Same same, but different? Recent changes in retail shops

When we came to Laos one year ago, most of the retail shop followed the Asian way: Just do (and sell) what your neighbor does. The main way in retail business is to buy stock for like 10.000 dollar and wait until it is sold. To show how much products you have you try to put everything into you little shop. and yes, put it also outside, it does'nt matter if it get's dirty from all the trucks passing by.

One year later, you see more and more change. The boutiques at the Khouvieng road are the most obvious change. They are nicely designed, with shelfs showing a selection of products. Nothing outside, instead they have glas doors and aircondition inside.

Also, some coffeeshops that opened recently follow a more modern way. Friends de Cafe, Benoni, Baan Tonmali Cake, Joma, YoQueen, IceBean, just to name some of them. Look at restaurants like Xayoh, Nos, Pizza Company, Swensens, i-Beam, Loft, Kongkhao - all of them do not follow the old hole-in-the-wall-concept. Or the new Meshop. Yes, some of them may not successful yet, since the market is still developing. But you can see a pattern.

The picture above shows the toilet at the Friends de cafe. It is actually a good symbol of what means paying attention to every detail. Toilets are usually the last place you modernize.

I am predicting more change soon. Innovation drives competition, and if you are the most innovative, you can stay ahead of the competitors, at least for a while.

Some people complained that Laos doesn't need modern shopping malls or international clinics. Actually the people just vote with their feet: They go frequently to Udon for shopping and health care.

So we still have exciting times here. And it sees that businesses are going on a fast pace and settings standards. This is a good development.

Laos Business MEetings - how to import to Laos

Peter Evens the mastermind behind Gecko Wines, talked recently about how to import goods to Laos, and what the challenges are. I recorded the talk and published it in my Podcast From Asia With Love...
Enjoy listening

http://wanhoff.com/?p=179

Laos Business Meetings starts on February 1st

Laos Business Meetings
Although there are workshops here and there and some business associations exist, Vientiane lacks of regularly business oriented networking events. In a country that still lacks of enough SMEs it is important to connect people and share knowledge and ideas.

The basic idea of a monthly Vientiane Business meeting is to bring foreign investors and business men together with local entrepreneurs and business owners. Anyone can participate, entrance is free.

The first meeting will take place at Kop Chai Deu, Top floor, on February 1st. It starts at 6.30 pm. The first hour is intended to be the socializing part.

From 7.30 pm to 9 pm we will have presentations. We have two topics so far: “Social Marketing with Facebook and Co.” and “Challenges for foreigners to manage a Lao company”. More topics are much appreciated. The only limit is 10 minutes for each presentation. The presentation doesn’t has to be with power point slides, any free talk is fine.

The last hour from 9 pm to 10 pm is reserved for networking and further discussions about the recent presentations.

If you are interested in having a presentation or talk about a topic let us know: thomas.wanhoff@gmail.com (02077591338) or on Facebook or the website http://laosbusinessmeetings.tumblr.com

We are looking for sponsors for drinks and finger food. Kop Chai Deu is sponsering us with the room, and www.expat-advisory.com is our first media partner.

Please let us know if you want to join - by reply or comment on the blog or Facebook. Please also forward this message to people you think may be interested.

On the internet: http://laosbusinessmeetings.tumblr.com and on Facebook http://www.facebook.com/pages/Laos-Business-Meetings/145344612187080

Doing business in Asia

Today I found this in my inbox. A brief description of someone wanted to do business in Asia. It doesn't even matter what country this is about:

I have applied for an investment license at the One Stop Unit in March
2009. I have still got no answer. The process is lengthy, complicated
and completely in-transparent. In reality, investors buy themselves to their licenses. I didn't pay, so I didn't get the license.

After all I have given up to make business here. If you are not
ruthless, you will only burn your fingers.

As someone who believe that business is driving development, this story shows the real problem of developing countries: It's not so much poverty or lack of education (though this is a huge problem, but not the cause). It is a lack of desire from governments. Desire in developing the country. Most governments in SE Asia are just fine with the situation, since their members already made enough money for themselves.

Let's see a developing country as a start-up business. The way they do it now is the way start up operated in the time of the first internet bubble. VC (in our example NGO and IMF and Worldbank) gave money, they burned it and asked for more money. Because there was a steady stream of new money coming in, there was no real reason to focus in the business model. That's the way developing countries operate: The infrastructure of the country is not financed by income from operations like taxes, but from donations and support from international institutions. The lack of taxes used to run the country is caused by a) lack of tax collecting processes and b) corruption.
So why aren't countries collecting taxes? Actually they do, but the system is far from transparent. First of all, foreign companies are due to tax, always. Local family businesses have to pay tax as well, but seldom do. The reason is: They won't get caught, and tax officers always think its too much work for them to collect the few dollars from small businesses. Then of course is a total lack of infrastructure and understandable tax laws. The reason is simply again the missing desire. If you want to get tax, you will establish a system.

The main reason why there is no system is corruption. This is all over Asia, and it's the biggest obstacle for the developing countries. Corruption kills competition and kills development of markets. Only the wealthy elite can afford to pay the bribes, so they run moist of the businesses and get a de facto monopoly. Without competition there is no incentive to grow and improve, so most businesses aren't developing much. Just look at state owned Hotels in Asia, or the quality of local run companies in general. Most use quite old equipment, producing same products since 10 years.

Why its important to have foreign companies?
Because they drive markets faster on a higher level. The know the process of competition and they know also they have to work harder then local companies (not only because of corruption, but also because cultural differences, lack of networks in the country a.s.o.) Successful foreign owned companies are a challenge for local companies, so the they have a quite good reason to improve and get the business.

But as long as the desire of the people in charge is their own bank account and not the countries wealth, there is no change at all.

Incubator for start ups in Laos

In the last days I was talking to several people about start ups and SMEs in Laos. Its clearly not the first thing that comes into mind when you hear Laos. But first of all, there are small conanies trying to start something new. Like Sinouk coffee and Xaoban, a yoghurt maker. I haven't found much for IT, beside Digital Divide Laos, a company I have to talk to soon.
So the idea of a hackerspace combined with what a friend, Marion, suggested, an incubator, could create something cool. It needs to be a physical space aka building. While I think IT would be the easiest business to start with, other entrepreneurs can join as well.
What has to be done first is spread the news. I will have a talk on http://www.barcampvientiane.org on November 27th about this topic. Let's see what we get out of that. Comment here or contact me on facebook or twitter (thomaswanhoff) for further discussions.