Observations: Boom in Mega Home / House Stores... Sustainable?

[JDGRUEN]

I have been observing the Boom in the Huge Home / House Stores in Udon Thani. A quick count shows HomePro, Home Mart, Living Mall, Global House, Tool Pro, Do Home, Home Hub and another Global House and a new Mega Home in Nong Khai ... sharing the market. I am sure I missed seeing some others, And of course there are also a large number of stores specializing in ceramic tile, concrete products, water storage tanks, etc. to add to the competition.

It seems that this huge array of merchandise could find itself going wanting for customers at some point ... Maybe the boom will turn to a bust? I pass by many of the stores and have gone into several... Often it seems that the number of retail clerks outnumber the customers. At Do Home and Home Hub the parking lot seems only sparsely populated every time I go by.

After reviewing the population and income statistics for the Greater Udon Thani area (link below) and for Nong Khai, I am wondering where the disposable income is going to come from that will allow the general Thai population to buy all these goods?

http://knoema.com/atlas/Thailand/Udon-Thani-Province/

From what I read this buildup ... 'boom' is going on all over Thailand in the bigger metropolitan areas. I am only curious as having just come from the U.S. a couple of months ago I don't see how this type of overlapping and redundant merchandising can be sustained. Perhaps there are foreign investors (China / Japan) who are fueling this boom as an outlet for merchandise?

I hope to get feedback from TVF members who are more seasoned and experienced in Thailand who might be able to shed some light on factors I am not aware of... what aspect of this 'boom' am I missing? How long has this buildup been going on?

Observations: Boom in Mega Home / House Stores... Sustainable?

This is not something that concerns me a great deal ... I'm just curious. Being retired, I have time to ponder about such things.

[Costas2008]

A new Global House has opened in Ban Phai, near where I live.

Whenever I go there, the store is empty, full of employees, following you around.

In Ban Phai there are about 100 similar shops, not a big as Global House, but with a similar range of products.

I did also wonder what kind of research Global House did before opening the store and also seeing the current economic situation I doubt there is a boom and high demand for house products.

But again, who am I, to judge?

[JDGRUEN]

A new Global House has opened in Ban Phai, near where I live.

Whenever I go there, the store is empty, full of employees, following you around.

In Ban Phai there are about 100 similar shops, not a big as Global House, but with a similar range of products.

I did also wonder what kind of research Global House did before opening the store and also seeing the current economic situation I doubt there is a boom and high demand for house products.

But again, who am I, to judge?

My use of the word 'boom' was meant to describe the buildup / rollout of these huge stores - not a boom in sales to customers...

Your observations seem to confirm mine ... lots of stores, lots of retail clerks, lots of merchandise -- not so many customers... Market research before opening a store seems to have not been done.

[thailiketoo]

Thailand has way too many non technical college graduates with degrees in things like critical thinking instead of plumbing and construction. These graduates need a place to stand during the day and brand names in home supply hire them to stand in mega home stores.

Many Thai college students don't work while in college so they are only qualified to stand around looking critically at things after graduation. Normally these students would get jobs in boiler rooms right out of school but they can't speak English well enough to take advantage of their Business admin or marketing degrees.

The brands compete for these standing students because it is considered more important to have more employees. The stores don't care because only the maintenance men and cashiers are on the mega store's payroll.

Eventually the strategy will pay off as the standing students will earn enough to buy starter homes and need to buy the products from other standing students in the mega stores.

Kind of like the critical thinking demonstrated by Henry Ford when he made an auto and paid his workers enough to buy it.

I think it is called velocity of money. 1000 baht is paid to a standing student who then pays that 1000 to the bank who loans him 10,000 baht. 9000 for a mortgage and 1000 for furnishings. The standing student homeowner then pays 1000 to the mega store for furnishings covering his initial 1000 in wages. (The numbers are of course larger I just used 1000 to demonstrate the principle)

[Berkshire]

A new Global House has opened in Ban Phai, near where I live.

Whenever I go there, the store is empty, full of employees, following you around.

In Ban Phai there are about 100 similar shops, not a big as Global House, but with a similar range of products.

I did also wonder what kind of research Global House did before opening the store and also seeing the current economic situation I doubt there is a boom and high demand for house products.

But again, who am I, to judge?

My use of the word 'boom' was meant to describe the buildup / rollout of these huge stores - not a boom in sales to customers...

Your observations seem to confirm mine ... lots of stores, lots of retail clerks, lots of merchandise -- not so many customers... Market research before opening a store seems to have not been done.

I would imagine most of their customers are businesses including homebuilders and the like, not retail walk-in customers. Did you factor that in before discussing your "market research?"

[Showbags]

In the town near where we live...a small shop has just opened a huge shop and I kid you not, it is bigger than HomePro.

and..we have a Homepro...plus at least a dozen other shops of varying sizes.

This in a town that takes perhaps 10 minutes to drive through, including traffic light stops.

[NancyL]

Thailand has way too many non technical college graduates with degrees in things like critical thinking instead of plumbing and construction. These graduates need a place to stand during the day and brand names in home supply hire them to stand in mega home stores.

Many Thai college students don't work while in college so they are only qualified to stand around looking critically at things after graduation. Normally these students would get jobs in boiler rooms right out of school but they can't speak English well enough to take advantage of their Business admin or marketing degrees.

The brands compete for these standing students because it is considered more important to have more employees. The stores don't care because only the maintenance men and cashiers are on the mega store's payroll.

Eventually the strategy will pay off as the standing students will earn enough to buy starter homes and need to buy the products from other standing students in the mega stores.

Kind of like the critical thinking demonstrated by Henry Ford when he made an auto and paid his workers enough to buy it.

