What kind of income can you expect from a tourist-driven SME in Chiang Mai?

[TheSiemReaper]

When I visit the more expensive bars in Nimman - it's Thais who are sat there with 300 Baht beers while the farang are pretty much invisible and so on...

Coffee shops are open during the day,

When Thais who can afford 300bht beers are working.

Do you see the error in your business plan?

Now the wealthy Bangkok Thais visiting CM on holiday, who have time to drink coffee in the day, would go somewhere like Sala Cafe in Mae Rim.

Spectacular mountain views, manicured classic Thai gardens, coffee 65bht, food 65bht.

sala.JPG

I pay 65bht for a coffee there, and buy lunch, but not every day.

Not my business plan - I'd never be so foolish as to go into Bricks and Mortar in SE Asia. But, are you telling me that Starbucks is empty all day long? Where a coffee costs considerably more than 50 Baht? Of course not. You may find 65 baht for a coffee a problem - lots and lots of Thais do not - at any time of day.

[bangmai]

There are a few Thais doing the 300 THB beers in the Nimman area...I think I know which place you are talking about. They were playing rap music the other night. There are generally 20 time more Thais down the street drinking 60 THB large, on any given night,,,,maybe 30-40 times more for a big EPL match-up. The myth is that there are lots of middle class Thais with money to burn...the reality is that median household income in Northern Thailand is barely 25000 THB per month. We'll see if the 300 THB beer place lasts the rest of the year...the reviews indicate as many difficulties as one would find in a place selling four large for 200, like the Dayli, just started with the Singha Light...the big promos seem to be starting pretty early this year. Bring on the smoke, bye-bye people pushing baby strollers down Nimman, and other sidewalk blockers.

Edited February 11, 2016 by bangmai

[MaeJoMTB]

Not my business plan - I'd never be so foolish as to go into Bricks and Mortar in SE Asia. But, are you telling me that Starbucks is empty all day long? Where a coffee costs considerably more than 50 Baht? Of course not. You may find 65 baht for a coffee a problem - lots and lots of Thais do not - at any time of day.

Starbucks is different, it's a lifestyle choice rather than a coffee shop.

Promoted by $$$$$Ms of advertising.

It's like comparing a road side '5 star chicken' stall to KFC.

Or a mom and pop grocery shop to 7-11.

[MaeJoMTB]

There are a few Thais doing the 300 THB beers in the Nimman area...I think I know which place you are talking about. They were playing rap music the other night. THere are generally 20 time more Thais down the street drinking 60 THB large, on any given night,,,,maybe 30-40 times more for a big EPL matchup. The myth is that there are lots of middle class Thais with money to burn...the reality is that median household income in Northern Thailand is barely 25000 THB per month. We'll see if 300 THB beer place lasts the rest of the year...the reviews indicate as many difficulties as one would find in a place selling four large for 200, like the Dayli, just started with the Singha Light...the big promos seem to be starting pretty early this year. Bring on the smoke, bye-bye people pushing baby strollers down Nimman, and other sidewalk blockers.

Not to mention the 4 large Tigers for 200bht in T-Bar, served by 25 hot girls in short shorts and beer dresses.

Busy most nights.

[TheSiemReaper]

There are a few Thais doing the 300 THB beers in the Nimman area...I think I know which place you are talking about. They were playing rap music the other night. THere are generally 20 time more Thais down the street drinking 60 THB large, on any given night,,,,maybe 30-40 times more for a big EPL matchup. The myth is that there are lots of middle class Thais with money to burn...the reality is that median household income in Northern Thailand is barely 25000 THB per month. We'll see if 300 THB beer place lasts the rest of the year...the reviews indicate as many difficulties as one would find in a place selling four large for 200, like the Dayli, just started with the Singha Light...the big promos seem to be starting pretty early this year. Bring on the smoke, bye-bye people pushing baby strollers down Nimman, and other sidewalk blockers.

Lol. No rap music at all. Beer Lab and Beer Republic are packed with Thais every single night. Stop kidding yourself - you don't base a business plan on median income; you base it on a target market and their disposable income and access to that market. Chiang Mai is the 2nd largest city in Thailand, which in turn is a middle income nation - did you really think that young Thais, with wealthy parents, wouldn't emulate the Western behaviour they see on TV?

[TheSiemReaper]

Not my business plan - I'd never be so foolish as to go into Bricks and Mortar in SE Asia. But, are you telling me that Starbucks is empty all day long? Where a coffee costs considerably more than 50 Baht? Of course not. You may find 65 baht for a coffee a problem - lots and lots of Thais do not - at any time of day.

