Two sisters succeed in the Thai desert industry
By Jon Fernquest[Introduction|Vocabulary|Article]
[Reading Questions|Answers]
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Thailand is a land friendly to small business.
The myriad of Thai small businesses arrayed along every street strikes the western visitor when they first arrive.
Small businesses range from the street-side noodle carts to neighborhood variety stores to shoe repairmen to small motorcycle repair shops that will patch a motorcycle tube for 20 baht.
The small border town of Maesai, Chiang Rai transforms itself into a gigantic duty-free shopping area every weekend. Almost everyone runs a small business.
It's a lot easier to start a small business in Thailand than it is in the west.
Small businesses can be a way to improve income and social position.
People can supplement the salary of their day job with money they make in the evening from a small business.
Today's article looks at how two young women succeeded in developing a small neighborhood desert business into a large company with a range of products targetted to different market segments.
Their story provides a useful guidebook for future entrepreneurs.
Reading Questions
Here are some questions to guide your reading (See answers at end):1. What three elements were necessary for the sisters to turn their business idea into a successful business?
2. Where is the desert product sold?
3. Where did the sisters get their business idea from?
4. Where were the two sisters working when they came up with the idea to start selling this desert product?
5. Who were the three initial investors in the company?
6. What three things did the company do beyond what the bank employee was already doing?
7. How did the sisters begin to distribute their product?
8. Did they have any accounts receivable problems initially?
9. After trying direct distribution to stores, what did the sisters try next to generate interest in their product? Was this successful?
10. What improvements were made to the product and its packaging to make distribution easier?
11. How did they make contact with more customers and make their product better?
12. What was the big event that led to major success?
13. What are the two keys to success in the food business, according to the sisters?
14. What problems did the sisters encounter with quality control?
15. Once their product enjoyed some initial success, did the sisters have an opportunity to relax and take it easy?
16. What is essential to improving quality and expanding a product line?
17. When they expanded their product line, which markets did they target with special products? What were the differences between these products?
18. Where is their desert available nowadays?
19. Do the sisters make their recipe available to the general public?
20. Did their business make a profit initially?
21. What advice do the sisters give to people starting a food business like theirs' ?
Article from Bangkok Post (17-03-07)
From humble beginnings ...
PICHAYA SVASTIBy dint of hard work, forward thinking and scrupulous attention to detail, two sisters have turned a tasty dessert into a thriving business
Few fans of the country's best-selling, soya-based dessert know that their favourite treat is the fruit of a collaboration between members of two very unlikely professions - petrochemistry and accountancy.
The brainchild of sisters Yanee and Srisomboon Chawanisakul, Jao Juk, a sweetened curd made from a mixture of soya milk and cow's milk, is now selling well at some 3,000 convenience stores scattered across 33 provinces. But it's taken the siblings eight long years to reach this point - a tribute both to their never-say-die attitude and their unshakeable faith in the quality of their product.
Their success has emboldened many aspiring entrepreneurs, holding out hope that they, too, could make it big if they're able to differentiate the good from the merely average and have the self-discipline to do all the hard work necessary to carve out a niche for themselves in the market.
"It all began the day I tasted a home-made dessert in Phetchaburi. It was being sold as a sideline by a bank employee and it was so delicious that I immediately saw the potential of selling it in plastic bags for 10 baht each," said Yanee, who at that point was working as a chemist at a plastics factory.
All fired up, she sold the idea to younger sibling Srisomboon, then an accountant for a cosmetics company, and the pair approached the inventor of the recipe with a proposition: All three would invest in a joint venture to mass-produce, package and market the dessert. Little did the sisters realise that, less than a year later, the work would become so time-consuming that they'd be forced to quit their full-time jobs.
But it was tough at the beginning.
"We visited one retail outlet after another, but most of them said no," Yanee recalled. "Only one in 10 store-owners was receptive and some of those who did agree to take a consignment refused to pay up later."
At this point they weren't sure how to proceed, with Srisomboon even wondering if a soya-based dessert wasn't too novel a product to catch on.
But after weathering a few more months of disappointments, they realised they were on the right track after renting a stall at a home-and-garden fair in Bangkok hosted by a five-star hotel. There, they gave out free samples of Jao Juk which, by this stage, was being produced in Mahachai, the bustling seaside town in Samut Sakhon where the sisters were brought up. Over the next few days their entire stock sold out.
Several months later the packaging was changed from plastic wrappers to more convenient plastic tubs with lids. And when Jao Juk finally got approval from the Food and Drug Administration the Chawanisakuls started to feel a lot more confident about the future. The sisters recommend this course to any prospective entrepreneur, pointing out that distributors tend to be more willing to do business if a manufacturer has acquired all the necessary FDA licences and bar codes.
