Advertising revenue from free publications,
a difficult business model in Thailand

It depends.

Several factors are involved in the profitability of free newspapers. People have to: 1. know that the newspaper exists (brand awareness), 2. be able to get the newspaper (distribution), want to read it because: 3. it deals with topics they are interested in (content focus), and 4. it has articles that interest them (readable content), and probably the most important: 5. the economy is strong enough and people are spending enough so that advertisers want to place ads in the free newspaper. Ads that will pay for the newspaper so it can be distributed for free.

Thailand has a graveyard of failed free publications. There are many ghosts haunting this graveyard. The English language tabloids Metro and Farang, became ghosts. The monthly English-Japanese lifestyle magazine Maplus kicked the bucket too. The job-search newspaper Seek Weekly can no longer be found on street corners anymore. The daily stock market newspaper Krasaehoon (Stock Wave) was unable to stay afloat, drowned, and was moved to the more cost-effective internet. The Nation's free Daily Xpress is still alive and kicking but it has only been going for two months, so it's really too early to say whether it will survive.

Recently, yet another publication, Kids and School a 72-page monthly magazine targeted at parents has also expired. You'd think that a publication with focusing on parents love for their children would get lots of readers and advertising, but the magazine wasn't anywhere near as successful as the free woman's magazine She's Smart which is still doing fine, despite the recession. Facing a 20% rise in newsprint costs and a slowdown in the economy with declining advertising revenues, the publisher decided to sell the magazine for 60 baht per copy after one year. The company is looking at distribution through convenience stores, supermarkets and discount stores to reach more readers. Subscriptions might be another distribution channel to increase readership.

Taking a foreign idea, as these free publications have done, and creating a Thai version of it from scratch seems to be very difficult indeed. Taking a publication that is already popular and thriving overseas (international licensing) seems to be a much more sure way to success. Bangkokstation Network, a firm specialising in business consulting, public relations, and translation and funded with venture capital from the Asia Partnership Group, started publishing a Thai language edition of Business Week, perhaps the most well-known business magazine in the United States.

Luckily, in the age of the internet, it is possible to start an online publication with headquarters in your bedroom for almost nothing. Then, one day, with proven readership, it might prove profitable to start publishing and distributing paper versions of your publication. Overall, this seems to be a more cost-effective way to develop and incubate a media business than starting with costly print runs first.

(Source: bangkok Post, business section, 12-05-08, WORANUJ MANEERUNGSEE, temp-link)

a business model - a simple description of a business, the market it targets, the value of the product to customers, the factors that will make the company to be profitable in the long-term

it depends... - different answers to the question for different situations

brand awareness - whether consumers know that a brand exists, whether consumers think of the brand quickly and easily

distribution (noun) - the process of getting a company's products to the customer

distribute (verb) - getting product from factory to customer

content - the stories and articles in a newspaper or magazine

focus - the main thing it is concerned with

readable content - articles that people find interesting, enjoyable, and worthwhile to read

tabloids - newspapers with popular articles about famous people and celebrities with a lot of photos, also shocking stories

lifestyle - the living conditions and things people do everyday (fashion, home decoration, pets, cooking, music, tv, movies, garden, etc)

a lifestyle magazine - a magazine with articles about everyday activities

kicked the bucket - (idiom) died

stay afloat - remain in business, keep doing business

alive and kicking - still alive, not dead

survive - still alive, not dead

expired - dead

X wasn't anywhere near as successful as Y - X was a lot less successful than Y

a recession - when the economy of a country is doing very badly

slowdown in the economy - when the economy does badly (less severe than a recession)

newsprint - the paper used to print newspapers

revenues - the money that a company makes from selling its product

convenience stores - small local stores like 7-11, easy to buy important things at

discount stores - large stores like Carrefour and Lotus that sell many different things at low prices

subscriptions - paying my the month or year to regularly receive a newspaper or magazine

a distribution channel - one way of getting your product to customers

readership - the people who read a publication

from scratch - starting with the most basic materials, with almost nothing

international licensing - paying money (licensing fees) to a foreign company to distribute or use their product or intellectual property (for example, paying Disney to use the image of Mickey Mouse)

Bangkokstation Network - a media, public relations, and business consulting firm funded with venture capita; by the Asia Partnership Group (See website)

Asia Partnership Group - a group that provides venture capital financing to many companies in Thailand and Asia (See website)

business consulting - giving expert advice on how a business should be run

Public Relations (PR) - generating positive public opinion for a company and what it does

funded - money provided for operation of a business or organisation

venture capital - money provided to start and finance small and risky new businesses

might prove profitable - might become profitable

incubate - develop slowly with care

a print run - running the printing machine (printing press) and printing out many copies of a publication

Posted by Jon Fernquest at 06:30 AM | Permalink | TrackBacks (0)

Rules relaxed on Thai overseas investments
but little interest yet

Last year, facing a stronger baht, Thai exporters were afraid that higher priced Thai exports would make them less competitive on international markets. They were afraid that they would be forced out of business by the stronger baht.

