My point was not so much about foot traffic as it was the amount of stores. I did not use the number of people to determine activity because as I said it was a Wednesday and most malls don't do as much business during the week. My point was that they have this huge mall space and more than 1/2 of the place not used or rented. That is what seems dead to me. All though I am American and can be accused at times of looking at things from an American point of view, what is the point Dominican way or not of building huge capacity to stay empty? Is that the point of the owners of Bella terra Mall to have a huge beautiful but empty space and call it a success?
- Thread starter PICHARDO
- Start date
Bella Terra Mall. Santiago.
My point was not so much about foot traffic as it was the amount of stores. I did not use the number of people to determine activity because as I said it was a Wednesday and most malls don't do as much business during the week. My point was that they have this huge mall space and more than 1/2 of the place not used or rented. That is what seems dead to me. All though I am American and can be accused at times of looking at things from an American point of view, what is the point Dominican way or not of building huge capacity to stay empty? Is that the point of the owners of Bella terra Mall to have a huge beautiful but empty space and call it a success?
If you try and do some of the stuff I said (place kiosks with reps on commission at local Mall and Plazas), you could target a potential larger client base than you now enjoy. It's well known that the local national tourism market produces profits, with less costs per service. As a support base it would allow you to operate several key points in the country aimed at you primary client sector. That's to say you could further expand into the key tourist areas of the country while conserving your activos/pasivos in check.
All you need is to place some really large posters of the trek and a LCD with a well prepared HD video, which offers a vivid look into the riding tour with a nice catching soundtrack. The rest is for the rep to answer questions and offer discount (wink) coupons for low season reservations. Displaying a just "waxed" VStrom on the floor would work wonders for the male Testosterone...
And as you say, Here lies the problem!. While Robert (CB) can well survive if he sells one person-tour per day in this supposed kiosk, the store owner in the mall cannot survive if he sells one pair of sunglasses or one pair of shoes, regardless of how much margin he has on those sunglasses or shoes.
And because the elite-mall store owner has very little foot traffic coming to his store, he has to work with huge markup. The huge markup discourages more massive sales. And because the store owner selling boutique-style merchandise has such a huge markup (100-200-300%) people who want to BUY that merchandise will actually BUY it in Miami, NY, Paris or online for 30% of that price.
The difference is, CB's tours cannot be bought online or in Miami from alternative source, at the end of day whether they buy online or in-kiosk from CB, there is only one source for the tours. While the store merchandise can be sources in many many places worldwide.
Why would anyone pay US$200 for some thing they can buy for $60 in Miami next time they travel (like next month). People go for shopping sprees to Miami, spending 2-3,000 dollars. they would spend half a million pesos for the very same things locally.
The thing is that in the DR commercial spaces don't follow the demand as in the U.S. and most other places, they create it!
It's not uncommon for Mall/plazas in the DR to never reach full capacity and vacancies are often 1/3 of the space. This is the norm here for as long as I can recall since the first shopping "plaza" like place was built.
The problem lies with how your perceive the DR biz system to work from your perspective and not that of ours. This reminds me of the time the Cine Doble of Santiago went on to build a new screen, Sala Doble 3... In a time when rarely the two existent ever reached full capacity and two movies where shown in the same screen at two different times during the same day. That's to say you could had watched "E.T." on Sala Doble 1 at 2:00 in the afternoon and then a friend watch "Tiburon" at the same Sala Doble 1 but at 3:15 the same afternoon... They did that when there were more than two good movies out in the market.
Why Doble 3? Well... At the time is was bragging rights! LOL!
Even having one popular anchor tenant onsite in the DR is considered as good biz here and not a "dead" Mall/Plaza...
The same reason why cars get sold at local dealers, Corripio sells large HDTV screens, etc... Not all people got to Miami to buy their stuff and many (including me) buy local for the extended service warranties.
The translation was lost to you altogether as I explained, but what can I do if you don't get it!
Here lies the problem!
Perception! You're using foreign values on how a biz works to that of the DR...
Even the busiest Mall or shopping plaza would look dead or down in biz using that set of values held by most here from their homelands. Like I said, the foot traffic in the DR is not really the key to how biz do in sales. In the DR people go shopping to the stores when they need something, not based on window's impulse shopping like most other countries.
The shopper will come in, spot what he/she needs and grab it. Then they'll look around a bit before heading to the counter and leave the shop. Only after these steps those shoppers become foot traffic around the Mall/Plaza areas (with low %).
Unlike in the U.S./U.K./CAN Dominicans consider it to be rude and of lacking manners to loiter about a place of biz when they don't really need to buy anything from it. In most cases they'll look from outside the store and display windows.