Yet, marketing still posed a big challenge.
Said Srisomboon: "Since our product was so new, no one really knew what it was. So we realised that it was important to give people a chance to taste it first."
Taking a trial-and-error approach, they decided to spend less time on door-to-door sales and begin renting space at various trade fairs. Which proved to be the right move. Practically everyone who got to sample Jao Juk came back for more, with some fair-goers buying 40 to 50 tubs a day to share with friends and relatives.
"We found that booth sales were the best way to make our brand better known," Yanee said.
Their big break came when an oil company agreed to stock the original dessert plus a new variety - Jao Juk with a fruit-salad topping - at its petrol-station shops in greater Bangkok.
In the food business, Yanee said, word of mouth is probably the key to success, followed closely by conveniently located outlets. "People who'd sampled our products at a fair and liked them would ask where they could buy more. And we were able to tell them: 'At any [name of firm] petrol station'."
Although business started to pick up, the sisters still had to travel a lot to promote Jao Juk through door-to-door and booth sales. They also spent a lot of time behind the wheel, driving back and forth between Bangkok and Mahachai. They later relocated their production base into the city proper, to Thawi-Watthana district.
And a bit of advice: If you're in the food business, never make the mistake of stinting on quality control.
"Our products have a short shelf life," Yanee explained, "so if we're relying on others to distribute them we have to make sure to maintain storage standards. You see, to save costs, some drivers turn off the refrigeration systems in their trucks when they're nearing their final destination."
Although Jao Juk now had a firm following by this stage, Yanee didn't become complacent: When you're in this sort of business, she said, you have to be constantly thinking about how to improve quality and expand your product line. "This is where customers' input is very important."
Last year, the man whose recipe led to the birth of Jao Juk sold all his shares in the joint venture to the sisters. Then, as part of an ambitious expansion plan, the Chawanisakuls launched two new products: Mr Jack, aimed at the school market; and Jao Joi, for factory workers. With a cow's-milk content of 25 per cent, Jao Juk costs 20 baht for approximately 200ml. Its new stablemates contain progressively less cow's milk and retail for 15 baht and 10 baht, respectively.
Distribution has also expanded. Jao Juk is now available at most large shops and supermarkets in Bangkok and Jao Joi is scheduled to appear on convenience-store shelves next month.
"We had to overcome a lot of obstacles to reach this point," Yanee said. "But we never gave up. Despite initial losses, we kept on seeking out new opportunities. And we didn't expand the operation until we felt we were ready."
And Srisomboon has another tip for anyone thinking of following in the Chawanisakuls' footsteps: Start small. "Focus on only one product at the beginning; and don't let the project get so big that you have to borrow to meet the investment costs."
And both sisters stress the importance of keeping recipes top secret.
For they certainly do.
"Doing things one step at a time is far better than making a big leap and then falling over. Thinking new is a must, too: You've got to be at least one step ahead of your competitors," Yanee declared, adding, "Success is waiting for anyone who tries hard enough."
Vocabulary (in discussion above)
myriad - a large number and great variety
a variety store - a small store selling a wide variety of inexpensive things including food, cleaning supplies, toys, candy, paper, pens, hardware,...etc.
day job - when you have two jobs, the daytime job
market segments - groups of customers with similar needs (for example, young unmarried people need different products than retired people; See Wikipedia on market segments)
By dint of - by means of
By dint of x achieve y - achieve y using x, achieve y by means of x
scrupulous - trying hard to be fair, honest, and ethical
soya - made from soya beans (soybeans), an important source of protein in many foods (See Wikipedia on soybeans)
soya-based - made from soya
x is the fruit of y - x from y, x resulted from doing y (think of taking care of a fruit tree and then the fruit is your reward for hard work)
collaboration - people working together
petro- - regarding petroleum or natural gas
brainchild - the result of an idea they had
curd - when milk turns thick and white and sour after being left out (See Cottage Cheese in Wikipedia)
convenience stores - small stores that are easy to use (like 7-11)
siblings - brothers and sisters
bold - not afraid of danger and risky situations
x emboldened by y - y made x bold
aspiring to be x - trying to become x
a niche - a specialty (a small market or job that can create a secure economic position for yourself in)
carve out a niche - find or make a specialty for yourself
home-made - not bought from a store (implies higher quality, more care in preparation)
a sideline - an extra job (not your main job)
all fired up - very excited
was receptive - did not reject, buying or thinking about buying
a consignment - a load of goods to sell (delivered to a person or place)
novel - new and different
weathering - surviving difficult times (so that you can continue to do business in the future)
their entire stock sold out - sold everything
.
