7eleven Or Family Market

[Dirk_brijs]

Wife is looking into opening some sort of mini market on her own. Now the idea interests me as it could be a way of some small income for her. Anyway I found quit some info on what or how to open a 7Eleven but hardly no info on the Family Market side.

Which of the 2 would be the most interesting and profitable or easy to work with?

Thanks for the help

[Morden]

PM me if you would like the benefit of some personal experience.

[Chang_paarp]

Morden

I would really appreciate some real information in the public area, if it is not too personal. We often get this sort of request for information. Yes there will be the folk who have strong opinions about your experience but I would be interested to know your experience.

CP

[PattayaParent]

Why do you need a franchise?

What's wrong with renting a place, putting shelving in and stocking it?

Didn't corner shops exist before the likes of 7-11?

[naka]

I think people like 7-11 and Family Mart because they know what to expect when they walk in

as they are all almost identical.

No reason why a 'private' shop could not provide the same products/service but 7-11 and FM

have a big advantage in that anyone walking/driving down the road will recognise them immediately

and will have a good idea whether or not they sell what they are looking for.

I would guess it must be a fairly good business (in the right location) since there

are so many of them and I have'nt seen many, if any closing down.

No personal experience though, except as a shopper.

Naka.

Edited May 23, 2008 by naka

[stumonster]

in the moobarn I live there has been a family mart for about a year , and now a 7-11 has just opened up across the road and the 7-11 seems a lot more popular and also has a wider range of goods.

Edited May 23, 2008 by stumonster

[monty]

Why do you need a franchise?

What's wrong with renting a place, putting shelving in and stocking it?

Didn't corner shops exist before the likes of 7-11?

One of the big reasons is economy of scale.

7/11 simply has much bigger negotiation power when buying stuff, I can assure you profit margins are higher in a chain which can buy 12,000 loafs of farmhouse bread a day as opposed to your mom and pop store which buys 3 loafs a day.

This is why governments often organize a central buying/distribution system, to give more bargaining power to the mom and pop stores, enabling them to compete at least a little bit with the big hypermarkets!

The big franchises also offer services which are virtually impossible to do by a mom and pop store. Counter service springs to mind. First there is the income from the 10 Baht the shop collects for the service, secondly pretty much everybody I've seen paying their bills also pick up a package of cigarettes or a phone card, or whatever, creating an additional income stream of which you would be amazed how big it is!

[Chang_paarp]

Why do you need a franchise?

Ease of operation. 7-11 offer central buying. In other countries this is not a big issues, but in Thailand you can be dealing with over 50 different suppliers for the basic needs of a minimart. If, as happens often, a product changes wholesalers, you have to first establish that it has moved or if the current stockiest is just out of stock. Having established that they have moved agencies the new one has to be located and an account opened which requires large numbers of dead trees and a lot of time. If you use a central ordering system like those offered by the franchise groups it is their problem. The new agent will seek them out as they are a large organisation.

What's wrong with renting a place, putting shelving in and stocking it?

Nothing wrong there I am doing just that, but as described above there can be a lot of work just getting supplies even if it is regular trips to Teco, BigC, Macro et al. For me a busy shopping day can involve visiting 10 or 12 different shops in Pattaya to get the products I want at a competitive price.

Mine is a niche market in that my target market is people who consume western food and western style products. Getting the passing wholesalers to stop can be a challenge as they are reluctant to jeopardize existing customers by supporting a new shop that might not survive. I am lucky my cashier gets her friend who has a minimart down the road to send them to me.

Didn't corner shops exist before the likes of 7-11?

Yes, and they still exist here in Thailand, but they tend to fade away when a professional retailer move into the area. The unlit place open to the elements with no marked prices does not inspire confidence, this is one of th reasons the 7-11 model works so well here. In many parts of the world the corner shop has all but disappeared due to the emergence of the large shopping malls, although this is reversing in some niche markets.

[PattayaParent]

Why do you need a franchise?

What's wrong with renting a place, putting shelving in and stocking it?

Didn't corner shops exist before the likes of 7-11?

One of the big reasons is economy of scale.

7/11 simply has much bigger negotiation power when buying stuff, I can assure you profit margins are higher in a chain which can buy 12,000 loafs of farmhouse bread a day as opposed to your mom and pop store which buys 3 loafs a day.

This is why governments often organize a central buying/distribution system, to give more bargaining power to the mom and pop stores, enabling them to compete at least a little bit with the big hypermarkets!

The big franchises also offer services which are virtually impossible to do by a mom and pop store. Counter service springs to mind. First there is the income from the 10 Baht the shop collects for the service, secondly pretty much everybody I've seen paying their bills also pick up a package of cigarettes or a phone card, or whatever, creating an additional income stream of which you would be amazed how big it is!