There was a lot of discussion in the media about what to do. One of the ideas was to relax rules preventing Thais from investing overseas. This would increase capital outflows and offset export and foreign investment inflows into Thailand (See Currency Crisis 2007 articles).

Thais are now allowed to invest overseas but, at least initially, there hasn't been much interest. Those wishing to invest overseas must first go through a lengthy application process. Only 20 people so far have sought approval since the application process began on March 14th of this year.

Thai investors applying for permission to invest overseas first must have their financial resources reviewed by the Bank Of Thailand (BOT) and then are screened for knowledge of how international financial markets function. Those who pass the review are given an initial investment line of $500,000. Investments can be raised in steps up to to a maximum of $5 million.

How overseas investments will be taxed is still not clear and this may be one reason for the initial low numbers of people seeking approval. The Thai government has stated that Thai investors will not have to pay taxes on their overseas investments if they remain overseas but companies must report the funds they have invested overseas every year.

Another factor limiting interest may be the limited range of foreign assets that Thais are allowed to invest in. Currently, the range of assets is restricted to equities, fixed income assets, and unit trusts. Investment in structured notes, derivatives, and commodities is not not permitted, even though these assets are often essential in building diversified portfolios.

Before the recent relaxation of rules, individual Thai investors could only make overseas investments by putting their money in Foreign Investment Funds (FIFs) run by Thai firms that pooled together the funds of many Thai investors and used these funds to make foreign investments. These FIFs first began in 2002 and vary greatly in management fees charged, currency risk, and investment strategy.

Thai overseas investments now amount to $10 billion (310 billion baht) most of which is invested through FIFs and provident funds. Government bonds are a safe and popular investment. Besides short-term US Treasury Bills, a standard low risk asset, government bonds from Korea, Australia, and New Zealand are also popular. Investments in Brazil, Russia, India, and China (BRIC) are also popular with FIFs.

Thailand's Association of Investment Management Companies (AIMC) is currently planning an investor education programme to educate and inform investors about the new opportunities in overseas investing that await them.

(Source: Bangkok Post, business, 12-05-08, Nuntawun Polkuamdee, page B2, temp-link)

Vocabulary:

a stronger baht - when the baht increases in value compared to other currencies, appreciates เงินบาทแข็ง

less competitive on international markets - less able to compete with companies from other countries (See Economist glossary on competition) ศักยภาพการแข่งขันน้อยลงในตลาดสากล

forced out of business - conditions made it impossible to do business anymore, so they stopped doing business ไม่สามารถดำิเนินกิจการต่อไปได้  ถูกบีบออกจากธุรกิจ

relax rules - make rules less strict, allow more freedom of action ผ่อนผันกฎระเบียบ

capital outflows - investment money flowing out of a country (either portfolio investment in securities traded in other countries or Foreign Direct Investment (FDI) which invests in companies and assets of another country, or starts a business in a foreign country การหมุนเวียนเงินทุน

offset - go in the opposite direction

X reviewed by Y - a formal examination of X by people with authority Y ตรวจสอบ

pass the review - be accepted (found acceptable by the authority reviewing you) ผ่านการตรวจสอบ

screened - checked to make sure it is acceptable ตรวจสอบหุ้น

a limited range - a restricted set, not every kind ขอบเขตจำกัด

assets - things that can earn money for their owner (See Economist glossary) ทรัพย์สิน

equities - stock shares in a company that represent partial ownership of the company หุ้น

fixed income assets - bonds, debt securities  พันธบัตร  ตราสารหนี้

unit trusts - an investment fund that pools together money from many investors, the price of the fund is the value of all the securities added together divided by the number of units issued, funds usually specialise in a geographical area or business sector เงินลงทุน

structured notes - debt securities in which the repayment of interest, and sometimes principal, is tied to movements in an underlying index ผลิตภัณฑ์การเงินแบบซับซ้อน

