Laos seen as a stepping stone

Thai small and medium-sized enterprises are interested in opening branches and franchise businesses in Laos, to strengthen their export experience before targeting other countries.

Such SMEs include Novolife, a producer of herbal deodorants; Grace Glamorous, a manufacturer of designer shoes; and the Chaisi Wanton and Noodle franchise. Representatives of these firms last week accompanied Federation of Thai Industries (FTI) officials on a trip to Vientiane to promote Thai SMEs.

Exporting to Laos would enable Thai entrepreneurs to learn more about export regulations. In addition, Laos borders Thailand, making it easy to transport goods and control management from Bangkok.

Having a similar culture and language also makes it easy for Thai goods to access Laos and reach consumers despite facing tough competition from Chinese goods.

Suwit Ngoksri, marketing manager and owner of Chaisi Wanton and Noodle, said he was exploring business opportunities in Laos to expand his noodle empire.

The company has appointed a representative in Laos to manage the Chaisi franchise.

The Thai noodle franchise has seven vendors in Vientiane. The business requires an investment of Bt58,000 per vendor, which includes cooking equipment and decorative items. The company will also supply some raw materials to franchisees, such as noodles and wantons. However, fresh materials will be supplied locally.

"We must control our quality, so some important materials must be imported from Thailand," Suwit said, adding that the company's franchisees and representatives had to be well trained in all cooking processes, as well as vendor and service management, to ensure success.

Suwit said sales from each vendor in Vientiane averaged 200 bowls per day, at Bt40 a bowl. The franchises not only serve noodles and wontons, but also rice dishes like grilled red pork with rice and grilled duck with rice.

Suwit stressed the Chaisi franchises in Laos were of the same standard as those in Bangkok.

The company has already set up manufacturing plants in Maha Sarakham and Udon Thani provinces. Production there will serve demand and business expansion elsewhere in the Northeast, as well as Laos and Cambodia.

However, exporting franchises to Laos faces some trade barriers, such as logistics and business taxes.

Grace Glamorous owner and manager Phitsaluck Niyomthong said her shoes were marketed under the ChoTiGa and Jericho brands. The company recently started doing business in Bangkok, with its first shop located in The Esplanade shopping complex.

But Phitsaluck wants to open a shop in Vientiane, believing Lao women would love her designs.

"I don't have experience exporting, but it's something I want to do. Laos would be my first export opportunity," she said, adding that her company was looking for partners to expand its business.

In Bangkok, the company's designs target the teen and working-women groups. Prices are quoted in a wide range, from more than Bt1,000 up to Bt3,000.