This just reiforces my belief that it's not the likes of Tesco forcing the local mom and pop stores out of business as they claim, it's the 7-11 chain.

[monty]

This just reinforces my belief that it's not the likes of Tesco forcing the local mom and pop stores out of business as they claim, it's the 7-11 chain.

Entirely true!

People don't go to Lotus to pick up a pack of cigarettes, they now go to 7/11. It's those customers which used to frequent your mom and pop store!

[Samuian]

.... it's not the likes of Tesco forcing the local mom and pop stores out of business as they claim, it's the 7-11 chain.

and who owns the franchise rights of t his chain in T.?

And since when it presence has become so overwhelming all over the place?

the smear campaign against Tesco is a campaign to divert the concentration from the real problem as you mentioned towards the "foreign invader"!

[monty]

and who owns the franchise rights of t his chain in T.?

http://www.cpthailand.com/AboutCP/tabid/216/Default.aspx

http://www.cpthailand.com/Default.aspx?tabid=232

[Heng]

Don't cry for the mom and pops. A lot of the surviving stores are underground lottery centers doing a monthly net (with 2 days of "work" each month and 28 days of dusting off nearly non-moving grocery inventory) of anywhere between 50k and 500k.

[think_too_mut]

I think people like 7-11 and Family Mart because they know what to expect when they walk in

as they are all almost identical.

Family Mart are a Japanese company, although very successfull in Japan, they could not get it right in Thailand.

A few months ago I read they were about to close 30% of their outlets.

Just a perspective - if such a giant has admitted their defeat, what's left for the wannabies?

[realmadrid25]

nothing sadder than seeing a middle aged farang try to explain to a thai girl in broken english that he is single and thinks she is pretty.

[keestha]

Wife is looking into opening some sort of mini market on her own. Now the idea interests me as it could be a way of some small income for her. Anyway I found quit some info on what or how to open a 7Eleven but hardly no info on the Family Market side.

Which of the 2 would be the most interesting and profitable or easy to work with?

Thanks for the help

I'm wondering why you don't mention other similar chains than just these two? There are V shop and lemon green, and maybe there are more that I can't think of now. AM/PM I haven't seen in a while, not sure if it still exists.

[PattayaParent]

I'm wondering why you don't mention other similar chains than just these two? There are V shop and lemon green, and maybe there are more that I can't think of now. AM/PM I haven't seen in a while, not sure if it still exists.

I beleive those others you refer to can only be found at petrol stations so are either owned by the petrol company or their franchise?

[bingo2]

I think your best bet will be a 7/11 far superior then any others.

[think_too_mut]

Wife is looking into opening some sort of mini market on her own. Now the idea interests me as it could be a way of some small income for her. Anyway I found quit some info on what or how to open a 7Eleven but hardly no info on the Family Market side.

Which of the 2 would be the most interesting and profitable or easy to work with?

Thanks for the help

Does your wife have minimum HSC and 5+ year of retail experince? No? Then 7-11 won't let her run their outlet.

Search 7-11 in this section, that question pops up every 2-3 months.

Edited May 25, 2008 by think_too_mut

[britmaveric]

nothing sadder than seeing a middle aged farang try to explain to a thai girl in broken english that he is single and thinks she is pretty.

[Heng]

It's important to note that there is no proximity rule in the their franchise terms and if extremely successful, there's nothing to stop them from opening up a CP owned branch nearby to compete with your franchised location. Given, it's usually not blatant like next door or across the street, but a few blocks over is considered fair play in their book.

[think_too_mut]

It's important to note that there is no proximity rule in the their franchise terms and if extremely successful, there's nothing to stop them from opening up a CP owned branch nearby to compete with your franchised location. Given, it's usually not blatant like next door or across the street, but a few blocks over is considered fair play in their book.

In retail industry, opening a shop next door to the existing 2-3 shops is called "clustering" and usually means everybody benefits from that. Not hard to understand why: crowd and frustration in a single shop would make customers defer their purchase until they are somewhere with more choice and speadier service.

In my neighbourhood in Tokyo I have 7-11, Family Mart, Sunkist and Lawson not exactly next to each other but along 70-80 m strip of the same side of the road. Whenever I can I defer my purchasing until I am in that area.

[toptuan]

I don't go to mom & pop stores any more. I'm sick of blowing the dust off a package so I can see the label and sorting through expired goods to find something that won't poison me. Plus, they always charge premium prices, far surpassing 7-11 costs.

[Heng]

(dobro)

Edited May 25, 2008 by Heng

[Heng]

It's important to note that there is no proximity rule in the their franchise terms and if extremely successful, there's nothing to stop them from opening up a CP owned branch nearby to compete with your franchised location. Given, it's usually not blatant like next door or across the street, but a few blocks over is considered fair play in their book.