derivatives - assets that "derive" their value from some underlying asset, and therefore can be used to protect (hedge) against changes in these asset prices, options and futures contracts are examples of derivatives, derivatives tend to make balance sheets less transparent and easy to understand (See Economist glossary) อนุภัณฑ์

a commoditiy - goods like oil, cotton, rice, silver, and gold, the good is bought in large quantities with every unit of the good being the same (See Economist glossary) สินค้าหรือโภคภัณฑ์

diversified portfolios - protected portfolios, holding a variety of different assets whose prices tend to move in opposite directions with gains in one offsetting loses in another (See Economist glossary on diversified)

pool together the funds of many investors - put money from many investors together to make one big investment ระดมเงินลงทุนจากนักลงทุนจำนวนมาก

provident funds - a fund that company employees pay money into while they work, the company also contributes money, employees withdraw money when they retire เงินสะสมเพื่อการเกษียรอายุ ที่เราเรียกกันทับศัพท์ว่า โพรวิเดนท์ฟัน  เงินก้อนนี้เกิดจากการที่นายจ้างและลูกจ้างร่วมกันฝากประจำไว้ทุกๆ เดือน โดยหักจากยอดเงินเดือนสุทธิที่ได้ของลูกจ้าง  และลูกจ้างจะได้รับเงินก้อนนี้เมื่อเกษียรอายุ

US Treasury Bills (T-bills) - mature in one year or less, do not pay interest prior to maturity, sold at a discount to create a positive yield to maturity, considered by many to be the least risky investment available to U.S. investors (See Wikipedia) พันธบัตรรัฐบาลอเมริกัน

Brazil, Russia, India, and China (BRIC) - the set of countries that a 2003 Goldman Sachs report argued were rapidly developing and would eclipse the current richest countries of the world by 2050 (See Wikipedia)  กลุ่มประเทศที่ได้รับการคาดการณ์จาก รายงาน Goldman Sachs ปี 2003 จัดอันดับให้เป็นประทเศที่มีการเติบโตทางเศรษฐกิจอย่างรวดเร็วและจะขึ้นมาเป็นประเทศที่ร่ำรวยที่สุดภายในปี 2050

Posted by Jon Fernquest at 06:22 AM | Permalink | TrackBacks (0)

Road to Burma's coast
to turn Kanchanaburi
into Thai transportation hub

The 130-kilometre-long road will connect Kanchanaburi, near Bangkok, to the planned deep-sea port in Tavoy [Burmese: Dawei] on Burma's southern coastline. Connecting Thailand to Burma's western coast at Tavoy could turn Kanchanaburi and Thailand into a regional transportation hub. Instead of transporting goods by ship down to Singapore and around the Strait of Malacca, goods from Thailand, Yunnan, Laos, Cambodia, and Vietnam could be sent straight to India, the Middle East, and Europe via Tavoy on the Burmese coast. This would shorten transportation time by as much as six days, reducing transportation costs by as much as 20%.

There are other expected economic benefits for both Thailand and Burma. PTT, Thailand's largest gas and oil company, will be able to lay a pipeline along the route to get easier access to natural gas in the Gulf of Martaban. Road connections from Bangkok to Yangon will also allow easier contact by road between the people of Thailand and the people of Burma. In the long-run, this should lead to a much needed boost in trade, investment, tourism, and educational exchanges between the two countries. The project will also create more jobs in rural Kanchanaburi.

The project is ten years in the making. Originally, a study was ordered after HRH Princess Maha Chakri Sirindhorn proposed the idea. The project was officially classified as part of Thailand's Western Seaboard development by the government National Economic and Social Development Board (NESDB) which is in charge of development planning.

Finding a route from Thailand to the Burmese coast wasn't easy. Kanchanaburi's border with Burma is a long 374 kilometers with 30 border passes, the most famous of which is Three Pagoda's Pass in Sangkhla Buri district. Most of the passes are impractical because they pass through mountainous forest area. Some areas are watershed areas protected by law. A suitable route only 70 kilometres from downtown Kanchanaburi and 130 kilometres from Tavoy was finally found. The route passes through the village of Ban Phunamron in tambon Ban Kao of Muang district in Kanchanaburi. The first phase of the project will construct a 54.5 kilometer two lane highway for 340 million baht. The second phase will expand the highway to four lanes with an investment of another 850 million baht.

