The Korat Mall - How do the shops survive

[Once Bitten]

While wondering around the Mall ,  It amazes me how some shops can manage to stay open , shops like opticians all ways seem to be empty ,  the high end clothes shops seem to have permanent Sale / 50% off signs plastered in their windows and still very few apparent customers in side , the large glass fronted bedding and furniture shops look over staffed but still there seems a constant lack of customers . Walking thought the open sales area containing vast amounts of branded beauty products / handbags / shoes / watches / clothing , again I never actually see any one purchasing any thing there ,

Some gold shops seem to have customers , some times , but some other jewelry shops look permanently empty , wander around the white electrical goods / computers / TV / open area and its an endless sea of sales staff dressed in black and very few customers , the list goes on and on of shops who never seem to have any customers .

 

You have to wonder how these apparent constantly empty shops and sales areas survive in the Mall , taking into consideration the no doubt high rent and over heads and even more so now Terminal 21 is  open .  So what am I missing ?

 

[cooked]

Why pick on the Mall? You can find this kind of thing all over Thailand. Many shops that were present at the opening of Robinsons in Buriram have now disappeared, in most malls you will find empty shops.

How about the stalls selling melons for mile after mile, maybe one car stopped along the way...  some people just like the thought of being a shop keeper.

[meatboy]

the op should go and find the secret nocking shop where all the farangs HANG OUT.

[sinbin]

I just think Thais have no sense or forward planning to do a feasibility study before they commit themselves. They seem to think that if they open a shop or start a business then the money will come rolling in. They're dreamers.

[thehelmsman]

There has to be more to it than just bad business sense. Take all the home improvement places as another example, the employees outnumber the customers. It's a mystery.

[mick220675]

I have always wondered how opticians shops all over Thailand stay open. They have at least two staff and very few customers.

[Once Bitten]

There are many scratch your head in wonderment Thailand related mysteries that we all come across , but these shop business that seem to constantly have no or very few customers and must be paying their monthly over heads , and yet they still seem to be open month after month  , is one mystery that makes no sense , I know that some of the shops belong to large retail chain organization and they may be subsidized in some way , but even so you would think in this competitive retail environment , there must come a time when enough is enough and the shop has to close . But how do the small independent retail shops that can be found in all shopping malls keep going when its plainly obvious that they must be suffering from the constant lack of customers and profit , yet they just keep going .
 

Surely you would think that if the shop owner has enough capital to start a business in a shopping mall , they have first done and laid out a business plan / forecast and have the retail knowledge and brains to succeed , before committing them selves to a rental contract .

 

Not far from my house there's been a gang of building workmen , constructing a large row of shuttered front shop houses ,  the investment must be in the millions . Yet directly across the road from this new construction , is a nearly identical row of shop houses that has been there you several years , yet only one of the units there seems to be occupied , the rest remain still empty from day one.  So why would you invest millions in building new shop houses , when across the road stands old empty units that no one seemed to want to rent .

 

Its Beyond me   or what am I missing ?

 

[cooked]

To get a loan from the bank to buy building land, you need to have and carry out a project on that land.

This is all a part of the Thai bubble which some people have been waiting for years to collapse.

[sinbin]

5 hours ago, Once Bitten said:

.

 

Not far from my house there's been a gang of building workmen , constructing a large row of shuttered front shop houses ,  the investment must be in the millions . Yet directly across the road from this new construction , is a nearly identical row of shop houses that has been there you several years , yet only one of the units there seems to be occupied , the rest remain still empty from day one.  So why would you invest millions in building new shop houses , when across the road stands old empty units that no one seemed to want to rent .

 

Its Beyond me   or what am I missing ?

 

That reminds me of the story of the Thai who wanted to open a shop. Before he opened the shop he went along the soi to find out what everyone else was selling. He then went and found a rental unit and proceeded to sell the same as what everyone else was selling. 

[SpokaneAl]

While wondering around the Mall ,  It amazes me how some shops can manage to stay open , shops like opticians all ways seem to be empty ,  the high end clothes shops seem to have permanent Sale / 50% off signs plastered in their windows and still very few apparent customers in side , the large glass fronted bedding and furniture shops look over staffed but still there seems a constant lack of customers . Walking thought the open sales area containing vast amounts of branded beauty products / handbags / shoes / watches / clothing , again I never actually see any one purchasing any thing there ,

Some gold shops seem to have customers , some times , but some other jewelry shops look permanently empty , wander around the white electrical goods / computers / TV / open area and its an endless sea of sales staff dressed in black and very few customers , the list goes on and on of shops who never seem to have any customers .
 