In retail industry, opening a shop next door to the existing 2-3 shops is called "clustering" and usually means everybody benefits from that. Not hard to understand why: crowd and frustration in a single shop would make customers defer their purchase until they are somewhere with more choice and speadier service.

In my neighbourhood in Tokyo I have 7-11, Family Mart, Sunkist and Lawson not exactly next to each other but along 70-80 m strip of the same side of the road. Whenever I can I defer my purchasing until I am in that area.

Cluster benefits are more pronounced in specialized retail... like all the automotive, electronics, jewelry, etc. shops located in the same area. People cross town and go out of their way to shop there, the retailers sometimes even work together to a minor extent (combining orders, helping with stock shortages or overstocks, and such) and are often on friendly terms.

It's not the same for basic goods like everyday, non-import groceries. All clustering does in those situations is dilute the market share of all involved in the particular area. Given, there will be exceptions as in your case, bypassing a stand alone 7-11 in one area and instead buying from the cluster area 7-11 for whatever reasons you might have.

[think_too_mut]

It's important to note that there is no proximity rule in the their franchise terms and if extremely successful, there's nothing to stop them from opening up a CP owned branch nearby to compete with your franchised location. Given, it's usually not blatant like next door or across the street, but a few blocks over is considered fair play in their book.

In retail industry, opening a shop next door to the existing 2-3 shops is called "clustering" and usually means everybody benefits from that. Not hard to understand why: crowd and frustration in a single shop would make customers defer their purchase until they are somewhere with more choice and speadier service.

In my neighbourhood in Tokyo I have 7-11, Family Mart, Sunkist and Lawson not exactly next to each other but along 70-80 m strip of the same side of the road. Whenever I can I defer my purchasing until I am in that area.

Cluster benefits are more pronounced in specialized retail... like all the automotive, electronics, jewelry, etc. shops located in the same area. People cross town and go out of their way to shop there, the retailers sometimes even work together to a minor extent (combining orders, helping with stock shortages or overstocks, and such) and are often on friendly terms.

It's not the same for basic goods like everyday, non-import groceries. All clustering does in those situations is dilute the market share of all involved in the particular area. Given, there will be exceptions as in your case, bypassing a stand alone 7-11 in one area and instead buying from the cluster area 7-11 for whatever reasons you might have.

Why not? It does not dilute the market share - it brings more people overall and does even balancing of steady workload for all. Just imagine the difference when 3-4 buses empty their load at single 7-11 or at the cluster of shops.

There are rare things I would prefer to buy at 7-11 rather than at Family Mart or that one carries while other don't.

You don't buy car parts or hardware every day, when you need that it's worth going to a dedicated street.

With groceries and basic necessities 2-3-4 shops at one place do not constitute a "a car tyres avenue" and can be replicated anywhere at any time, whenever you have a 2-3 thousand people gravitating to the same centre.

That simple idea is behind concentrating many small restaurants in food courts.

[Heng]

It's important to note that there is no proximity rule in the their franchise terms and if extremely successful, there's nothing to stop them from opening up a CP owned branch nearby to compete with your franchised location. Given, it's usually not blatant like next door or across the street, but a few blocks over is considered fair play in their book.

In retail industry, opening a shop next door to the existing 2-3 shops is called "clustering" and usually means everybody benefits from that. Not hard to understand why: crowd and frustration in a single shop would make customers defer their purchase until they are somewhere with more choice and speadier service.

In my neighbourhood in Tokyo I have 7-11, Family Mart, Sunkist and Lawson not exactly next to each other but along 70-80 m strip of the same side of the road. Whenever I can I defer my purchasing until I am in that area.

Cluster benefits are more pronounced in specialized retail... like all the automotive, electronics, jewelry, etc. shops located in the same area. People cross town and go out of their way to shop there, the retailers sometimes even work together to a minor extent (combining orders, helping with stock shortages or overstocks, and such) and are often on friendly terms.

It's not the same for basic goods like everyday, non-import groceries. All clustering does in those situations is dilute the market share of all involved in the particular area. Given, there will be exceptions as in your case, bypassing a stand alone 7-11 in one area and instead buying from the cluster area 7-11 for whatever reasons you might have.

Why not? It does not dilute the market share - it brings more people overall and does even balancing of steady workload for all. Just imagine the difference when 3-4 buses empty their load at single 7-11 or at the cluster of shops.

There are rare things I would prefer to buy at 7-11 rather than at Family Mart or that one carries while other don't.

You don't buy car parts or hardware every day, when you need that it's worth going to a dedicated street.

With groceries and basic necessities 2-3-4 shops at one place do not constitute a "a car tyres avenue" and can be replicated anywhere at any time, whenever you have a 2-3 thousand people gravitating to the same centre.

