Starbucks in Khon Kaen, Thailand: New Green Mermaid Will Soon Shine Next to Golden Arch
October 5, 2015
Khon Kaen. Just less than a decade ago, there was only one airline flying back and forth from Thailand’s capital to this northeastern city. Today, Air Asia, Nok Air, Thai Smile, and a legacy flag carrier THAI fly between these cities throughout the day to transport growing fliers. Once you land Khon Kaen Airport, you will have to walk the ramp side (except THAI, which uses a jet bridge for convenience as it is a full service carrier), whether it is sunny or raining cats and dogs, all the way to the building to claim your luggage or directly head to hail a taxi. Interestingly, there are many foreigners traveling to this city. However, most of them are probably not tourists. There were even no meter-taxis a few years ago but now a meter-taxi counter is kindly available in the airport to send growing foreign and domestic visitors to their destinations in the city. While a number of flights to Khon Kaen have significantly increased over past years, a second Starbucks store debuted when Central Plaza Khon Kaen department store opened its door in 2009. In coming months, the third Starbucks store in Khon Kaen is expected to inaugurate in the out scurf of the city.
Khon Kaen is growing moderately while most foreign travelers ignore this city, instead traveling to mountainous Chiang Mai or tropical Phuket. However, this northern city is welcoming returning foreign visitors everyday thanks to its calming and rural environment throughout the city and if needed, Central Plaza department store, where most foreign and domestic retail stores including Starbucks are available, is conveniently located in the heart of the city. Along with Central Plaza, aging Tukcom department store is also located less than a quarter mile away and it is where the first Starbucks store in Khon Kaen has been serving its coffee for a decade.
Per capita GDP in Khon Kaen is not quite attractive at 109,556 Baht or US$3,002 at today’s exchange rate (as of September 29, 2015), comparing Bangkok Metropolis’ 466,844 Baht or US$12,796. Population of Khon Kaen, on the other hand, is pretty populous at 1.7 million, which is about the same size as tourist-oriented Chiang Mai, while westerners’ favorite tropical Phuket and Krabi are less populous but are wealthier. For instance, per capita GDP of Phuket is 250,952 Baht or US$6,881 but the population size is smaller at a half million.
Prices of Thai people’s all time favorite Green Tea Cream Frappuccino (Tall size) and morning hot Caffe Americano (Tall size) are 155 Baht (US$4.25) and 95 Baht (US$2.60), respectively. Simply analyzing with their annual income levels, average people in Khon Kaen can consume about two cups of Green Tea Frappuccino per day for annually while residents in Bangkok can enjoy more than 8 cups of it per day throughout the year. With that 155 Baht in Khon Kaen, you can have two or three dishes of local food, such as spicy papaya salads, chicken curry, and basil pork. Or one can just enjoy a lunch set at air-conditioned Fuji Japanese restaurant in Central Plaza. That being said, Starbucks drinks are relatively expensive for local Khon Kaen residents.
Basic Facts: Khon Kaen, Thailand | Sources: Starbucks Investor Relations, Starbucks Thailand, National Statistical Office of Thailand | Population and GDP data are based on year 2013. Number of Starbucks stores in Thailand is as of first quarter ended 2015. Exchange rates are as of September 29, 2015.
Total Starbucks stores in the Kingdom are 211 (as of the first quarter of 2015). Most stores are located in Bangkok and its number is significant at 89 or more than 40 percent of the stores are settled in the metropolis (there could be more Starbucks stores across the Bangkok metropolis). According to Bangkok Post newspaper, the company is expected to double the store count in Thailand to 400 by 2018. Thanks to modernity-oriented Thai people, especially in Bangkok area, the company seems very aggressive to serve its coffee throughout the Kingdom. In Khon Kaen, there are two Starbucks stores available so far but the company is expected to roll out its third store in the out scurf of the city in coming months.
Starbucks in Khon Kaen
Starbucks stores in Khon Kaen are indifferent from those in Bangkok. An each store is as always modern and clean while it is probably one of the few places in the city where you can speak English to communicate with friendly Starbucks employees. The store in Central Plaza seems more popular than a decade-old Starbucks store in an aging Tukcom Center, where used to be the center spot of the town before the Central opened in December 2009. However, the Starbucks store in Tukcom is more private and quiet as it is located in the corner of the mall while the Starbucks store in Central Plaza is located in the center of the hallway on the main floor without any partition, which makes very noisy throughout the day, especially on the busy weekend. That being said, the store in Tukcom is favorable for those who want to enjoy coffee with privacy and quietness. Plus, the finest moment in Tukcom Starbucks store is probably sipping coffee while enjoying stormy weather through the windows during the rainy season.
After the company successfully welcomed Khon Kaen residents at two of those indoor shopping malls, Starbucks is stepping into a new stage. A third Starbucks store is opening in coming months on the shoulder of the main road I-2, about a mile south to Central Plaza. This area is mostly unknown, especially for foreigners, but it is known as Wufoo i-San Trading Center, where a large number of individually owned shops are gathered together to sell thousands of copycat products at ultra-thin margin under intense perfect competition. Thus, the local customers tend to be stingy while asking deeper discounts from original tags (but seller of course have set higher price tags to get higher margin).
In such neighbor, the new Starbucks store is going to open soon. However, Starbucks is not the only one. The world-largest franchise, McDonald’s, has just opened the two-story flagship store in past months just right next to Starbucks’ construction site. This 24/7 McDonald’s store stands elegantly, showing off its shiny golden arch visible to every driver on the main road. In addition, a newly-build KFC store is also located less than a half-mile away from the Starbucks’ construction site and its glittering red light along with smiling Colonel Sanders is attracting drivers throughout the day.