I have a cousin in Ontario that owns a Hobbies shop and over 85% of the traffic is lookers not buyers on any given day of the week. In contrast his brother owns a sport's ware shop in SD and 70% of his traffic are buyers that came in for something in particular with less than 20% of that number buying on impulse after browsing around a bit more.
This you can see everywhere there's a Mall or Shopping Plaza in the DR! Only the ones with food courts and other type of services can be said to have regular foot traffic patterns. But then again, those are equally targeted clients aiming for that sole experience in the area with some minor exceptions.
About 90% of expats that invest into a biz in the DR fail, even when using a good amount of financial resources. That's because they all use their imported criteria of what biz is to the DR, which does not applies at all here.
First mistake they do is to target several segments of client bases that are not stable and falls victim to world economic patterns with ease: Tourists, expats, etc...
Another big failure is to think they can get about growing their biz without advertising much or at all. Dominican biz spend big bucks on targeted campaign advertising year round. They use the twitter, facebook, myspace and all other media to link to clients and create their own biz pattern. More than 90% of biz in the DR are operated by the owners themselves.
Most stores you see that fall under the Dominican owned pattern, are based on an already existent biz run from the home office and that now extended to the site as it grows out. Their clients are there to support their basic operating expenses and they now have an extended wing to grow their biz even more from.
Let's take Robert's biz as an example here (Cobraboy). He's operating a biz that targets mostly the tourist kind and nationals to some degree. If Robert wanted for example open a presence in the Bella Terra Mall with a kiosk represented with a rep, the fact that you only see one or two people per day getting biz done there is not meant to identify his biz as "dead". In reality he's doing more biz than usual he does from his base in Jarabacoa. This is VERY common for Dominican biz all around.
Robert could go to lengths of setting up kiosks or small stores in many Malls or plazas around the DR, which can target a wider potential client base based on commissions for the reps. Would that mean that because you can only see one or two people carrying out biz at the kiosk/stores the MotoCaribe biz is dead? Far from "dead" it's alive and well...
Take the recently opened Office Depot in the Galerias 360 Mall. This biz has been in operations from a small cubicle in SD for over two years already, serving biz all around the country. They moved into their new store and already many are calling it a dead duck...
One day I'll set up a DR1 Dominican Biz 101 seminar, for all of those interested in learning how to carry out biz here and survive the expat biz "dead" trend...
For a fee of course! I'll even offer free Coffee (from our DR1 new Cafeteros brand) and donuts (KKreme).
I just finished my divorce here and can now focus on getting rid of some stuff till then.
a. Why build a mall so large if your permanent tenant base cant support that size? EVER.
b. Why not build a one floor strip mall? Why is there no diversification of services if what you say is true? How do the majority of those who have the rented 4,000 sq. ft(non-food based and cinema) all have the same business of hair salons/barbershops, hair supply stores and costume jewelry? If Dominicans have a different way of patronizing a mall then why is it they only seem to go there for apparently ONE thing? To get their hair done.
c. Why have 120,000 sq. ft of retail space and at any given time only 4,000 of it is occupied?
d. Why build a subway system if the general population doesnt earn enough money to use? Hence making it unprofitable and White Elephant. You cant raise fares to make it profitable because ridership would drop to almost 0.
I will have to bow to your expertise on this as I am not very well versed in DR biz. It seems strange to me but then again I am American and this would not be the first thing DR related that I am confused about.
Send you CV... We may have one spot opening up at our field office on Sadr City, in Iraq...
And I'm certainly NOT joking with you...:cheeky:
I don't know if you noticed it already (I mean since you say you LIVE here in the DR) but the DR is evolving all around. The old colmados are going away being replaced by specialty stores. Old marketas are being demolished in favor or large hypermarkets. The small independent store operators are abandoning the single premise structures in favor or the shopping centers, etc...
That change is what created the need (in the mind of those behind that unnecessary space as you claim) for that big space around, since once built, it would be very hard to keep expanding as demand peaks later. Will demand peak? Given the growth of the DR economy is the most likely thing to happen. The diversification has to do more with the culture than what you think is development of biz characteristics. Unlike in the U.S. and Puerto Rico *where you come from, Dominicans have a special fidelity bond to these niches on the biz market. Again, it's a Dominican thing you can't grasp even if you wanted to...
Dominicans think very long term, more than the usual biz people from abroad would dare plan and project into the future for...
Why can't people in Santo Domingo pay the fares as of today according to you, when in fact the Metro is cheaper for a many than having to take several forms of transport and a big wasted of their time in the way to that. Over 117,000 daily average ridership speaks differently about the Metro than your numbers... The real fare for the Metro once all lines are integrated and the feeder system is in place will be RD$35 pesos for two sectors/links, RD$40 for 3 or more sectors/links. Waaaaaaaaaay cheaper than what they pay today in the same routes and at superb time savings!