tubs - small plastic containers (containing yogurt for example)
Food and Drug Administration (FDA) - the government agency that regulates food and medicine (they made sure the food and medicine is safe to use)
prospective x - wants to be x
a bar code - the black lines on product packaging that identify the product (See wikipedia)
a trial-and-error approach to x - learning from mistakes and improving as you do activity x
trade fairs - a large show where companies in an industry display their products
a big break - an important opportunity to succeed in business or a career
word of mouth - advertising in which (See Wikipedia on word of mouth and word of mouth advertising)
spent a lot of time behind the wheel - has to drive her car a lot
stinting on x - not doing enough x
quality control - making sure a product meets customer requirements, eliminating product defects (See Wikipedia on quality control)
short shelf life - spoils quickly on a store shelf (outside of a refrigerator)
complacent - pleased with current situation (doesn't do anything to improve it even though they should)
a product line - the range of different products sold by a company
its new stablemates - other products in the product line (like horses who live together in a stable)
following in someone's footsteps - repeating what someone else has done to succeed
Answer Key:
1. What three elements were necessary for the sisters to turn their business idea into a successful business?
a. Hard work.
b. Planning (forward thinking).
c. Attention to the details.
2. Where is the desert product sold?
In 3,000 convenience stores in 33 provinces.
3. Where did the sisters get their business idea from?
From a bank employee who was selling the desert after work to make additional income.
4. Where were the two sisters working when they came up with the idea to start selling this desert product?
One sister was working as a chemist at a plastics factory. The other sister was working as an accountant for a cosmetics company.
5. Who were the three initial investors in the company?
The two sisters and the inventor of the desert, the bank employee.
6. What three things did the company do beyond what the bank employee was already doing?
a. Mass-produce the desert.
b. Package the desert.
c. Market the desert.
7. How did the sisters begin to distribute their product?
They visited many stores until they found ten stores who agreed to sell the product.
8. Did they have any accounts receivable problems initially?
Yes, some of the store owners who agreed to sell their product refused to pay them their share of the proceeds.
"Accounts receivables" means the money a company is owed by other companies. The staff in the accounts receivables department of a company often spend a lot of time trying to collect money that is owed to the company.
9. After trying direct distribution to stores, what did the sisters try next to generate interest in their product? Was this successful?
They sold the desert at a home and garden fair in Bangkok, handing out free samples to generate interest. This approach was successful and the sisters sold out their entire stock.
10. What improvements were made to the product and its packaging to make distribution easier?
The desert was packaged in plastic tubs with bar codes on it. Government approval and licenses were obtained from the Food and Drug Administration.
11. How did they make contact with more customers and make their product better?
Instead of going from door-to-door they rented booths in trade fairs and sold their product there.
12. What was the big event that led to major success?
An oil company decided to sell the desert product in their gas station convenience stores around Bangkok.
13. What are the two keys to success in the food business, according to the sisters?
a. Word of mouth advertising.
b. Stores with convenient locations (for example a chain of stores like 7-11).
14. What problems did the sisters encounter with quality control?
The product is not properly refrigerated, it can spoil quickly.
("Our products have a short shelf life," Yanee explained, "so if we're relying on others to distribute them we have to make sure to maintain storage standards. You see, to save costs, some drivers turn off the refrigeration systems in their trucks when they're nearing their final destination.")
15. Once their product enjoyed some initial success did, the sisters have an opportunity to relax and take it easy?
No, they had to constantly improve quality and expand their product line.
("Although Jao Juk now had a firm following by this stage, Yanee didn't become complacent: When you're in this sort of business, she said, you have to be constantly thinking about how to improve quality and expand your product line.")
16. What is essential to improving quality and expanding a product line?
Finding out what customers think about their products. ("customers' input")
17. When they expanded their product line, which markets did they target with special products? What were the differences between these products?
They targeted the school and factory workers' markets. They had lower cow's milk content, so they cost less.
18. Where is their desert available nowadays?
Jao Juk is available "at most large shops and supermarkets in Bangkok."
19. Do the sisters make their recipe available to the general public?
No, their recipe is top secret.
20. Did their business make a profit initially?
No. ("Despite initial losses, we kept on seeking out new opportunities.")
21. What advice do the sisters give to people starting a food business like theirs' ?
a. Start small.
b. Focus on one product.
c. Self-finance ("...don't let the project get so big that you have to borrow to meet the investment costs.")
d. Take small steps. ("Doing things one step at a time is far better than making a big leap and then falling over.")
e. Be innovative. ("Thinking new", "You've got to be at least one step ahead of your competitors")
f. Try hard.