Starbucks is different, it's a lifestyle choice rather than a coffee shop.

Promoted by $$$$$Ms of advertising.

It's like comparing a road side '5 star chicken' stall to KFC.

Or a mom and pop grocery shop to 7-11.

No, it's all about marketing. Starbucks is an aspirational brand in Asia but there's nothing to stop someone from creating a similar aspirational effect on a local level - the next Starbucks has to start somewhere. People might even try, you know, market research and talking to their customers, working out what the demographic is and what it wants before going into business - something that might just position them to succeed rather than harp on suspect "truisms" on ThaiVisa.

[bangmai]

They were playing rap music at 'Republic the other night. At 7pm, them and the place next door will have about 10 customers. Read the reviews....I personally have no beefs with the manager, but many do. 20 USD for a Vodka Coke and a G & T....wouldn't thrill me at Reagan National Airport lounge with an average income 10x that of CM.

[TheSiemReaper]

They were playing rap music at 'Republic the other night. At 7pm, them and the place next door will have about 10 customers. Read the reviews....I personally have no beefs with the manager, but many do. 20 USD for a Vodka Coke and a G & T....wouldn't thrill me at Reagan National Airport lounge with an average income 10x that of CM.

And at 9 p.m. you won't be able to find a seat most nights. It doesn't matter who has beef. They're selling beer at high margins all night long. It's a good business model (and the beer is pretty darned good too - I have no issue with 300 Baht for an imported beer, though I do find the service charge tacked on to be a bit sneaky).

[bangmai]

I've walked by there more than 100 times, in the evenings....business is spotty at best. Never seen anything worth stopping for. A friend was here last week, with deep pockets, and he told me he went to BR last April with his GF, and thought it was an overpriced joke/tourist trap. He did want to return to Dayli for Heinekens.

[Schillaci]

Even starbucks isnt invinsible. 143 million in losses and 60 stores closed in oz.

[TheSiemReaper]

I've walked by there more than 100 times, in the evenings....business is spotty at best. Never seen anything worth stopping for. A friend was here last week, with deep pockets, and he told me he went to BR last April with his GF, and thought it was an overpriced joke/tourist trap. He did want to return to Dayli for Heinekens.

Well, I've actually been in there more than 30 times and it's always packed. So, whether it appeals to you or not is moot. It does a roaring trade and the Thais I've been there with, like it and go back again too. It's not about deep pockets, it's about paying for quality of experience - yes, you can always buy a Chang for 50/60 Baht somewhere but so what? I quite like a bit of street food and a cheap beer on the side of Nimman too - but I also quite like going somewhere with a live band, great food served on actual plates and beer that isn't a chemical factory on steroids. There's room for both.

Building a business is all about catering to a need or creating a perceived need - I can't afford a Ferrari (and wouldn't even if I could) but that doesn't make a cent's worth of difference to Ferrari which keeps selling cars to people who can and will. Walk down Nimman of a night and look at all the Ducati bikes parked up (almost all Thai owned too) etc. there's no shortage of cash in Chiang Mai even if it's somewhat unfairly distributed. Some places sell to the Ducati owner and some to the guy who can't even afford a cheap moto... as long as there are enough customers, both make a profit.

Edited February 11, 2016 by TheSiemReaper

[TheSiemReaper]

Even starbucks isnt invinsible. 143 million in losses and 60 stores closed in oz.

Starbucks' move into Australia was very telling. Australians don't see Starbucks as an aspirational brand (as they do, in say China) they see it as a commodity brand. So, when given the choice between a cup of coffee from a specialist coffee shop and a commodity coffee shop at roughly the same price - Starbucks loses in the battle for an Australian wallet.

There's probably actually very little difference between coffees in either place... but that doesn't matter, it's how they're perceived by the consumers that matters.

Edited February 11, 2016 by TheSiemReaper

[bangmai]

I've walked by there more than 100 times, in the evenings....business is spotty at best. Never seen anything worth stopping for. A friend was here last week, with deep pockets, and he told me he went to BR last April with his GF, and thought it was an overpriced joke/tourist trap. He did want to return to Dayli for Heinekens.