Unlike what you keep posting around, the Metro is a public infrastructure that will service the Metro Area and beyond of SD, and serve as the link for the future Santiago - SD Fast speed train service between the two cities. The two most populated/developed cities in the DR...
There's no expertise about anything, just the regular way of life for people in the DR as we know it. That accounts for how biz are conducted here for the most part. Those that learn the way, are the ones that become established firmly in the country.
When Robert (Cobraboy, MotoCaribe) learns to tap into that Dominican vein in biz, he will enjoy an unprecedented biz security and growth/expansion beyond his wildest expectations for the biz model he envisioned on the genesis of his venture.
I see the megastores and parking lots FULL of cars. I see very few people though buying food in larger than 3000 pesos purchases.
Bullsh!t.
Hahahahahahahaha! That is Elephant Sh!t. Who believes that? Think long term or Dream long term? Which is more accurate?
In 20 years the mall will be packed with people, buying, shopping and enjoying. In 20 years Terra Mall will be obsolete replaced by a bigger, grander, more ostentatious mall with 7 floors and a water fountain AND moving sidewalk built outside city limits, still with less than 20% occupancy. But according to you there will be a steadfastly strong Dominican middle class who will show up in their laser cars to buy Louis Vuitton bags, Citizen watches and Kraft Macaroni and Cheese by the ton.
Yep, just like those busses from Brazil right?
OK! So we have our first confirmed attendee to the "DR1 Dominican Biz 101 seminar" to be conducted in Santiago soon!
PICHARDO, if you REALLY conduct a seminar I will attend... I sometimes think you live in a futuristic "wanna-be" society (whereas such society would not necessarily be bad) but that is quite detached from the reality,...BUT maybe after meeting you I will change the opinion.
I somewhat disagree with my friend PICHARDO.
Dominican business is not really different than anywhere else. GAP is the same here as elsewhere, debits and credits don't change. Tax laws are variable, but net taxation in the DR is very high in relationship to GDP.
You form and capitalize a corporation that creates a beginning balance sheet. You sell a product or service to generate revenue, you have direct costs associated with that revenue, G&A expenses to cover with the gross profit and taxes to charge/withhold and pay. Frankly, many costs are very high and often are not mitigated with cheaper labor.
Investors have an expected ROI. The only possible variable may be what the expected ROI is and how the product/service is marketed.
Sorry, when it comes to the nuts and bolts of business, it's no different in the DR than elsewhere...except for the propensity to cheat on the high tax level. If a company doesn't pay ITIBIS (16%) and doesn't record employees and pay the various employment taxes (14% + not paying the employee withholding of 5.91%) maybe a better return is possible. But they have to cheat to do it.
Sorry. Unless the rent on the 25% occupied spaces is ridiculously high, or the investors "plan" to lose $$$
cheeky, that mall is a cash black hole.
Dominican business is not really different than anywhere else. GAP is the same here as elsewhere, debits and credits don't change. Tax laws are variable, but net taxation in the DR is very high in relationship to GDP.
You form and capitalize a corporation that creates a beginning balance sheet. You sell a product or service to generate revenue, you have direct costs associated with that revenue, G&A expenses to cover with the gross profit and taxes to charge/withhold and pay. Frankly, many costs are very high and often are not mitigated with cheaper labor.
Investors have an expected ROI. The only possible variable may be what the expected ROI is and how the product/service is marketed.
Sorry, when it comes to the nuts and bolts of business, it's no different in the DR than elsewhere...except for the propensity to cheat on the high tax level. If a company doesn't pay ITIBIS (16%) and doesn't record employees and pay the various employment taxes (14% + not paying the employee withholding of 5.91%) maybe a better return is possible. But they have to cheat to do it.
Sorry. Unless the rent on the 25% occupied spaces is ridiculously high, or the investors "plan" to lose $$$
cheeky, that mall is a cash black hole.
The whole perception line is BS. A dead mall, is a dead mall, why do Dominicans see it different to the rest of the planet? Much of what PICHARDO posts about is true, but just not reality or based on actually doing it.
When I have more time, I will post my 12+ years of experience at selling tourism products and services in the DR, to the local and expat market.
When I have more time, I will post my 12+ years of experience at selling tourism products and services in the DR, to the local and expat market.
Ok so if the whole perception line is BS, then how come (again taking Cobraboy biz as example) just like I described, Robert runs his biz from the home office? How about if and when he decides to seek expansion by a brick and mortar presence beyond the home office (as I pressed him to do) and into a store?