I think it is called velocity of money. 1000 baht is paid to a standing student who then pays that 1000 to the bank who loans him 10,000 baht. 9000 for a mortgage and 1000 for furnishings. The standing student homeowner then pays 1000 to the mega store for furnishings covering his initial 1000 in wages. (The numbers are of course larger I just used 1000 to demonstrate the principle)

Ah, this explains why the new Power Buy store in Chiang Mai is organized the way it is. Their "staff" doesn't actually work for Power Buy, but for the manufacturers. This store specializes in appliances & electronics.

Hubby and some of his friends recently took on a new hobby "The Meat Club for Guys" -- at least that's what I call it. Every three weeks or so, they spend a day smoking meat or making sausage. Turns out they're pretty good at it, but their production has outstripped the capacity of my refrigerator's freezer compartment. So I thought I'd go to the new Power Buy store and see if they sold stand-alone freezer units. I figured we'd have to buy one of those small, chest-style freezer units, with glass-sliding doors like you see used in Ma-and-Pa stores.

What I found was one section with all the Samsung appliances, one section with all the Mitsubishi appliances, etc. In each section the washers, dryers, refrigerators, water heaters, fans, dishwashers -- just about everything but the electronics -- would be next to each other. Now, when I'm in a mood to look at freezers, the last thing I want to see are hot water heaters! Furthermore, I had to go to every section and ask if they had a freezer for sale (mai mee) What about elsewhere in the store? (blank look) I got my exercise that day, trotting around the entire store looking at every grouping of appliances. Turns out there wasn't a single stand-alone freezer in the place!

I found a couple available in Siam TV -- guess where -- in the department where they have commercial-style glass-door refrigerators. You know the ones used in Ma-and-Pa stores. Who would have thought to put the freezers next to the refrigerators? What a concept!

[thailiketoo]

Thailand has way too many non technical college graduates with degrees in things like critical thinking instead of plumbing and construction. These graduates need a place to stand during the day and brand names in home supply hire them to stand in mega home stores.

Many Thai college students don't work while in college so they are only qualified to stand around looking critically at things after graduation. Normally these students would get jobs in boiler rooms right out of school but they can't speak English well enough to take advantage of their Business admin or marketing degrees.

The brands compete for these standing students because it is considered more important to have more employees. The stores don't care because only the maintenance men and cashiers are on the mega store's payroll.

Eventually the strategy will pay off as the standing students will earn enough to buy starter homes and need to buy the products from other standing students in the mega stores.

Kind of like the critical thinking demonstrated by Henry Ford when he made an auto and paid his workers enough to buy it.

I think it is called velocity of money. 1000 baht is paid to a standing student who then pays that 1000 to the bank who loans him 10,000 baht. 9000 for a mortgage and 1000 for furnishings. The standing student homeowner then pays 1000 to the mega store for furnishings covering his initial 1000 in wages. (The numbers are of course larger I just used 1000 to demonstrate the principle)

Ah, this explains why the new Power Buy store in Chiang Mai is organized the way it is. Their "staff" doesn't actually work for Power Buy, but for the manufacturers. This store specializes in appliances & electronics.

Hubby and some of his friends recently took on a new hobby "The Meat Club for Guys" -- at least that's what I call it. Every three weeks or so, they spend a day smoking meat or making sausage. Turns out they're pretty good at it, but their production has outstripped the capacity of my refrigerator's freezer compartment. So I thought I'd go to the new Power Buy store and see if they sold stand-alone freezer units. I figured we'd have to buy one of those small, chest-style freezer units, with glass-sliding doors like you see used in Ma-and-Pa stores.

What I found was one section with all the Samsung appliances, one section with all the Mitsubishi appliances, etc. In each section the washers, dryers, refrigerators, water heaters, fans, dishwashers -- just about everything but the electronics -- would be next to each other. Now, when I'm in a mood to look at freezers, the last thing I want to see are hot water heaters! Furthermore, I had to go to every section and ask if they had a freezer for sale (mai mee) What about elsewhere in the store? (blank look) I got my exercise that day, trotting around the entire store looking at every grouping of appliances. Turns out there wasn't a single stand-alone freezer in the place!

I found a couple available in Siam TV -- guess where -- in the department where they have commercial-style glass-door refrigerators. You know the ones used in Ma-and-Pa stores. Who would have thought to put the freezers next to the refrigerators? What a concept!

Samsung hires and pays the sales people. Get it?

[JDGRUEN]

A new Global House has opened in Ban Phai, near where I live.

Whenever I go there, the store is empty, full of employees, following you around.

In Ban Phai there are about 100 similar shops, not a big as Global House, but with a similar range of products.

I did also wonder what kind of research Global House did before opening the store and also seeing the current economic situation I doubt there is a boom and high demand for house products.

But again, who am I, to judge?

My use of the word 'boom' was meant to describe the buildup / rollout of these huge stores - not a boom in sales to customers...

Your observations seem to confirm mine ... lots of stores, lots of retail clerks, lots of merchandise -- not so many customers... Market research before opening a store seems to have not been done.

I would imagine most of their customers are businesses including homebuilders and the like, not retail walk-in customers. Did you factor that in before discussing your "market research?"

I did wonder if the Big Home Stores gave a discount to home builders same as they do in the U.S. but I don't consider my pondering and looking at the population and income stats as to be doing any real 'market research'. I am in hopes that discounted sales to home builders will result in a wider and better array of products for the new home owners.

[Briggsy]

For the last 30 years, most Thai families lived in a scabby hovel with no furniture with a whacking great pick-up out the front worth more than the house. It couldn't go on forever. Not with the brainwashing soaps and their luxurious houses being beamed into every house (hovel) every night.