Well, I've actually been in there more than 30 times and it's always packed. So, whether it appeals to you or not is moot. It does a roaring trade and the Thais I've been there with, like it and go back again too. It's not about deep pockets, it's about paying for quality of experience - yes, you can always buy a Chang for 50/60 Baht somewhere but so what? I quite like a bit of street food and a cheap beer on the side of Nimman too - but I also quite like going somewhere with a live band, great food served on actual plates and beer that isn't a chemical factory on steroids. There's room for both.

Building a business is all about catering to a need or creating a perceived need - I can't afford a Ferrari (and wouldn't even if I could) but that doesn't make a cent's worth of difference to Ferrari which keeps selling cars to people who can and will. Walk down Nimman of a night and look at all the Ducati bikes parked up (almost all Thai owned too) etc. there's no shortage of cash in Chiang Mai even if it's somewhat unfairly distributed. Some places sell to the Ducati owner and some to the guy who can't even afford a cheap moto... as long as there are enough customers, both make a profit.

Heineken/Tiger is a far cry from Chang, which is just about undrinkable. 50 THB large Tigers in Santitham....What happened to HOBs?

Edited February 11, 2016 by bangmai

[TheSiemReaper]

I've walked by there more than 100 times, in the evenings....business is spotty at best. Never seen anything worth stopping for. A friend was here last week, with deep pockets, and he told me he went to BR last April with his GF, and thought it was an overpriced joke/tourist trap. He did want to return to Dayli for Heinekens.

Well, I've actually been in there more than 30 times and it's always packed. So, whether it appeals to you or not is moot. It does a roaring trade and the Thais I've been there with, like it and go back again too. It's not about deep pockets, it's about paying for quality of experience - yes, you can always buy a Chang for 50/60 Baht somewhere but so what? I quite like a bit of street food and a cheap beer on the side of Nimman too - but I also quite like going somewhere with a live band, great food served on actual plates and beer that isn't a chemical factory on steroids. There's room for both.

Building a business is all about catering to a need or creating a perceived need - I can't afford a Ferrari (and wouldn't even if I could) but that doesn't make a cent's worth of difference to Ferrari which keeps selling cars to people who can and will. Walk down Nimman of a night and look at all the Ducati bikes parked up (almost all Thai owned too) etc. there's no shortage of cash in Chiang Mai even if it's somewhat unfairly distributed. Some places sell to the Ducati owner and some to the guy who can't even afford a cheap moto... as long as there are enough customers, both make a profit.

Heineken/Tiger is a far cry from Chang, which is just about undrinkable. 50 THB large Tigers in Santitham....What happened to HOBs?

Honestly? Heineken and Tiger are a far cry from decent lager in my book too. Czech, German and Belgian lagers (with a modest nod to Japan) are good beers (in general). Though as a Brit, I prefer a pint of ale to a pint of a lager anyway.

[bangmai]

German beers are often better than Tiger, but no way in Hell worth 500% more....not even double. Most of the premium price is going to the Excise Department. Are Ales really suitable for the upcoming 37C days? By the time the Czech draft beers arrive to CM, they taste metallic, with a nice splash of Benzene. Glad to see the Brits are such sophisticated drinkers...http://www.dailymail.co.uk/news/article-2955934/Inside-fake-alcohol-distillery-Plant-bottling-counterfeit-vodka-raided-police-seized-2-500-litres-fake-wine-spirits.html....but seriously, if you all would stop accepting warm ones, and putting ice in it, like you were in an African refugee camp; a nice cold Tiger would really hit the spot....and it's 5.0 here, not the 4.8 they try to tame you with in England.

Edited February 11, 2016 by bangmai

[fey]

Not my business plan - I'd never be so foolish as to go into Bricks and Mortar in SE Asia. But, are you telling me that Starbucks is empty all day long? Where a coffee costs considerably more than 50 Baht? Of course not. You may find 65 baht for a coffee a problem - lots and lots of Thais do not - at any time of day.

Starbucks is different, it's a lifestyle choice rather than a coffee shop.

Promoted by $$$$$Ms of advertising.

It's like comparing a road side '5 star chicken' stall to KFC.

Or a mom and pop grocery shop to 7-11.

No, it's all about marketing. Starbucks is an aspirational brand in Asia but there's nothing to stop someone from creating a similar aspirational effect on a local level - the next Starbucks has to start somewhere. People might even try, you know, market research and talking to their customers, working out what the demographic is and what it wants before going into business - something that might just position them to succeed rather than harp on suspect "truisms" on ThaiVisa.

that would be like winning the lottery, could happen but it's a pipe dream.

plus, the typical expat has far more important things on his mind then market research.

