‘You must create your own trend’: How Mr Coconut transformed itself from struggling business to popular chain

SINGAPORE: Their business was struggling, their savings were disappearing and their hopes were fading. The worry was all-consuming, recalled Mr Coconut co-founder Andrew Cai. 

He could not sleep at night and constantly wondered if he had made a mistake in starting the business. 

After all, Mr Cai and his other two co-founders Lucas Lin and Vivian Yeo had no F&B experience when they started in December 2015.

“It was very, very stressful,” said Mr Cai. “We wondered if we were doing the wrong thing. Sometimes when you are too focused and you want to go through (with it) but a lot of people are saying negative (things), you will doubt yourself. 

“You’re thinking, maybe this cannot be done. Maybe they are right.”

Their business, then known as Xiang Yu, operated at Far East Plaza. A variety of offerings were on sale, including a hidden gem – the coconut shake.

“We were afraid that people might not like coconut shake, people might like other drinks. So we included a lot of drinks, we even included gelato at the front of the shop to attract people to come and buy ice cream,” said Mr Cai.

But customers seemed far more interested in drinks such as bubble tea, so much so that it had to be added to Xiang Yu’s menu.

“Basically, when everybody came to our shop, they asked: Do you sell milk tea?” said Mr Cai.

The trio tried other ways to entice customers such as giving out free samples and getting bloggers to advertise their drinks. All to no avail, with sales at a paltry S$100 to S$200 a day.

“We endured, we tried to find ways. Every day we were thinking: ‘Why? Our drinks are nice … but the sales were so little,'” said Mr Cai.

With the business losing a five-figure sum every month, the co-owners gave it a final roll of the dice. They would rename the business to Mr Coconut and focus solely on coconut-based drinks.

“This last change was our last chance, our last resort. If we changed it and the sales did not increase, then maybe we would not continue this business anymore,” said Mr Cai.

A BIG CHANGE

It was during a trip to Melaka several years prior that the three friends were inspired to start their own business.

Mr Cai was an employment agent then, Mr Lin was a property agent and Ms Yeo was an accountant.

“During our trip to Melaka, there were many, many stalls selling coconut shakes, along the roadside … We tried this particular shop, it was nice. The queue was crazy,” said Mr Cai.

With no other shops selling coconut shakes in Singapore then, they thought “there was a chance” the drink would be a hit back home.