That simple idea is behind concentrating many small restaurants in food courts.

The difference is that people don't gravitate to shops selling the exact same thing... but they will gravitate to areas where shops sell nearly but not the exactly the same thing.

Imagine if there were a couple or even several of 7-11's in the same area (in fact in many cases this doesn't have to be imagined)... people wouldn't cross town or leave an area with fewer or even one 7-11 to go to an area with more 7-11's just for the atmosphere. The service or products, and most certainly cooperation between sellers do not get better in any way.

Food courts are different in that they offer similar but not exactly the same fare, offering more variety to the consumer. It's the same for tire shops (very rarely do you have a shop that stocks all available tire sizes and models... usually drawing from main wholesale stocks located nearby... one of the main reasons for tire shop clusters), gold shops (different designs and different stock availability in size and number of nuggets for example), electronics (different models of the particular stereo, or car alarm you're looking for), etc.

Edited May 25, 2008 by Heng

[Ski_Goong]

Don't cry for the mom and pops. A lot of the surviving stores are underground lottery centers doing a monthly net (with 2 days of "work" each month and 28 days of dusting off nearly non-moving grocery inventory) of anywhere between 50k and 500k.

Hey!! Who told you about my money laundering business?

I see a lot of this too. There are 2 "shops" near where I live that gross about 3000-4000 baht a month in sales but net about 100,000 baht a month on the underground lottery.

:0

[think_too_mut]

Imagine if there were a couple or even several of 7-11's in the same area (in fact in many cases this doesn't have to be imagined)... people wouldn't cross town or leave an area with fewer or even one 7-11 to go to an area with more 7-11's just for the atmosphere. The service or products, and most certainly cooperation between sellers do not get better in any way.

Hope someone from 7-11 is reading this. They may pay money for such an insight that proves them wrong.

Their whole global model is wrong and they are unaware of it. I fell for the same trap - just looked intuitivelly right what they believe in and successfully do. Somehow, it even made into school books.

While with NCR, I was in a training course on retail - they also teach the same wrong thing. That's where I picked it up.

C'mon Heng, why is it so hard to understand that money is walking past in peoples pockets and wallets. One shop can't extract it all or at least people won't be queing for that. Next shop would take thair share, next theirs...but there is a limit and convenience stores companies know that. That is how Family Mart can open next to 7-11 and both live well. Startegically positioned, even on all 4 corners of the same intersection, they would all enjoy brisk trade. If there is no shop on 1 of 4 corners, that location is just wasting it's potential without really making many people cross the road and shop in the existing ones.

Before all, they are called "convenience" stores for a reason. To be handy, on your way, cool, clean, fast and have what you are likely to need.

Edited May 25, 2008 by think_too_mut

[Heng]

Imagine if there were a couple or even several of 7-11's in the same area (in fact in many cases this doesn't have to be imagined)... people wouldn't cross town or leave an area with fewer or even one 7-11 to go to an area with more 7-11's just for the atmosphere. The service or products, and most certainly cooperation between sellers do not get better in any way.

Hope someone from 7-11 is reading this. They may pay money for such an insight that proves them wrong.

Their whole global model is wrong and they are unaware of it. I fell for the same trap - just looked intuitivelly right what they believe in and successfully do. Somehow, it even made into school books.

While with NCR, I was in a training course on retail - they also teach the same wrong thing. That's where I picked it up.

C'mon Heng, why is it so hard to understand that money is walking past in peoples pockets and wallets. One shop can't extract it all or at least people won't be queing for that. Next shop would take thair share, next theirs...but there is a limit and convenience stores companies know that. That is how Family Mart can open next to 7-11 and both live well. Startegically positioned, even on all 4 corners of the same intersection, they would all enjoy brisk trade. If there is no shop on 1 of 4 corners, that location is just wasting it's potential without really making many people cross the road and shop in the existing ones.

Before all, they are called "convenience" stores for a reason. To be handy, on your way, cool, clean, fast and have what you are likely to need.

I think what you're doing is just applying the whole cluster concept (which certainly works in certain situations as mentioned) to the wrong type of business.

And I didn't say it was bad for CP to open up another 7-11 near an existing franchisee's 7-11. I said it was bad for the original franchisee. The franchisee would have been paying royalties on gross sales to CP 7-11 as it is... depending on which plan they chose... let's say it's 45%. CP 7-11's new branch wouldn't have to split any of the gross with anyone. So it's all good for CP 7-11. For the franchisee, the new branch doesn't do anything other than provide an identical twin competitor. An additional Family Mart, V Shop, and/or Fresh Mart doesn't increase the volume of people in the area either, it just equally (at best) divides the total foot traffic + revenue between all shops. Yes, often there is enough traffic for all to live well as you say.