Too many Shopping Malls?

[Brewster67]

When I first moved to Korat 8 years ago we had basically 2 malls... One was very small and the other one very large... They were both popular places to go and I would say the customer base was adequate to keep them both ticking over nicely.

 

In the intervening 8 years we have seen an explosion in shopping mall building in the city. I totally get the idea driving it and we can see it all over Thailand, someone opens something up and it is swarming with customers, and before you know it they are springing up like mushrooms after the rain with everyone wanting a piece of the pie, often right next to you.

 

In the past 3 years we have had two relatively small malls open and two very large malls.. In fact the last one opened up about 6 weeks ago and what started off packed has already turned into a total ghost town with shops in there already closing down after going bust. My wife's aunt had a noodle stall in the food hall and has already walked away from it loosing her 100,000 baht deposit and itr is still empty... My wife and i supply cakes and snacks mostly to coffee shops and without a doubt our worst performing sales are in the malls, we make three times the amount of sales in a regular Amazon outlet in the local PTT petrol station than we do in a massive billion baht shopping mall :) That says it all.

 

Now I learn that they are about to start construction on yet ANOTHER large mega-mall. This will put about half a dozen malls all within an area that I can drive through in around 15 minutes and see the lot of them.

 

When is somebody going to realize that there is only a certain amount of customers in the area and with a limited amount of money to go shopping with to support this phenomenon?

 

We had a similar boom where everyone and their dog were building shop houses, they are everywhere now and half of them are lying empty for years, in fact we have had around 20 built in my immediate soi on different roads and only one has been sold in the past 6 years... Whatever happened to 'supply and demand'?

Edited January 22, 2018 by Brewster67

[Rally123]

1 hour ago, Brewster67 said:

Whatever happened to 'supply and demand'?

Whatever happened to 'feasibility studies'?? Haven't really met anyone here that could organise a piss up in a brewery.

[simoh1490]

The likes of Central Festival and its peer group aren't interested in your cakes and snacks, nor are they interested in more noodle stalls! What they are interested in is an array of international brands, top-tier local brands, survival of the fittest will determine which malls survive and which will become enhanced noodle and confectionary outlets.

[plachon]

I think the "supply and demand" is far more closely related to sources of credit, than anything to do with genuine customer demand. For the past few years, SE Asia in general has been riding on the coat tails of China's remarkable credit-led boom, and vast amounts of cheap loans have been offered to the elites to build infrastructure, such as the shopping malls, on the slimmest of feasibility studies and sense of economic reality. It is becoming a re-run of the pre-1997 Asian crash years, but this time it will be far more global in nature, as it will bring in many Western nations, especially the USA, when this whole bubble bursts and a smidgeon of economic reality reasserts itself again. Thailand, especially, has learned nothing from the 1997 experience, and history is preparing to repeat itself again. Whether the crash will come this year or next, is the main question? 

[Brewster67]

8 minutes ago, simoh1490 said:

The likes of Central Festival and its peer group aren't interested in your cakes and snacks, nor are they interested in more noodle stalls! What they are interested in is an array of international brands, top-tier local brands, survival of the fittest will determine which malls survive and which will become enhanced noodle and confectionary outlets.

I would say you are totally wrong.... there are more customers in the Korean buffet opposite Central plaza than there are customers in the entire mall... International brands are NOT interested in empty shopping malls with expensive overheads.

 

Do you have any idea at all the cost of trading in Central plaza?

 

It doesn't negate the fact that no customers means no business means they close....

 

At 2PM this afternoon, My wife and I were literally the ONLY 2 people on the main shopping concourse and it isn't much different on a Saturday afternoon.

Edited January 22, 2018 by Brewster67

[Brewster67]

12 minutes ago, simoh1490 said:

The likes of Central Festival and its peer group aren't interested in your cakes and snacks, nor are they interested in more noodle stalls! What they are interested in is an array of international brands, top-tier local brands, survival of the fittest will determine which malls survive and which will become enhanced noodle and confectionary outlets.

By the way, I don't know if you have noticed this, but how many 'international brands' have you seen queuing up to trade in Korat?... Apart from the odd McD's and KFC they are pretty much non-existent.

[observer90210]

The more malls, the more competition on prices, and fewer crowds

[samsensam]

1 minute ago, observer90210 said:

The more malls, the more competition on prices, and fewer crowds

 

well yes, but shopping is going online, thailand is behind the curve on this but will catch up, retail companies need to be thinking strategically and investing in e commerce.

