are not just any coffee or tea shop.” “We’re creating high-end brands.” Sim has a history of producing highly sought-after, upscale goods. Bacha is a relatively new company in his portfolio. It is most renowned for its luxurious and expensive OSIM massage chairs, which used to fill malls all over the region and made him a billionaire ten years ago. Although the legacy business has declined since its peak, the inclusion of caffeine in his portfolio has improved the situation.
These days, Sim’s estimated net worth of $1.6 billion comes from a variety of commercial ventures, such as real estate, retail furnishings, and health supplements. He manages this portfolio from the V3 Group offices, which is located far from the flashy shops of the city-state in an industrial Singaporean suburb. The chairman of V3 is currently fixated on developing brands that are globally appealing and can be scaled up and exported, particularly among the young and wealthy.
Sim set aside $100 million two years ago to finance an international campaign. The majority of the money has already been used to open 24 Bacha stores in almost a dozen countries in Asia, Africa, the Middle East, and Europe. According to Sim, Bacha is a huge success. “It will grow much more quickly.” By 2030, Sim hopes to have more than 100 locations, and he is optimistic that the chain will produce enough revenue flow to finance the
Built in 1910 as the former governor’s mansion in Marrakech, the Dar El Bacha palace served as the inspiration for Bacha Coffee, a more than a century-old Moroccan brand. After being closed during World War II, the palace was restored as a museum in 2017. Taha Bouqdib, a cofounder of TWG Tea and Sim’s French-Moroccan business partner, was invited by Morocco’s King Mohammed VI to create a café within the museum.
Though Bouqdib was persuaded of the Bacha Coffee Room & Boutique’s wider appeal, the original site in Marrakech was recreated. “I thought, ‘How can I take the palace to the world,’ when I first saw it in Morocco,” recalls Bouqdib. “We bring the palace experience to every store,” the statement reads. Charlie Chaplin, Winston Churchill, and Franklin D. Roosevelt were among the famous people who had visited the original Marrakech cafe. Celebrities like American basketball legend Michael Jordan, who visited the Marrakech store last year, are still drawn to it today. Singapore Billionaire On Hot Streak From Selling Premium Coffee, Tea
After obtaining the worldwide license from Morocco’s National Foundation of Museums, which oversees the palace museum, Bouqdib got to work. 2019 saw the opening of Bacha’s first international location in Singapore’s Orchard Road retail district’s upmarket Ion mall. Money was lost when Covid-19 brought the globe to a standstill the next year. Sim was convinced of Bacha’s potential after Taha presented him with it. The Bacha business is currently mostly owned by Sim, who purchased it for an undisclosed amount and incorporated it into V3 Gourmet, a division of V3 Brands, where Bouqdib, who holds a minority ownership, serves as president and CEO.
Seven more Bacha locations debuted in Singapore in 2022, with The Arch—a $10 million, 650-square-meter coffee boutique situated in Changi Terminal 3’s duty-free area—being the biggest. Retail and distribution make up roughly 70% of revenues, according to Bouqdib, who also notes that this and the other three stores at Changi have grown to be a well-liked destination for tourists looking to make last-minute gift purchases.
Was the timing of that risky? “I’ve been in this business for 45 years, and every crisis we’ve faced, we’ve essentially recovered from very quickly,” Sim responds. “I would always seize the chance to correct and consolidate during a crisis, and then make sure that we grow much faster.” The wager was profitable. According to financial documents, Bacha Coffee reported its first-ever net profit of S$2.2 million in 2023 on revenue of S$96 million, up 146% from the year before.
“We are not just any coffee or tea shop. We’re building premium brands.”
Prashant Kumar, head of Southeast Asia and partner at private equity firm KKR, says, “We are delighted by what Ron has created, along with his management team and partners.” In 2018, KKR agreed to invest up to S$500 million for a minority stake in V3 Brands, valued at S$1.7 billion. Between his gourmet businesses, TWG and Bacha, and OSIM massage chairs, he has an amazing collection of brands. The brands are still quite powerful. (KKK and Sim declined to comment on the current valuation of V3 Brands).
According to Aletheia Capital’s head of consumer and internet research, Nirgunan Tiruchelvam, who is located in Singapore, Sim struck the right note with Bacha. He claims, “They’ve got the old-world opulence vibe that resonates well with consumers, and they’ve got the taste and packaging right.” “People are prepared to spend more for that.”
im’s Chinese name Chye Hock signifies “luck” and “blessings.” He worked for R. Sim Trading, a company that sold home appliances, after graduating from high school in 1979. Years later, he rebranded the company as OSIM (the “O” stands for the globe, followed by his surname), concentrating on selling massage chairs and other wellness and lifestyle products to a more affluent clientele. Being such a small market—Singapore is sometimes referred to as “the little red dot”—he knew early on that he needed to expand internationally.
With one significant setback, Sim has been successfully establishing a position for himself in the international market for his shiatsu-inspired massage chairs for more than 40 years. Following the company’s 2000 IPO, in which it sold more than 25% of its shares for a mere S$71 million, Sim suffered a financial setback in 2005 when OSIM, working with the Singapore sovereign wealth fund Temasek and the Boston-based private equity firm J.W. Childs Associates, paid $450 million to acquire the U.S. specialty retailer Brookstone. (The identical year, OSIM listed among the businesses with sales under $1 billion on Forbes Asia’s Best Under A Billion list.) Despite the fact that the acquisition allowed it to sell its chairs at nearly 300 U.S. stores, Brookstone filed for bankruptcy in 2014, and OSIM later sold its interest in the company for $175 million. Sim reassembled his firm under V3 (which stands for Vision Three) after taking OSIM private in 2016 at a valuation of S$1 billion and delisting it from the Singapore Exchange.