You have to wonder how these apparent constantly empty shops and sales areas survive in the Mall , taking into consideration the no doubt high rent and over heads and even more so now Terminal 21 is  open .  So what am I missing ?
 

I wonder the same thing. All those high end stores that are empty of customers, and now Terminal 21 is open and another mall is coming as well. I also wonder how the local Home Pro stays open with expensive stuff that no one seems to buy and whenever we visit it is virtually empty. A new Macro also just opened and it is also pretty empty, although I must admit that I appreciate the always easy, plentiful parking.

I guess I am just not smart enough to understand the Thai version of basic economics.


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[Once Bitten]

I’m certainly no retail sales expert but when I recently wandered around the Korat Disney Land , sorry Terminal 21 , the thing that struck me was just how many empty open public floor spaces there were , along with large areas filled with with endless huge Disney type models and statues complete with banks of flashing LED lights  , all taking up what could be termed as valuable retail floor space.

 

Yes T21 has only just opened and may be those endless unused floor spaces will be eventually taken up and rented out to generate more profit , but what about all those small / medium shops where the site rents must be mind boggling and must have cost a small fortune to set up .

 

Over the past months on my trips back home I have been stopping at a large rural petrol station , this petrol station had one  7-11 , one Amazon coffee , and 5 empty shops , a few months ago I noticed that 2 of the empty shops had now obtained new businesses , one was a indoors air conditioned Thai restaurant , where the business owner had fully replaced the old shop front with a full glass exterior and filled the interior with modern chrome furniture and fixings, along with new kitchen equipment , and new staff dressed in matching outfits.

 

The other business that had taken over one of the empty shops , was completely gutted and refitted with metal racking and wooden stands ,  and new window signage showing scenes of Oranges and Apples , this new venture was selling fruit and veg.

 

Well so far Ive now stopped at this petrol station numerous times and to date ive never ever seen any customers in either of these 2 new businesses , like I said to my wife , when people stop for petrol , they normally want to fill up as quickly as possible , pop into 7-11 for a snack , or a quick coffee from Amazon , and be on their way , very few people I would think would want to have a cooked meal or buy their fruit and veg there. Only time will tell , but you have to ask your self , where was the new business owners common scenes as they sunk their money into these sure to doom business ventures .

So there must some sort of magical secret Thai business know how , some sort of un wavering business belief that no matter what sort of venture you commit your self to opening, even if its obviously not going to succeed , you just keep paying the rent and blindly carry one. Or am I missing some thing ?

[kaorop]

Many years ago wandering around the Klom thom area, I found a whole block of watch wholesalers/sellers, each shop was maybe 2 metres wide and 3 or 4 deep, must have been a few hundred shops in the block, ALL selling the same stuff.

I pondered for a long time, and as I could not understand how any could make money,  just went to cowboy and got one. ha5!

[kaorop]

24 minutes ago, Once Bitten said:

 

So there must some sort of magical secret Thai business know how , some sort of un wavering business belief that no matter what sort of venture you commit your self to opening, even if its obviously not going to succeed , you just keep paying the rent and blindly carry one. Or am I missing some thing ?

Actually I think this is why/how the "mafia" loan sharks thrive so extremely well here.

[meatboy]

9 hours ago, SpokaneAl said:

 

I wonder the same thing. All those high end stores that are empty of customers, and now Terminal 21 is open and another mall is coming as well. I also wonder how the local Home Pro stays open with expensive stuff that no one seems to buy and whenever we visit it is virtually empty. A new Macro also just opened and it is also pretty empty, although I must admit that I appreciate the always easy, plentiful parking.

I guess I am just not smart enough to understand the Thai version of basic economics.


Sent from my iPad using Thaivisa Connect

 

we have the same by us,4yrs.ago they built 2rows of shop houses near the rail track,they are half empty.

2yrs.ago they built the same the other side of the track,its been a yr.since and not ONE taken.

[sinbin]

6 hours ago, kaorop said:

Many years ago wandering around the Klom thom area, I found a whole block of watch wholesalers/sellers, each shop was maybe 2 metres wide and 3 or 4 deep, must have been a few hundred shops in the block, ALL selling the same stuff.