[simoh1490]

1 hour ago, plachon said:

I think the "supply and demand" is far more closely related to sources of credit, than anything to do with genuine customer demand. For the past few years, SE Asia in general has been riding on the coat tails of China's remarkable credit-led boom, and vast amounts of cheap loans have been offered to the elites to build infrastructure, such as the shopping malls, on the slimmest of feasibility studies and sense of economic reality. It is becoming a re-run of the pre-1997 Asian crash years, but this time it will be far more global in nature, as it will bring in many Western nations, especially the USA, when this whole bubble bursts and a smidgeon of economic reality reasserts itself again. Thailand, especially, has learned nothing from the 1997 experience, and history is preparing to repeat itself again. Whether the crash will come this year or next, is the main question? 

Absolute rubbish and nonsense, you demonstrate zero understanding of economics and SE Asia!

 

Credit is not even a factor, Thailand operates a trade surplus and has over USD 220 bill. in foreign currency reserves, one of the highest in the world, their ability to drive their exports to high levels, combined with a booming tourist industry means they are virtually credit independent.

[observer90210]

(sorry edit mistake, my appologies)

Edited January 22, 2018 by observer90210

[observer90210]

13 minutes ago, samsensam said:

 

well yes, but shopping is going online, thailand is behind the curve on this but will catch up, retail companies need to be thinking strategically and investing in e commerce.

True what you say for western countries....but e-commerce in Thailand will take quite some time to get trust, as the postal service or the customs efficiency, honesty and integrity,  is not the same as in western nations.

 

A part from this, many malls aim to entertain the spending power of the local hi-so's or the "quality" expats/tourists. Consequently, these groups do not find it necessary to target e-commerce as the hi-so, part time resident Expat/tourist will obviously not make his purchases online.

Edited January 22, 2018 by observer90210

[simoh1490]

1 hour ago, Brewster67 said:

I would say you are totally wrong.... there are more customers in the Korean buffet opposite Central plaza than there are customers in the entire mall... International brands are NOT interested in empty shopping malls with expensive overheads.

 

Do you have any idea at all the cost of trading in Central plaza?

 

It doesn't negate the fact that no customers means no business means they close....

 

At 2PM this afternoon, My wife and I were literally the ONLY 2 people on the main shopping concourse and it isn't much different on a Saturday afternoon.

About five years ago, three new malls were built and opened in Chiang Mai, those in addition to two existing ones. When they opened they were all empty, today they are all mostly booming and three further malls have been constructed, one of which went through the same cycle very quickly. Two out of the three malls now house international brands predominantly, Marks and Spencer, Top Shop, Jaspal, Uniglo, the list grows longer every year. It takes a couple of years before new malls here are populated with stores and customers and the mall owners can afford to wait, build it and they will come is very true in Thailand when it comes to shopping malls.

[Brewster67]

15 minutes ago, observer90210 said:

True what you say for western countries....but e-commerce in Thailand will take quite some time to get trust, as the postal service or the customs efficiency, honesty and integrity,  is not the same as in western nations.

 

A part from this, many malls aim to entertain the spending power of the local hi-so's or the "quality" expats/tourists. Consequently, these groups do not find it necessary to target e-commerce as the hi-so or tourist will obviously not make his purchases online.

While I agree with a lot of your post, I don't see any Hi-so's or 'quality' expats walking around these malls and we deliver to them daily (almost), in fact we hardly see anybody, and we certainly don't see hi-so grade outlets in these malls, almost exclusively Thai stores selling mostly Chinese imported electronics with a few Japanese and Korean sprinkled in or mass produced unbranded clothing.

 

Most of the restaurants are Thai themed and empty.

 

Actually Korat city doesn't have much of a Hi-so population and is going through a major economic slump which also astounds me to see infrastructure springing up which you would usually associate with an area with a vibrant and bustling local economy.... Korat is far from BKK, and the evidence is larger than life when half a dozen outlets close within the first month of the mall opening and the rest sat there completely empty of customers..

