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Published on December 21, 2007

Kim In-yeop, CEO of Max and Mighty (Thailand), operator of South Korean cosmetics brand Missha, said the expansion of Missha franchises this year was not up to expectations.

He said money was the main problem for people interested in entering the Missha business. They fix their investment budget somewhere between Bt500,000 and Bt1 million to open a shop, but the minimum required is Bt1 million to Bt2 million.

"After the military coup last year, Thailand's economy has not been good. I have lived here for 13 years, and the economy this year was the worst it has ever been. I originally planned to open 20 Missha shops in Thailand this year, but the best I could do was only 10," he said.

The economic slowdown also affected the company's revenue, which fell to Bt120 million - Bt30 million short of expectations, Kim said.

However, he is optimistic about next year and believes the Thai economy will recover and that company revenue will grow 30 per cent after Missha is rebranded.

Natthapong Jantakaew, marketing director at Coffman Vibhavadi, the franchiser of Coffman brand fresh coffee outlets, said he had to work very hard this year to maintain the number of new Coffman shops being opened. The best he could do was keep the expansion rate at 10-15 new Coffman shops per month - the same rate as last year.

"People dared not invest in new businesses in the sluggish economic conditions. I had to seek new channels to expand my business," he said.

Natthapong said he had increased his marketing budget for advertising Coffman franchises, as well as providing good service for existing franchisees, simply to maintain growth. The investment budget needed for a new Coffman shop is not more than Bt100,000, which is not too high, he said.

Coffman has also created a new product to add value to Coffman shops. It plans to launch canned ready-to-drink coffee under the Coffman brand next year. It will be available not only at Coffman counters, but also in modern trade outlets.

"In the current situation, people think of many factors before deciding to invest in new businesses. There are many master franchisees these days, and the competition is absolutely high. I have to maintain good service and management to attract new investors to join in my business," Natthapong said.

At present, after being in business for nearly four years, there are 350 Coffman counters and shops around the Kingdom.

Supasakda Gatethai, managing director of Thai cocktail franchiser Cocktail Thailand, said although his business continued to perform well, he had been obliged to host training programmes to create new franchisees. As a result, 120 Cocktail Thailand outlets were opened this year.

Supasakda said an investment of about Bt10,000 was required of newcomers to his business.

"That's not too much to start a business. I think this is the main strength of Cocktail Thailand in attracting new entrepreneurs," he said.

 Nalin Viboonchart

 The Nation