[totally thaied up]

We went to a bar the other night near Maya and their were Thais by the dozens swishing down Euro style at 240 baht a glass. About a year ago, we went to the same bar and it was similar experience. I tried one of the beers and almost threw up!

We know within our business model that there are Thais that like to look good (the girls) and they will spend money (Mum and Dads) to do this. We might sometimes at a bare minimum get 2 girls walk though our doors a day that are higher class but there spend rate is high. Our conversion rate is 96% of who walks through our doors spend money. Other days we get the cheaper Uni girls come in (spend rate at 400 upwards per girl) but in these cases, we generally get a lot more then 5 every day. Mummy and Daddy of those in a higher class give a lot of money to their Thai University daughters. The amount of young girls showing up to our shop on Red Vespa's over the 100K mark has surprised me in fact.

Chiang Mai is a big city and it has surprised me in many ways. People do have serious money here but you have to market towards them.

[TheSiemReaper]

Not my business plan - I'd never be so foolish as to go into Bricks and Mortar in SE Asia. But, are you telling me that Starbucks is empty all day long? Where a coffee costs considerably more than 50 Baht? Of course not. You may find 65 baht for a coffee a problem - lots and lots of Thais do not - at any time of day.

Starbucks is different, it's a lifestyle choice rather than a coffee shop.

Promoted by $$$$$Ms of advertising.

It's like comparing a road side '5 star chicken' stall to KFC.

Or a mom and pop grocery shop to 7-11.

No, it's all about marketing. Starbucks is an aspirational brand in Asia but there's nothing to stop someone from creating a similar aspirational effect on a local level - the next Starbucks has to start somewhere. People might even try, you know, market research and talking to their customers, working out what the demographic is and what it wants before going into business - something that might just position them to succeed rather than harp on suspect "truisms" on ThaiVisa.

that would be like winning the lottery, could happen but it's a pipe dream.

plus, the typical expat has far more important things on his mind then market research.

Which is why the typical expat is broke and always whining about the cost of everything. Market research is the key to running a successful business and the lack of it is why so many typical expat businesses fail.

[fey]

they could not be doing that well

my expat neighbor runs a bar across the way and they yell out at every person walking by just to get a few in for a 60 baht beer

[JaseTheBass]

There are a few Thais doing the 300 THB beers in the Nimman area...I think I know which place you are talking about. They were playing rap music the other night. THere are generally 20 time more Thais down the street drinking 60 THB large, on any given night,,,,maybe 30-40 times more for a big EPL matchup. The myth is that there are lots of middle class Thais with money to burn...the reality is that median household income in Northern Thailand is barely 25000 THB per month. We'll see if 300 THB beer place lasts the rest of the year...the reviews indicate as many difficulties as one would find in a place selling four large for 200, like the Dayli, just started with the Singha Light...the big promos seem to be starting pretty early this year. Bring on the smoke, bye-bye people pushing baby strollers down Nimman, and other sidewalk blockers.

Lol. No rap music at all. Beer Lab and Beer Republic are packed with Thais every single night. Stop kidding yourself - you don't base a business plan on median income; you base it on a target market and their disposable income and access to that market. Chiang Mai is the 2nd largest city in Thailand, which in turn is a middle income nation - did you really think that young Thais, with wealthy parents, wouldn't emulate the Western behaviour they see on TV?

BeerLab is a ghost of what it was 2 years ago (Hobs). We used to struggle to get a seat in there and since the take-over and price rises it never seems to get over half full.

Sent from my R2D2 using my C3P0 manservant

[JaseTheBass]

I've walked by there more than 100 times, in the evenings....business is spotty at best. Never seen anything worth stopping for. A friend was here last week, with deep pockets, and he told me he went to BR last April with his GF, and thought it was an overpriced joke/tourist trap. He did want to return to Dayli for Heinekens.

Crap lager drinkers are not BR's target audience.

Sent from my R2D2 using my C3P0 manservant

Edited March 29, 2016 by JaseTheBass

[fey]

how much profit does a bar make on a large 60 baht leo?

probably not more then 30 baht (less then a dollar)

are you able to sit 10 people into your space during the prime time evening hours (10:00 - 24:00) to even make it worthwhile?

many of those who do arrive will linger and nurse that beer for hours, especially if there are female staff around or wifi.

[mesquite]

What's an SME?

[JaseTheBass]

What's an SME?

Small to medium enterprise?

[WhiteCadillac]

If your plan is to buy yourself a job, then I would advice against it.