Edited January 22, 2018 by Brewster67

[Brewster67]

24 minutes ago, simoh1490 said:

About five years ago, three new malls were built and opened in Chiang Mai, those in addition to two existing ones. When they opened they were all empty, today they are all mostly booming and three further malls have been constructed, one of which went through the same cycle very quickly. Two out of the three malls now house international brands predominantly, Marks and Spencer, Top Shop, Jaspal, Uniglo, the list grows longer every year. It takes a couple of years before new malls here are populated with stores and customers and the mall owners can afford to wait, build it and they will come is very true in Thailand when it comes to shopping malls.

The Mall which was the original in town was opened 15 years ago and used to be bustling..... Now all the others have opened, it lies as dead as the competition... Many shops up for grabs, a half empty food court... they can't give store space away.... So it isn't working here mate.

 

Yet they keep on building and they come...... for about three days.

 

Maybe the future may see an uptick, but I doubt it, or at least is going to take decades, and the question is not about the builders of the malls, but the businesses which open in them only to lose money, go bust.... a mall without shops or outlets is not a mall.

 

No customers > no shops > no mall.... Shops need customers... It isn't rocket science.

Edited January 22, 2018 by Brewster67

[simoh1490]

With all due respect to Korat and it's residents, Nakon Ratchasima is hardly the centre of the tourist universe in Thailand, nor is it the focal point for expat living!

[Brewster67]

3 minutes ago, simoh1490 said:

With all due respect to Korat and it's residents, Nakon Ratchasima is hardly the centre of the tourist universe in Thailand, nor is it the focal point for expat living!

Exactly..... So why fill the place with expensive shopping malls????

[SantiSuk]

Korat seems to be a special case. Ubon Ratchathani is probably 75% of the size of Korat (certainly no less than 50% the size of Korat - you never seem to be able get an accurate handle on populations in Thailand) and is a big regional Isaan centre, same as Korat. Essentially only 2 malls - Central and Sunnee Plaza. Both had poor custom when Central opened about 5 years ago but both now seem to be relatively healthy.

 

I quite liked the street architechture themed on major world capitals at Terminal 21 in Korat and thought that mall was a stand out in terms of regional malls (much better than T21 in Bangkok Asoke IMO, even though smaller). Will be a pity if it drifts into ghost mall status

[simoh1490]

6 hours ago, Brewster67 said:

Exactly..... So why fill the place with expensive shopping malls????

Because over time those malls will start to get utilised, they will eventually fill up with shops and with customers. If someone were to build a mall in the West it would be a totally different story, return on investment, market share, density of population, ground rent tolerance etc would all be factors that are considered. Here, the process is totally different. Companies and individuals, in particular, are cash rich, there's a ton of black money from all over the planet, Chinese Russian and Thai in particular, looking for ways to be spent in Thailand. There's also  a mountain of clean money looking for a long-term investment home because traditional investment markets look very risky these days, simply, there's far too much homeless capital sloshing around the system.

 

Traditional and more certain destinations are now mostly built out, Bangkok, Chiang Mai, Phuket and Pattaya, they're all saturated with new mall developments and the cost of land to build on has skyrocketed as a result. Not so in second and third-tier locations such as issan and upcountry locations where land is still cheap by comparison. Another factor is lifestyle, people no longer walk to local markets and individual shops so much, they want to drive to a single location where air-conditioned shops are clustered and the mall is a perfect solution, especially as days get hotter - those malls you see empty currently won't remain that way for long and the developers know that and they are prepared to wait for their customers. 

[Brewster67]

4 hours ago, SantiSuk said:

Korat seems to be a special case. Ubon Ratchathani is probably 75% of the size of Korat (certainly no less than 50% the size of Korat - you never seem to be able get an accurate handle on populations in Thailand) and is a big regional Isaan centre, same as Korat. Essentially only 2 malls - Central and Sunnee Plaza. Both had poor custom when Central opened about 5 years ago but both now seem to be relatively healthy.

 

I quite liked the street architechture themed on major world capitals at Terminal 21 in Korat and thought that mall was a stand out in terms of regional malls (much better than T21 in Bangkok Asoke IMO, even though smaller). Will be a pity if it drifts into ghost mall status

T21 already has drifted into ghost town status, I would say more than half the shops have closed and either are empty or are re-occupied and they are also giving free incentives such as 2 months free rent to get them filled, the ice rink there i was told has already gone bust as has the one in the Mall.

[plachon]

8 hours ago, simoh1490 said:

Absolute rubbish and nonsense, you demonstrate zero understanding of economics and SE Asia!

