Party Business in the Philippines. I wrote about this idea just a few days back, regarding online business and the supposed “sleaze” factor.
But if that article had a real failing, it would be that it didn’t focus in any way on living in the Philippines … a major reason many of you out there show up.
(And thanks for showing up, by the way, many of you haven’t missed one of my “highly irregular roll calls” in years and I appreciate it. I truly have a lot to be thankful for, and my readers are very high on that list.)
As so often happens, the comments to that “sleaze” article were at least as valuable as the article itself.
A great one came in from my good friend John Miele … (you can read a lot more from John here on Live in the Philippines.com) and in true online opportunist style, I have appropriated it and made an article out of it … suitably annotated, of course. Thanks, John.
Party Business in the Philippines — Real World
These Could Easily Sell All Over the Philippines
Funny you should mention party stores. I’ll relate a bit of a long story here, and a party store success in the unlikeliest of places.
Abulug is pretty remote… The largest “big” town is Ballesteros, around 10 km away. Since we’ve lived here, we became acquainted with the head of the local FX drivers’ association up there (The guy who deals with the LTO for the FX drivers).
His family owns one of the few “big” grocery stores in town (NOT as big as a supermarket, but much bigger than the average Sari Sari).
As a family, they invested earnings from the store into FX, and they now own a fleet of over 20 of them. The FX profits were used to expand into other areas.
A cousin noticed that there were no party supply stores, or planners, in the area, but kids still had birthdays, people still got married or dropped dead and had wakes (The nearest Jollibee is in Aparri, nearly an hour away, at minimum, or Tuguegarao, 2 1/2 hours).
They started small, with a little countertop display in the store. The FX drivers would stock up on supplies in Tuguegarao or Baguio, and bring them to town on empty return runs (They are employees, so they still drive, only carrying cargo).
They added the following:
- Favors of all kinds (They have hundreds of types now),
- Decorations,
- Cakes (brought up from Tuguegarao with passengers… on the day needed),
- Food (from lechon to burgers to pizza (some things brought, again, from Tuguegarao),
- Balloons of hundreds of types, (Ed: There is a HUGE markup in helium filled balloons.)
- Clowns or costumed guys,
- Karaoke rental,
- Bands,
- DJ’s,
- Photographers,
- Chaffing dishes,
- BBQ grills,
- and even those inflatable bouncy house things… Anything you could possibly need.
Party Business in the Philippines — Stay the Right Size
Aside from some of the audio equipment, food serving equipment, and basic decorations, everything is ordered when they receive an order (minimal inventory). Their catalogs are all in PDF on a computer in the store (Internet is spotty up there still).
This is a pretty fantastic writeup, John. There are a lot of people who claim to be “business consultants” and such who have never even looked a lot of simple, but easy to set up and highly profitable business this insightfully. Here’s my thoughts:
- Right-size. So many people dream up and idea that will need thousands in investment without even beginning the party business in the Philippines to prove what will and won’t work.
The business boomed. Big time. They bought the shop next to the store as “Party Central”… All in a tiny, poor, very rural, farming town.
A party store is about the last thing you would expect to see there, yet they receive huge word of mouth, and receive quite a lot of business. They developed relationships with venues, florists, caterers, etc. All on minimal capital.
Party Business in the Philippines — Brick and Mortar AND Online
The .pdf catalog is a good idea, but for maximum exposure one ought to have a simple website for ordering as well. ”Best of both worlds” so to speak. The beauty of the Party Business in the Philippines idea is:
- People spend on kids parties. In a land where even bath soap is sold in a one or two use cachet instead of by the bar, people will find thousands and thousands of pesos for a kid’s birthday
- It’s global. What better gift could a tita or tito working overseas give to a favorite niece r nephew than a “party in a box” … providing the overseas relative could find a place to order it?
- The Philippine sis blessed with cheap transportation/package services. You can send a small package anywhere in the Philippines overnight for the equivalent of a few dollars … unlike the US where you would rack up huge costs from FedEx or UPS.
- People can pay very easily with a cell phone, PayPal or even with Western Union or another padala service. No need for expensive, difficult credit card merchant processing setups.
- I see exactly zero “Sleaze factor”. If there’s a better way to make a buck than putting a smile on a child’s face,I haven’t heard of one.
So, the rest of you waiting out there, let me hear your thoughts on the Party Business in the Philippines.
A most informative article! I like to brainstorm various business ideas for when I relocate to the Philippines. I never would have thought of a party store. You’ve given me something to seriously think about.
Hi Henry,
Thanks for dropping by again and for leaving another great comment.
If it opened your eye to think outside the box, then it was a success as an article. I’m happy.
It’s not only the idea of a party store I wanted to get across, but the idea to think a little broader than the continual “copy-cat” thought on Internet cafe’s, sari-sari stores and other such businesses that are often cheek to jowl in every town and village.
The other key idea is to observe not what businesses are there, but what businesses are actually making money. What will Filipinos spend money on, that’s key. And kids are one category that people will spend on. They may even forego important things like necessary medicines, trips to the doctor, paying the light hill, etc., in order to give a fancy birthday party. If you want to start a business and succeed, you have to be “in the space” where people spend, not necessarily where other Filipinos have opened businesses.