What happens then? Did Robert's home office biz disappear all the sudden after that? Does the store/kiosk presence in Terra Mall (hypothetical) negates the income from his off store operations all the sudden? Does not having an extra exposure in a Mall bring in new clients that were not there before to begin with?
Just like Office Depot... How long was Office Depot running from a cubicle in SD before the first store opened up? Does that store translates in all their previous clients and sales declining based on foot traffic there?
Just like NanaKira ( see http://www.dr1.com/forums/dr-photo-walks/118379-shops-restaurants-bars-clubs-etc.html ) got started in a home office and then moved into a new place. Did all their base clients go up in smoke because the foot traffic in the new store is only 3 or 5 clients a day at best?
Or how about DR1? Did a website all the sudden went downhill once you moved your home office into your new digs?
Did el Carrito de Marchena start up as it is today and now when moved into the Puerta del Sol, all went kaput after that, based on foot traffic? *Whom btw is at my old friend's home in kissimmee today visiting with his family and I'll be showing all the nonsense here posted to get his take on this. I'm sure he'll laugh his rear off...
Did Grupo Pichardo lose all our income once we invested overseas?
I got my start from a small office room in my late father's rent-a-car, years later I have investments not only in 15 national market sectors, but overseas as well... Did the first biz I create in that office go away all the sudden when I move into the first store?
So you're saying that all markets are the same no matter where in the world? Tell that to American big biz trying hard to see why they keep falling from their seats in China or Japan or Korea or Mexico or Brasil or ...
If all markets were the same treat, we wouldn't have a need for partnerships in global biz.
An American dead Mall is not equal to a Dominican dead Mall by any comparable margins Robert! They are not based on the same market B2B synergies found here. You can't even start to compare head to head what becoming an anchor store for a Mall in the DR is as you do in the U.S./U.K./CA, etc...
Cobraboy said: Dominican business is not really different than anywhere else. GAP is the same here as elsewhere, debits and credits don't change. Tax laws are variable, but net taxation in the DR is very high in relationship to GDP."
I beg to differ...
Dominican biz are nothing alike or close to how you carry out a biz in the other markets like the U.S/U.K./CA, etc...
In the DR you open up a supermarket *any type*, stocked it up to the max and open the doors. The very next week prices jump in your inventory supply chain but your sales are figured at the markup based on the old prices. So now you sold 10,000 items that cost you 10,000 pesos to stock up last week and the new inventory calls for a major increase above that. Where do you think that money is going to come from?
Cobra and Robert are two fine examples of how biz start in the DR and how the grow out (well in this case we're waiting for Cobra to take a leap of faith and expand his horizon and client base a bit). How they're able to open up a shop later in a real store and be happy that two or three clients walked in.
Ask Pepin Corripio how his biz got started in the DR... The Lama, etc...
In the DR biz won't come to you on foot traffic, it's you who must drive them all the way to you from their homes.
Sometimes external factors can have a massive influence on your business.
Tourism has been devastated in the past 5 years in the DR, just like many parts of the world.
Take it from us and many other smaller players that have seen sales volume drop.
We have seen a drop in sales, primarily due to businesses going out of business, not cutting back, big difference!
Sales in the DR are based primarily on relationship and a distant second through media buys based on "actual" numbers, knowledge, demographics etc.
I have lost count the number of ridiculous decisions made by local businesses when it comes to online advertising. Especially when you get into new client acquisition, retention, ROI etc. The very few that get it are cleaning up, the majority are clueless.
Most local agencies have limited knowledge, but will charge as if they are experts. Ignorance is bliss
This is a VERY immature market when it comes to online, light years behind the USA. The upside is the opportunity to educate and train companies on how to do it right, based on the "real" world, as opposed to their primo that bummed his way through "Chavon", has a Facebook page and now assumes he's an expert.
If you want to make money, offer real training, charge $$$, Dominicans will eat this up.
Tourism has been devastated in the past 5 years in the DR, just like many parts of the world.
Take it from us and many other smaller players that have seen sales volume drop.
We have seen a drop in sales, primarily due to businesses going out of business, not cutting back, big difference!
Sales in the DR are based primarily on relationship and a distant second through media buys based on "actual" numbers, knowledge, demographics etc.
I have lost count the number of ridiculous decisions made by local businesses when it comes to online advertising. Especially when you get into new client acquisition, retention, ROI etc. The very few that get it are cleaning up, the majority are clueless.
Most local agencies have limited knowledge, but will charge as if they are experts. Ignorance is bliss
This is a VERY immature market when it comes to online, light years behind the USA. The upside is the opportunity to educate and train companies on how to do it right, based on the "real" world, as opposed to their primo that bummed his way through "Chavon", has a Facebook page and now assumes he's an expert.
If you want to make money, offer real training, charge $$$, Dominicans will eat this up.