(Source: Bangkok Post, @Thailand section, Piyarach Chongcharoen, 10-05-08, temp-link)

Vocabulary:

Tavoy - the city on Burma's southern coast that is the proposed site of a deep sea port, to be connected to Kanchanaburi and Thailand by road (See Wikipedia on Tavoy/Dawei)  เมืองทวาย  เป็นเมืองที่ติดกับประเทศไทยที่เมืองกาญจนบุรี มีเทือกเขาตะนาวศรีกั้น

a deep-sea port - a landing place for very large ships (See Wikipedia) ท่าเรือน้ำลึก

talks - formal discussions to produce an agreement  การเจรจา

a counterpart - another person with the same position as you have in another company, organisation, or government  คู่  

gave a big push - helped it a lot ให้ความช่วยเหลือ

economic development - the growth of a country's economy  การเติบโตทางเศรษฐกิจ

cooperation - working together with other people to achieve a goal ความร่วมมือ

a transportation hub - a place where many transportation routes join together, so goods and people can transfer from local to regional or international transportation (for example, Suvarnabhumi Airport is an transportation hub, from Chiang Rai you can change planes for a flight to the USA)  ศูนย์กลางการคมนาคมขนส่ง  (เพื่อเป็นที่ขนถ่ายสินค้าจากภายในประเทศส่งออกต่างประเทศ และจากต่างประเทศไปขายในประเทศ

Strait of Malacca - the narrow waterway past Singapore that ships from Thailand and Asia have to pass through to get to India, the Middle East, and Europe (See Wikipedia) ช่องแคบมะละกา

go to X via Y - go through Y on your way to X เดินทางผ่านเมืองหนึ่งเพื่อไปยังอีกเมืองหนึ่ง

expected - believe will happen คาดว่า (จะเกิดขึ้น)

contact - regular meeting and communication between two groups of people การพบปะ ติดต่อ ระหว่างคนสองกลุ่ม

in the long-run - over a long period of time, several years  ในระยะยาว

trade - the buying and selling of goods การค้าขาย

rural - in the countryside (farms, forests), not the city  ชนบท

ten years in the making - has taken 10 years for the project to be completed   มีระยะเวลาดำเนินการ 10 ปี

classified as - put in a group of things with similar characteristics  ถูกจัดประเภท หรือจำแนกเป็น

a route - a way between two places (for example, a truck route, an air route, a shipping route)   เส้นทางเชื่อมต่อระหว่างที่หนึ่งกับอีกที่หนึ่ง

a pass, a mountain pass - a narrow path or route between mountains  ทางผ่าน

a border pass - a route through the mountains into another country  ด่าน (ผ่านเข้าออกระหว่างประเทศ  เช่นด่านเจดีย์สามองค์)

impractical - an idea that does not work in the real world, not practical ไม่เหมาะสมในทางปฏิบัติ

watershed areas - a forest area with streams and rivers that collects water that can be used as a regional water supply (See Wikipedia on drainage basin) บ่อพักน้ำ  แหล่งเก็บน้ำ

a suitable route - a route that can be used to achieve a goal, an acceptable route, not too long, has good features  เส้นทางที่มีสภาพดี / สะดวกต่อการเดินทาง

first phase of the project - the first part of the project  ในระยะเริ่มต้นดำเนินการ

Posted by Jon Fernquest at 06:00 AM | Permalink | TrackBacks (0)

A young Thai entrepreneur
designs a donut and donut store
to beat all donuts

Homemade bakery products using an old family recipe is the key to 25 year-old Thai entrepreneur Peter Thaveepolcharoen's new donut brand. He's using the same recipe that his father used 25 years ago when he ran a donut shop in Los Angeles in Southern California, USA. The donuts are even named after his father. Daddy Dough is the brand name, "daddy" being an endearing word that many American children call their father.

Thailand's donut industry is now worth a whopping one billion baht but it is still dominated by two international chains: Dunkin' Donuts and Mister Donut. Doughnut Maker is another smaller player in the market, but it is only found in coffee shops run by the Coffee Word franchise. There are also similar new and popular bakery products (substitutes) from other countries such as Roti Boy Buns from Malaysia that hit Thailand two years ago.

The family recipe may prove to be the key to success that differentiates Daddy Dough's donuts from the sometimes boring standard fare of the two long dominant international donut producers.

Peter majored in hotel management at the University of Hawaii, worked at a software company for a while after graduation. He tried hotel work, but didn't like it much. At first, he planned to follow in his family's footsteps and open a restaurant, but the idea of a donut shop came to him. He started a pilot donut store in the family's Italian restaurant. Things moved quickly and he finally launched the company in August 2006 becoming managing director (MD) in January 2007.