While it’s hard to argue with success, the place John’s example party business really needs to expand in my view is to offer “Parties in a Box” via a website. There are literlaly millions of overseas Filipinos who want to do nice things for their relatives left back in the Philippines. The only way to give little Janie or Johnnie a nice birthday party today, from overseas, is to send money and hope it gets spent on what you intended it to be spent on. I really think there’s scope for a place that put together several price levels of kids party ‘stuff’ and sold them, priced by the person … 10pax, 20pax, 30pax, etc., delivered to the party person’s address. A place where dutiful aunts and uncles and grandmas living abroad could send “fun” direct to a child.
It’s a thought, anyway
Great article, I too saw that Filipino love to have a party and seem to spend a lot of money on them. Ill break my comments down into 3 sections.
1- I will use a internet cafe as an example. lets say an Expat opens an internet cafe and buys really nice equipment, has a first rate tech….great snack sales and is doing well. Business is booming and life is good. Then [drum roll] as if overnight there is an internet cafe on each side and across the street and now business falls by 75% and a price war ensues. We all know how a successful business can be ran out of town if a competitor pops up and out cheaps you. My biggest concern here is that your success will be stolen by countless copy cats. The guy in the article seems to have a geographical advantage by being in the boondocks. I am not being negative but rather playing devils advocate. On to comment 2.
2- My twist would be if the party central type of business gets going why not rent some warehouse space and put in the chuckie cheese tubes kids love to crawl in, cargo nets to climb, a rope swing where kids land in a foam pit and so on. They could buy your pizza,burgers,beer and hotdogs. You could also video the party and hand them a DVD of their party on the way out. We have a place here in Virginia that is called Kids in Motion. Its a place like I just described but they dont do the food. Bring your own or order pizza….its purely a fun house kind of thing.
3- I can cancel out some of the sting from comment #1 by fully advocating the website and try to solicit business from Filipinos working abroad. This is how you could stay ahead of the cut throat competition and is also a type of business that would build referrals and repeat business. Kids have multiple parties, parties for different reasons and so on. Your party in a box, the brick and mortar party venue and the website catering to customers abroad could be a great combo that could start small and grow into…….A FRANCHISE!…HAHAHA.
great article!
mark
Howdy Mark. I appreciate the kind words but much more than that I appreciate the fact someone actually read the article and gave the idea some critical thought. It’s refreshing … typically after I write an article like that the only feedback I get is someone writing me a plaintive, wailing sort of email about “Help me find a job”. *sigh*
Let me add a thought or two to your three excellent points, if I may:
I’ve mentioned the copycat issue often. Your basic point is very well founded. People do tend to copy, slavishly even, as soon as they see any business “poke it’s head up”. In this case, though, I think there are two important points of differentiation.
1. The Internet cafe model is, by means of physical connections, “strapped” to one place on the planet. Thus if someone opens up next door indeed, business will be hurt.
2. The party supplies business, however, ought to be structured so it depends not upon the walk-in or drive-by traffic that a copycat competitor will try to siphon off. It should sell to all of or a huge area of the Philippines by means of cheap delivery services, web-based (and text!) ordering and ability to accept payment remotely, something even the largest and most advanced department stores in the Philippines still have hardly even thought of.
But, overall, your point certainly deserves consideration. The “me too” phenomena is one of the things I caution people against frequently. Setting up a business in the Philippines is not easy. I continually get queries from folks who want to start a business in the Philippines, but who have no business experience at all. It borders on insanity to me.
The US is the 5th easiest nation to start a business in … see http://en.wikipedia.org/wiki/Ease_of_Doing_Business_Index . The Philippines is the 148th most difficult. As the saying goes, “do the math”.
Some good thoughts here. Perhaps you have never visited many malls. Kiddy party places are a significant percentage of the businesses open and thriving there. Also, many non-mall fast-food outlets, like KFC, Jollibee, McDonalds at al have large rooms, often an entire second floor dedicated to kiddy parties. That’s why it’s such a huge business and it’s “high dollar” in comparison to so many other businesses. Your idea certainly has potential, however the investment is huge in comparison to selling party hats and balloons and other trinkets. Certainly would work though, it’s a matter of population, scale and how well one can operate the business.
Now you have the picture! The real money in this, as I see it, are the literally missions of folks, Filipinos and those with Philippine-connections, all around the world who would be happy to have a chance to make a friend or relative happy. A;so, don’t overlook the growing “armchair” factor. Even in the US, where the shopping is still, unquestionably, the best in the world, I for one would much rather sit at my computer on Cyber Monday and do my shopping rather than stand in line from 3 am on Black Friday … and in the Philippines, you don’t even have that option.
Thanks again for sharing your views, I appreciate it and I am sure some others do as well.
great article!
Dave
Rest assured your articles get read here on my end and the contents/ideas get tucked away deep in the brain housing group.
Thanks for the kind words, Neal. My problem is, I have a million of those great ideas locked away in my “brain housing”, but I didn’t use the right return address, so they are all locked up in the dead letter office LoL.