 

Credit is not even a factor, Thailand operates a trade surplus and has over USD 220 bill. in foreign currency reserves, one of the highest in the world, their ability to drive their exports to high levels, combined with a booming tourist industry means they are virtually credit independent.

You might disagree with my point of view, but why do you feel the need to lower your self to the level of attacking my intelligence and understanding of the subject? "Zero understanding of economics and SE Asia", eh? Suit yourself, but it's your inability to provide a coherent response that makes your understanding seem rather suspect.

 

How can you seriously say, "credit is not even a factor"? Perhaps you are claiming that the mall developers are using profits they have earned at other shopping malls to build the new malls in Khorat? In which case,  can you provide some evidence of that? I am willing to bet my bottom dollar that they are using credit, that is currently cheap and easy to get hold of as it was pre-1997, to finance these malls. And sooner or later the banks and lenders will need to see some kind of return on their loans. And if the malls are as empty as Brewster claims, then there will not be much servicing of the debt going on and that such a position is only tenable for so long. When this become systemic across the nation, then sooner or later there will be a credit crisis, as there was in 1997, and the whole caboodle will come crashing down, but on a much greater scale than before. 

 

While the baht may not be pegged against the dollar, as it was pre-97, the same underlying factors of uncontrolled credit being doled out for unproductive infrastructure projects are very apparent, in both the state and the private sector, and we are getting near to the point that the bubble will surely burst. Whether it will start with an event in Thailand, China or some other Asian state is debatable, but the conditions are there for another serious bust, after the unsustainable credit-fuelled boom of the last decade. But that's only my POV, based on 27 years of reasonably close scrutiny of the Thai economy and the wider region it is connected to. 

[Brewster67]

2 hours ago, simoh1490 said:

Because over time those malls will start to get utilised, they will eventually fill up with shops and with customers. If someone were to build a mall in the West it would be a totally different story, return on investment, market share, density of population, ground rent tolerance etc would all be factors that are considered. Here, the process is totally different. Companies and individuals, in particular, are cash rich, there's a ton of black money from all over the planet, Chinese Russian and Thai in particular, looking for ways to be spent in Thailand. There's also  a mountain of clean money looking for a long-term investment home because traditional investment markets look very risky these days, simply, there's far too much homeless capital sloshing around the system.

 

Traditional and more certain destinations are now mostly built out, Bangkok, Chiang Mai, Phuket and Pattaya, they're all saturated with new mall developments and the cost of land to build on has skyrocketed as a result. Not so in second and third-tier locations such as issan and upcountry locations where land is still cheap by comparison. Another factor is lifestyle, people no longer walk to local markets and individual shops so much, they want to drive to a single location where air-conditioned shops are clustered and the mall is a perfect solution, especially as days get hotter - those malls you see empty currently won't remain that way for long and the developers know that and they are prepared to wait for their customers. 

One major flaw with your explanation....

 

The mall's customers are actually the retailers, of which many are independent traders with a few Thai national chain groups and an even smaller amount being international names...

 

While the huge mall groups may have the luxury of long term speculation, the fact is that the traders do not and are not going to sit in an empty mall publishing zero tax returns every year and losing money hand over fist.

 

The shops empty, the mall starts to empty, jobs and livelihoods are lost which knocks on to the local economy and the mall soon loses any attraction to customers and thus loses its lure factor.

 

So this snowballs into an exponential effect.

 

Korat is currently not looking good, there is definitely a downward spiral in the economy, we have lost some large companies employing thousands... Like you have pointed out, it has nothing touristic going for it and never really will as far as i can see.

 

As for the Thais suddenly starting to feel the heat of the hot season and making a beeline for the air-conditioned comfort of the malls, Terminal 21 opened over a year ago and died in very short time and the weather didn't improve the prospects for the retailers.

[simoh1490]

39 minutes ago, Brewster67 said:

One major flaw with your explanation....

 

The mall's customers are actually the retailers, of which many are independent traders with a few Thai national chain groups and an even smaller amount being international names...

 

While the huge mall groups may have the luxury of long term speculation, the fact is that the traders do not and are not going to sit in an empty mall publishing zero tax returns every year and losing money hand over fist.

 

The shops empty, the mall starts to empty, jobs and livelihoods are lost which knocks on to the local economy and the mall soon loses any attraction to customers and thus loses its lure factor.

 

So this snowballs into an exponential effect.