 

  'Monkey see, monkey do' .

[1FinickyOne]

Well, what you might be missing is that you might not be going there on the peak hours... and also, peak times of year. A shop selling high end goods can do a large number with one customer in a few minutes. As a retailer in USA, we would of ocurse do a big business during Christmas time. 

 

Also, most of the 50% off type sales are projected from the beginning... take a $10 item and mark it up to $100 and then run a 50% off sale... 

 

And most mall stores are part of large chains and they know what they are doing... or else, they can and will disappear. But nice of you to be concerned. 

[prakhonchai nick]

22 hours ago, thehelmsman said:

There has to be more to it than just bad business sense. Take all the home improvement places as another example, the employees outnumber the customers. It's a mystery.

 

Good for the cosmetic manufacturers.   if you can wrest a girl away from her mirror and smartphone, she knows bugger all about what she is supposed to be selling!

[hdkane]

I am also a bit confused by the Thais willingness to saturate a market to the point where no one makes money...but it isn't limited to Thais...I recently visited a friend in the south of Thailand...where he has opened his 4th business in 6 years...each one failing...the latest is an upscale cafe in a dodgy part of an island...if people are paying 300 baht a night for a room, they are probably unwilling to pay 1000 baht for a meal...but he is certain that if he builds it they will come...and of course, there are always the guys who want to open a bar in Pattaya...with thousands of competitors at their doorstep...between market saturation, apathy among staff, blatant corruption, police hassles, and discrimination towards foreigners, I'm amazed any retail entrepreneur can make money here...

[toofarnorth]

A lot of good reading here,  one I cannot understand is the one where all sell the same. If you come out onto AH2 from my soi and turn left there are a dozen little salas where you can buy pineappens , turn right and just before the border with Myanmar there are a dozen salas where stawbellies are being sold. ( note my writing same  as I speak ). Another one in town are the 2 story shit/shop houses , around 3 million B and when the shop front opens they are selling the same as 50m along the road. DUH !  Oh one more , Lotus has a Mc shop inside In 2 years I have never seen anyone buy anything from there and I go at least twice a week to Lotus. 

[meatboy]

it does make you think HOW THE HELL DO THEY SURVIVE.

weekends when the outside is HOT where do they go the mall ect.where they have air-con.

its cheap [crap] food in the courts that are only full,do they make a profit?its hard to tell.

as for the buildings that have been going up and up still empty, i can only think its money thats been washed.

[seancbk]

I hear people asking this question all the time.

To get an accurate picture of the potential business health of a store you need to either work in it, or observe it for a full month, 8-10 hours a day (whatever it's operating hours are).

 

You cannot tell just from the brief amount of time you happen to walk past and see it empty.

My mother ran a retail store for several years and it was quite usual for there to be no hours between customers.  However, when customers did come in they spent money.  Had you walked past everyday you'd probably have thought she was always empty and wondered how she made money, when in reality she made a lot of money.

Admittedly, some shop do not last but the ones that have been around for years (opticians as an example) yet still seem to be always empty are doing fine.  It is just your limited perception that they have no business.

 

[Andyfez]

Central Plaza opens later this year..........

[sixthelement]

21 hours ago, mick220675 said:

I have always wondered how opticians shops all over Thailand stay open. They have at least two staff and very few customers.

 

I source in China and one thing I can tell you is that you favorite Rayban sunglasses are worth 2$ out of the factory.

Margins in this business are just insane.

 

 

[Once Bitten]

Originally I posted about shops and businesses in the Mall , but the more I think about Thai business acumen , the more puzzling it gets . I live in a typical small rural town with an assortment of retail businesses and services.

 

A few thing ive noticed about the town is that vast majority of the shops are selling the same identical products , on every street there’s numerous hardware shops , all with the same products sat on on display out side the shop, and then theres the coffee shops on every street corner , and further down the road , endless beauty / ladies hair dressing shops.

 

The new recent trend seems to be,  open a 20 Baht shop , at first there was one shop , now the town is awash with them , all selling the same identical cheap Chinese plastic stuff .

 

The towns first 7-11 opened 6 months ago , but some one has recently opened another one within a short walking distance of the first store.

 

The other thing that springs to mind about some of the towns businesses ,  is that some times when I walk into a shop , I notice a person sitting by the the cash register and these people seem to be logging in a book the sales transactions , not operating the cash register but sitting near it , these people nearly always look to be of Chinese / Thai origin .