He's thoroughly studied the local donut market. Acknowledging the strong points of existing competitors in the market, he devised a business plan to differentiate his product and outlets from theirs. The core of his strategy is to target a slightly older age group (22-40) from the age group targeted by the international donut chains (15-22) offering over 40 flavours, not overly sweet, including standard flavours such as chocolate, coffee, vanilla, and cinnamon, as well as unique flavours such as spinach, sesame, and fruity jam. The donut itself is soft and light. Peter has also tried some new things that other donut shops haven't tried yet, like mixing real coffee directly into the donut dough.

Peter has put a lot of effort into designing pleasing interiors for his donut shops. With help from interior designers he decided on earth-tone colours to create a feeling of warmth in his shops. Open kitchens allow customers to smell and see the donuts in the process of being made. Untouched by human hands, the fried doughnuts move along a conveyor belt through glaze as toppings are poured on. Seeing the donuts being made helps attract customers and satisfies their natural curiousity.

Daddy Dough currently has four branches located at Silom Road, Siam Paragon, Central Pin Klao and Bon Marche with plans to expand to seven or eight branches this year. Plans to offer franchises this year are also in the making with two different store formats: a small kiosk and larger outlets. Plans for international franchises by 2010 or 2011 are also on the drawing board.

Marketing and promotion of the brand currently is done through low cost word-of-mouth, leaflets, and the internet. The beautifully designed outlets are also a form of advertisement.

(Source: Bangkok Post, business, 08-05-08, Parista Yuthamanop, temp-link)

Vocabulary:

Posted by Jon Fernquest at 06:21 AM | Permalink | TrackBacks (0)

Lampang's horse drawn carriage industry:
an alternative technology for the future?

Can you imagine streets without noisy motorcycles, tuk-tuks, cars, and trucks?

If you live in Bangkok, noise pollution is so bad, that talking over the telephone in public places is often impossible. If your bedroom window is near the road, you'll have to shut your window at night to be able to sleep.

One day, some people fed up with Bangkok noise and pollution may choose to live in small towns outside of Bangkok without cars, choosing quaint old-fashioned forms of transportation such as walking, bicycling, or horse drawn carriages.

The city of Lampang in northern Thailand is home to Thailand's small but growing horse drawn carriage industry.

One factory producing these carriages, located in tambon Phichai of Muang district in Lampang, gets several dozen orders every month for custom built carriages from places as far away as Malaysia, Taiwan, Germany and the US. Orders in Thailand come from resorts and tourist venues in places such as Phuket, Chiang Mai and Chiang Rai.

Carriages run about 55,000 baht each and are custom built with optional decoration adding to the price. Each carriage takes about a month to build and the business makes about 20,000 in profit on each carriage it produces.

The business was started by a local carriage driver named Ekkachai Pramuk and a group of business associates. About three years ago, the Lampang Horse-Drawn Carriage Association commissioned them to build carriages for use in Lampang's tourism industry.

Lampang was the ideal place to start the business because the city is famous for its horse drawn carriage rides so there is a big market in Lampang for the carriages. The city is also home to skilled carriage artisans and horse trainers.
The horse carriage business has been on the upswing for some time now. Over the last 15 years, the number of horse carriages operating in Lampang has risen from a low of 50 to 120 carriages nowadays.

The start-up capital necessary to begin operating a horse carriage runs about 80,000 baht initially. Monthly earnings run from an average of 5,000-7,000 baht per month to a high of 10,000 baht. Horses are imported from Burma for about 10,000 to 30,000 baht each. Recently, the increased price of hay has squeezed the business somewhat.

Mr. Ekkchai's long experience as a horse carriage driver in Lampang gave him the background necessary to start a successful business. Lampang horse carriages have a unique appearance with thin wheels. Carriages are built with a combination of wood and metal parts and an elegant upholstered leather seat. Of critical importance for the proper operation of the carriage is the coupling of the horse to the carriage. There has to be a sturdy and perfect fit between the two.

It may not be obvious, but Lampang's horse carriage business might face a bright future one day, when small communities perhaps choose them as an alternative quiet, quaint, and energy-saving public transportation option.

(Source: Bangkok Post, @Thailand, 06-05-08, temp-link)

Vocabulary:

Posted by Jon Fernquest at 06:49 AM | Permalink | TrackBacks (0)