ECONOMY: Betting on Bangkok to rebound

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http://www.bwob.ca/topics/opportunities/canadian-entrepreneurs-bet-on-bangkok/

BANGKOK: Even with a bullet hole in his office window from recent political violence, John Stevens has good reason for doing business in Bangkok The Vancouver native’s Point of View (POV) Media Group Co. beat out 12 other firms for a concession to supply advertising content on 610 liquid crystal display screens throughout the Bangkok subway system, a deal that could garner about $4 million in annual revenue.

“I think being foreign might have helped,” says Stevens. “A lot of Thai companies do things right too. But in this type of space, there is an open-mindedness to work with foreign companies, including Siemens from Germany and some Japanese companies that develop mass transit infrastructure. 

Despite protests and military crackdowns over the past two years, many Canadian companies see Thailand as an attractive business opportunity, owing to 7% annual economic growth in the past few years and wages as low as $5 a day. Hosting 15 million tourists a year, Thailand also has an big pool of talented, internationally minded Thai educated in English at dozens of private schools, many featuring Canadian teachers. With a love for foreign products and a culture of spending rather than saving, Thailand’s consumer market is ideal for foreign companies, who find Thailand more welcoming than the tight-knit fiefdoms and rigid rules of Japan, China, India and elsewhere.

 

The Canadian Chamber of Commerce has 160 members in Thailand, including major corporations such as transportation giant Bombardier, engineering firm SNC-Lavalin and the Bank of Nova Scotia. But many are smaller players with Thai partners, notes the chamber’s president John Casella. Canadians in Thailand are well received in the business community, he says.

“Canada’s biggest export to Thailand is not products such as maple syrup, but Canadian people who fit in quite well in Thailand,” Casella says. “We are known for getting along easily with Europeans or Americans or Aussies. So Canadians are easier to hire than some nationalities.”

Since moving from his native Toronto to Bangkok in 1996, Mr. Casella has worked with the Dusit Group, Arthur Andersen, and is now director of business services at Baker Tilly, an accounting firm.

But challenges abound. Despite Thailand’s welcoming atmosphere, many foreign investors face obstacles such as a relatively weak culture of contract law and the threat that corrupt local partners might cheat them. Political figures might change the rules of the game or muscle investors out of business or property holdings, which require majority Thai ownership. Thailand’s culture of violence – which goes deeper than recent bouts of political turmoil – can also ward off entrepreneurs accustomed to the comfort zones of other countries.

Many Canadian workers in Thailand go on to form their own companies, as Stevens did. He started his own company in early 1999, publishing a discount coupon-type book called The Best in Bangkok. Since publishing was a tough marketplace with low returns, he decided to try the so-called out-of-home media business, where ads target people in semi-public places such as office towers.

Building on relationships with advertising agencies and other businesses, POV Media won the rights to install billboards and LCD panels inside restrooms in 2002 and elevators of office towers in Bangkok in 2005. “I had seen this in Canada in the ’90s with the Elevator News Network. They were providing space for advertisers, and I decided to try this in Bangkok.”

With 30 Thai staff at the Bangkok office, POV Media deploys about 400 screens in more than 40 Bangkok locations, he says, and about 1,000 billboards in restrooms at 200 locations. In a digital process that takes about 20 minutes, the Bangkok office will upload a 30-second ad spot through the Toronto IT back office of U.K.-based company EnQii, which relays it back to 400 screens in Bangkok.

Stevens says many Thais prefer working in Western companies that allow them to state opinions and take responsibility for decisions. “If they have a better idea than me, let’s go for it. Some Thais wouldn’t feel comfortable with this organizational structure. But those who do, really strive on this sense of ownership.”

With clients including Canon, Sharp, Apple, Toyota, Standard Chartered Bank and several Thai banks, he says his business has grown five-fold, with annual revenue surpassing $2 million last year, despite political instability. Though the conflict in April and May forced him to move to a hotel room, he kept his office open until the violent final week of the conflict.

“Our office had the best seats in town overlooking the protests sites in Lumpini Park. I call it centre ice,” he jokes. “I sent a picture of the bullet hole to my mother. She thought it was time I should be coming back home.”

LIVING COMFORTABLY

About 10,000 Canadians live in Thailand, staying in touch at gatherings at the Four Seasons Hotel in Bangkok, Canadian-owned bars and restaurants such as Woodstock, Tenderloin and Bistro 33, or at golf tournaments and indoor hockey rinks which help beat the tropical heat.

Other Canadians working in other parts of Asia come back to their Thai homes and families from mines in Laos or offshore oil rigs in Malaysia and Indonesia.

“In most any other country, Canadians like the money and the opportunities, but in Thailand they are here because they like living here. The cost of living is much less, so they are able to live comfortably,” says Casella.

“Thailand is strategically well-placed in the middle of the various markets. If you are a consultant or trader in the region, Thailand makes more sense as a home base because you can do business much easier here, and it’s cheaper to set up an office here than in Singapore or Hong Kong.”

 


 

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