Whether the new Starbucks store will be open 24/7 or not, the green mermaid is going to shine right next to the golden arch momentarily. Unlike Central Plaza, where city’s modern shoppers love to hang out, their locations are quite off from the popular areas. There must have a great reason that two of the world’s largest retailers have chosen this place to welcome local residents into their modern western culture.
McDonald’s, KFC, and soon-to-open Starbucks are all positioned within a few distance and lined up on the shoulder of the northbound I-2 main road, which connects to Udon Thani, Nong Khai, and all the way to Vientiane, the capital city of Laos. From the south, I-2 merges from I-1 that begins from the north of Bangkok Metropolis and goes through populous Nakhon Ratchasima, also known as Korat, to Khon Kaen. Over the past several years, the traffic suddenly intensified around central Khon Kaen or it should have said that the huge traffic began forming in the south of central Khon Kaen, where McDonald’s, KFC, and Starbucks’ construction site lined up. Both Ronald McDonald and Colonel Sanders welcome 24/7 and offer a drive-through lane for drivers’ convenience. Green mermaid is expected to offer a drive-through lane but it is not known yet if it is open throughout the day.
I have been to the new McDonald’s store for a couple of times to grab my favorite breakfast muffins and fleshy hot coffee. The store is very modern. Electric displays at the counter conveniently show off promotional menus along with ordinal breakfast set menus. Tables and couch are available throughout the store while you can sit back and relax with Ronald McDonald on the bench outside. In the morning period, I only saw a few customers in the two-story store. On a next morning, I just used a drive-through for my convenience while no car was forming a line. A drive through is still an early stage in developing Asian region, including China. Of course, McDonald’s drive-through is certainly very new to Khon Kaen drivers as well. It took more than five minutes to grab my breakfast despite the empty drive-through lane.
(L) A newly opened McDonald’s store on the main road welcomes drive-through customers. However, the drive through is not widely known among Khon Kaen residents yet. An empty lane has no wait time to order but this McDonald’s employee is also not familiar with the drive-through system, which causes more than five minutes to wait at the pick-up window. (R) Ordered hot coffee, whose price is 35 Baht at McDonald’s drive through while the new Starbucks store next door would offer its Brewed Coffee at 95 Baht once it opens. If drivers want to grab a cup of coffee, which drive through lane would they choose?
On the other hand, KFC seems quite popular, especially in the evening, as it is located right next to Tom Tan Market, where a variety of food venders and individual shops are in full swing in the evening. KFC nicely matches well in the neighbor and its ability to focus on Asian food culture probably yields the best. If you dine at KFC in Thailand, your fried chicken menu is served on the dish along with stainless steel knife and folk. For foreigners, it is common to eat it with hands. However, Thai people dislike doing so. They like to use knife and folk to bring a fried chicken piece by piece into mouth. McDonald’s, on the other hand, offers its meal as same as they do in the United States (but McDonald’s Thailand offers rice menus, such as McChicken Teriyaki Rice, not a burger). Thai people tend to hesitate using hands to eat, especially non-Bangkok people, who rarely get in tough with western culture.
(L) McDonald’s Thailand offers rice menus, such as McChicken Teriyaki Rice and more Thai-oriented McKao Laprao, in addition to ordinal burgers. (R) KFC’s great respect to Asian culture yields the best. KFC Thailand serves its meal on a dish along with folk and knife for polite Thai customers, who dislike using hands to eat.
The third Starbucks store in Khon Kaen is likely to face a big challenge. Despite growing traffic, most divers on the main road are not as wealthy as those in Bangkok and they even tend to ignore the newly opened McDonald’s, right next to Starbucks’ construction site. Many employees of one of tire companies on the main road, just south of the McDonald’s store, have recently owned a car after commuting by a motor-bicycle for more than a decade. Though they never have enough spare money to step into the McDonald’s or KFC. Rather they are willing to dine at a local restaurant for having their familiar and delicious, yet reasonable dishes.
Income per person in Khon Kaen is more than four times smaller than Bangkok’s. While Starbucks offers a cup of Americano (Tall size) at 95 Baht, next door McDonald’s offers its 8-oz coffee at reasonable 35 Baht (McCefe offers similar regular-sized Long Black coffee at 80 Baht). Starbucks’ popular Green Tea Frappuccino, for instance, costs 155 Baht. On the other hand McCafe offers the similar Green Tea Frappe at 135 Baht. Both Starbucks’ and McDonald’s dinks are already pricy for local residents of Khon Kaen. Importantly, most local people are not familiar with modernity, like Bangkok people are. That makes reasonable McDonald’s and McCafe yield better off for them. Plus, more and more retail shops are offering coffee at more reasonable prices than what Starbucks offers. S&P restaurant, for instance, now offers Blue Cup Coffee vender in its house, like McCafe, to promote more choices of beverages in addition to its popular Thai dishes as well as pastries. Blue Cup’s Iced Caramel Macchiato costs 105 Baht, which is 25 Baht more reasonable than Starbucks’.
However, Starbucks in Khon Kaen, including the soon-to-open Starbucks store, is still in very early innings of the game. Starbucks in Central Plaza has already gained popularity among Khon Kaen’s gradually growing middle class consumers, who are always seeking for new fashion and modernity. Meanwhile, the opening-soon Starbucks store on the main road will add a new coffee culture, including coffee drive-through, for residents of Khon Kaen as well as northbound drivers. It seems like this store will be a two-story building that can accommodate more customers than ones in Central Plaza and Tukcom. Customers can probably enjoy aerial views of the neighbor while sipping coffee in a more quiet and private atmosphere. Although it is not sure yet if the Starbucks store will be open 24/7, it is sure that the green mermaid will shine right next to the golden arch to attract many drivers on the road. It is like an oasis and the new Starbucks store will certainly provide a new third place for Khon Kaen residents as well as visitors.