 

Korat is currently not looking good, there is definitely a downward spiral in the economy, we have lost some large companies employing thousands... Like you have pointed out, it has nothing touristic going for it and never really will as far as i can see.

 

As for the Thais suddenly starting to feel the heat of the hot season and making a beeline for the air-conditioned comfort of the malls, Terminal 21 opened over a year ago and died in very short time and the weather didn't improve the prospects for the retailers.

I don't know what type of retailer populates malls in Korat but in Chiang Mai there are very very few independent small retailers, we may therefore be talking apples and oranges. The two largest malls in Chiang Mai contain I would guess, less than 5% are small independents, other than in the food halls and those are something that malls offer as a service to customers more than anything else. In the least populated malls, Promenada, small independents are much more in evidence but that's a mall that is reinventing itself by focussing heavily on evening entertainment with live music, an area where the small independent food stalls do well. Even Airport Mall, the second oldest in the city, contains very few small independents (except in the food hall and womens clothing area in the basement) and instead houses established and known businesses, national and international.

[simoh1490]

2 hours ago, plachon said:

You might disagree with my point of view, but why do you feel the need to lower your self to the level of attacking my intelligence and understanding of the subject? "Zero understanding of economics and SE Asia", eh? Suit yourself, but it's your inability to provide a coherent response that makes your understanding seem rather suspect.

 

How can you seriously say, "credit is not even a factor"? Perhaps you are claiming that the mall developers are using profits they have earned at other shopping malls to build the new malls in Khorat? In which case,  can you provide some evidence of that? I am willing to bet my bottom dollar that they are using credit, that is currently cheap and easy to get hold of as it was pre-1997, to finance these malls. And sooner or later the banks and lenders will need to see some kind of return on their loans. And if the malls are as empty as Brewster claims, then there will not be much servicing of the debt going on and that such a position is only tenable for so long. When this become systemic across the nation, then sooner or later there will be a credit crisis, as there was in 1997, and the whole caboodle will come crashing down, but on a much greater scale than before. 

 

While the baht may not be pegged against the dollar, as it was pre-97, the same underlying factors of uncontrolled credit being doled out for unproductive infrastructure projects are very apparent, in both the state and the private sector, and we are getting near to the point that the bubble will surely burst. Whether it will start with an event in Thailand, China or some other Asian state is debatable, but the conditions are there for another serious bust, after the unsustainable credit-fuelled boom of the last decade. But that's only my POV, based on 27 years of reasonably close scrutiny of the Thai economy and the wider region it is connected to. 

A major difference between today's environment and the run-up to '97 is that today all loans are financed in country whereas prior to the crash, businesses were financing expansion with offshore loans denominated in USD which is why the crash happened in the first place, the peg simply couldn't be maintained.

 

The largest single mall developer in Thailand is Central Group which has a huge expansive business that is cash rich and highly profitable, they own the Central, Zen, Robinson, Centara, Office Mate, B2B, Homeworks, PowerBuy, Tops, Supersport brands, as well as a series of lesser known names, PLUS, brands in Europe where they have recently made acquisitions - Central group does not have to rely on earnings from their other malls alone to finance growth!

 

In Chiang Mai at least, one large and fairly new mall was a gift from the owner of a large Thai conglomerate to his daughter, I have no idea how he financed the construction but I rather doubt he took out a bank loan!

 

Thailand Bank NPL's appear to have peaked and are now flat at around 3.7%, the vast majority of them resulting from SME's and consumer loans, failed large business loans are not on the BOT radar. Many of the NPL's result from SME failures as a result of the sluggish economy, a factor that is now forecast to improve and is in evidence:

https://www.reuters.com/article/fitch-thai-bank-performance-weakening-bu/fitch-thai-bank-performance-weakening-but-npl-growth-to-ease-idUSFit65D6wK

 

Finally, the finance model you have in mind is typical of the West, it is not typical of Thailand currently and hasn't been so since the crash of 1997. As said previously, the government runs a trade and budget surplus and debt currently is less than 45% of GDP, a figure they have announced they will increase in order to finance infrastructure build out. Thailand is predominantly a cash society, less than 2% of the populations pays income tax via payroll taxes. Businesses are cash rich and controls over THB and the fact it is not a fully convertible currency restrict cash from being remitted overseas, freely - there are few if any restrictions on the importation of funds into Thailand hence the country is a target for businesses and individuals wishing to invest in the country, without the source of funds being scrutinised too closely. China for example, as you may know, recently took steps to restrict the outflow of cash from that country and the Chinese population in Thailand is vast, as is the Chinese presence in top-tier Thai businesses. Anectdotally, over fifty percent of new homeowners in the area where I live are Chinese, people who bought and built homes for cash. I could continue with this but the evidence is overwhelming, all you need to do is look at it!