 

My wife’s friend recently converted the front of her house into a coffee shop , a new glass front and entrance door were fitted , floor re tiled and air conditioning installed . When I called there just after the coffee shops had first opened , I noticed that there were no out side advertising signs in front of the place , not even a free standing sandwich board type advertising sitting on the pavement out side the shop , I asked my wife why there was no advertising out side the shop,  her friend told her that if there was any advertising banners / signs out side , she would have to pay the local government office a monthly payment fee , and she did not want to pay the monthly advertising fee.  Needless to say , the coffee shop is not doing to well.

 

One other thing that has made me scratch my head is this , in the town there are rows of shop houses , many with several floors above them that seem to contain rooms of some sort , these buildings that were obviously built some years ago now look like they have never had a new coat of paint to the out side walls , since they were originally constructed, the buildings exterior walls now look a dirty white with black patches , you have to wonder what happened to the building maintenance .

 

I have talked to my Thai wife about the subject of local businesses , and she thinks that the vast majority , apart from the Chinese / Thai owned places , really don’t know or care about profit and loss issues , to them if money is trickling into the business then every thing is ok , and why worry about the future , to them how they run their businesses is more a way of life than some thing to be taken seriously .

 

Just a side note , I keep telling my Wife that if one day more foreign owned businesses were allowed to open in Thailand , and be directly run and managed with the foreign business know how and more importantly , how to treat customers with regard to service and customer care , what a ‘’ shock ‘’ would be in store for the Thai general public .

So many head scratching questions

 

[elgordo38]

17 hours ago, sinbin said:

That reminds me of the story of the Thai who wanted to open a shop. Before he opened the shop he went along the soi to find out what everyone else was selling. He then went and found a rental unit and proceeded to sell the same as what everyone else was selling. 

Reminds me of Mexico blocks and blocks of gold shops and car accessory shops gives new meaning to one stop shopping I guess. 

[NoshowJones]

On 1/11/2017 at 8:15 PM, cooked said:

Why pick on the Mall? You can find this kind of thing all over Thailand. Many shops that were present at the opening of Robinsons in Buriram have now disappeared, in most malls you will find empty shops.

How about the stalls selling melons for mile after mile, maybe one car stopped along the way...  some people just like the thought of being a shop keeper.

Maybe so, but they still have to pay their bills and feed their familes.

[lungnorm]

In Australia the Malls operate on the principle that the cash registers are linked to the mall management office and they know what your turnover is. That is how they determine the rental that you pay. One drawback is if you do not have enough sales you get turfed out. Its the Mall management that makes the money the poor shop owners usually get very little and give up before they get removed by the management. If by any chance you make a lot of money they will increase your rental fee.

 

Edited January 13, 2017 by lungnorm
addition

[dansbkk]

is is not Just a Thai phenomena.  Take a look at everyone's favorite e-commerce site like Amazon or  Lazada. 100's of sellers all offering the exact same item, at the exact same price.

I run an e-commerce consulting business and the first question the newbies ask is, "What are the most popular items I can sell"?  I'm sure it is similar here too.  The new guys don't know enough about business and the major name stores want to make sure their brand name is represented in all markets.

 

It is not a big deal when you are a little mom and pop type operation and you make 2 or 3 hundred extra Baht each day when you have a low overhead.  It does get to be a major problem at the large malls when mall management wants a fixed rent and utilities payment every month.

[impulse]

On 1/12/2017 at 1:53 PM, mick220675 said:

I have always wondered how opticians shops all over Thailand stay open. They have at least two staff and very few customers.

 

If you've ever bought glasses in Thailand, you'd quickly figure out they only need to sell a pair or two a day to pay the rent and the cuties' salaries.  They can look dead empty for 7 hours out of an 8 hour day and still do okay.

[impulse]

3 hours ago, possum1931 said:

Maybe so, but they still have to pay their bills and feed their familes.

 

You know the great thing about a wife with a shop?   She doesn't have as much spare time to spend money.  I say that with tongue firmly in cheek, but I've known guys in China who set their wife up with a money losing (or break even) shop because it was costing them too much to let her be idle.

 

Then there's the money laundering aspect where a shop that never sees any customers all day for months supports a lifestyle that includes Merc's and mansions.

Edited January 13, 2017 by impulse