International franchise stores in the capital, once a thriving business, are now seeing their businesses decline. Franchise stores are business that operates under the name and proprietary business knowledge of another business. There are several international franchise stores in the country and many of these franchisees say they are seeing fewer customers these days. Coupled with the government’s limited foreign currency reserves has hampered their business leading to sustainability issues.
BBS talked with around eight franchise stores in Thimphu.
The franchisees refused to talk on camera but said that owing to a lot of similar stores, competition has increased.
According to Koja, a Korean and Japanese brand, which has three stores in the country, over 70 per cent of their sales have been affected.
Similarly, sales for Miniso, MIDI, and Things8 stores have declined by over 50 per cent.
And, XimiVogue is closing shop since they are operating other businesses.
Staff working for these brands say except for some customers during the weekends, the number has decreased drastically.
Meanwhile, customers BBS talked to say there are many franchise stores offering similar products.
“With the increase in franchise stores in the capital, customers mostly go for affordability and availability. I just go to one franchise store,” said Tshering Dema, a resident.
“Previously, there was just Miniso. Now, there are a lot of franchise stores in the capital. I do not see a lot of customers in Miniso now. Earlier, people used to rush and the store used to be full of customers,” said Tandin Dorji, another resident.
“I do not come here often because I feel franchise stores are for young people. I came here today to buy something for my friend,” said Sangay Wangmo, who is also a resident.
Furthermore, with the government’s limited foreign currency reserves, the franchisees say their sector will bear the brunt if there is foreign currency reserve shortage.
Most franchise stores in the country originate from Japan and South Korea. According to the Bhutan Trade Statistics for the first quarter of 2023, goods worth almost Nu 300 M were imported from Japan and South Korea.
Tashi Yangden
Edited by Tshering Zam