 

 

 

 

 

[jacko45k]

Pattaya seems to have done this too, and it is still ongoing with another large development currently underway. We already have a couple that are frequently empty. BigC-X on Klang is still doing well though.

It seems strange to me but personally I have little desire to wander these places and am not much into shopping. A different approach to the UK where they build them out of town with better access and parking facilities than the inner city. Pattaya isn't vehicle friendly and if I remember correctly neither is Korat.

[Brewster67]

1 hour ago, simoh1490 said:

I don't know what type of retailer populates malls in Korat but in Chiang Mai there are very very few independent small retailers, we may therefore be talking apples and oranges. The two largest malls in Chiang Mai contain I would guess, less than 5% are small independents, other than in the food halls and those are something that malls offer as a service to customers more than anything else. In the least populated malls, Promenada, small independents are much more in evidence but that's a mall that is reinventing itself by focussing heavily on evening entertainment with live music, an area where the small independent food stalls do well. Even Airport Mall, the second oldest in the city, contains very few small independents (except in the food hall and womens clothing area in the basement) and instead houses established and known businesses, national and international.

Basically the vast majority of international names in Korat are the food franchises, other than that they are indies or Thai groups, that is across the board pretty much.

 

Korat is a very Thai city... If I were the executive decision maker in these mall groups and we were looking for future sites, I would err on the side of caution, select the site, acquire the land and sit on it till the climate was deserving... Rather than build now, get a reputation amongst the retail trade as a dodgy venue, while the development gets old and tired and have to spend a shed load of money revamping and relaunching it later.

 

One good thing though..... The car parking is heaven.

[SantiSuk]

The pai thee-ow for an air-conditioned day out may be a compensating factor, but investing in on-line retail and home delivery businesses makes more sense than bricks & mortar.

[simoh1490]

6 minutes ago, Brewster67 said:

Basically the vast majority of international names in Korat are the food franchises, other than that they are indies or Thai groups, that is across the board pretty much.

 

Korat is a very Thai city... If I were the executive decision maker in these mall groups and we were looking for future sites, I would err on the side of caution, select the site, acquire the land and sit on it till the climate was deserving... Rather than build now, get a reputation amongst the retail trade as a dodgy venue, while the development gets old and tired and have to spend a shed load of money revamping and relaunching it later.

 

One good thing though..... The car parking is heaven.

Don't underrate the car parking issue, I purposely shop at Promenada mall for that very reason, that and expressway type access. Also, a local branch of Rimping supermarkets here saw its first competition from an unknown about a year ago, everyone thought it was crazy to open another unknown supermarket virtually next to a major established brand. Twelve months on and the mall area has expanded and has lost much of its parking space nearby whilst the new supermarket has plenty that it owns and is now gaining a lot of business as a result.

Edited January 23, 2018 by simoh1490

[Brewster67]

3 minutes ago, simoh1490 said:

Don't underrate the car parking issue, I purposely shop at Promenada mall for that very reason, that and expressway type access. Also, a local branch of Rimping supermarkets here saw its first competition from an unknown about a year ago, everyone thought it was crazy to open another unknown supermarket virtually next to a major established brand. Twelve months on and the mall area has expanded, has lost much of its parking space nearby whilst the new supermarket has plenty that it ownsand is now gaining a lot of business as a result.

The original Mall on a Saturday used to be terrible and you would drive around for ages trying to spot a space, I haven't been there in a while but from what the wife tells me, you can do doughnuts in there :)

[Destiny1990]

Jomtien seaside can use a nice shopmall..

[peterrabbit]

It seems to be part of the Thai psykey that they just copy what someone else has made a success of and thereby oversupply the market so nobody makes any money.

How many times do you see a soi full of the same type of shop. ie Gold shops, pharmacies, noodle stands, 7-11 type stores etc so that the local demand simply cannot support that many outlets and they all end up losing money.

You can see it again and again from noodle stands to shopping malls.

No original thinking going on, just 'copy cats'.