Siam Wellness eyes regional expansion
SIAM WELLNESS GROUP Plc, owner and operator of the day-spa brands Let’s Relax, Rarin Jinda and Baan Suan, aims to plant its flag in at least 15 countries in Asia by 2020 after opening its first overseas franchisee in Kunming, China on Saturday.
President and chief executive officer Wiboon Utsahajit said the next potential market was Luang Prabang, Laos. A spa could open there this year.
The company has 24 spas in Thailand that it operates – 15 in Bangkok, three in Chiang Mai, two in Phuket and one each in Pattaya, Koh Samui, Krabi, Hua Hin and Phuket.
Wiboon said the company was also eyeing launching operations in Cambodia, Vietnam, Myanmar, Indonesia, Singapore, Philippines, Malaysia, Brunei, Japan and South Korea.
“Our business expansion overseas will have three business models – the franchise system like in Kunming, a joint venture with a local partner and self-investment,” he said.
“This [the model] depends on the business opportunity and the legal conditions.”
For franchises, the company’s entrance fee is Bt4.5 million for a five-year contract.
It will provide training and advice on a business plan and take 5 per cent of the revenue a month.
Kunming Tailai Spa Management Co Ltd is the franchisee that operates Let’s Relax Spa in Kunming and has plans to open spas in Chongxing and Sichuan provinces.
Its director Wang Ruoming said the company expected to make four million yuan (Bt22 million) in revenue in the first year of operations of Let’s Relax Spa in Kunming.
The company spent Bt10 million on the design of the business under a Thai spa concept.
It plans to open three more branches next year if the first branch is a success.
“The purchasing power to pay for spas in Kunming is showing strong growth as most of them are also interest to use an original Thai spa,” Wang said.
“As a result, we decided to open the first Thai spa in Kunming.”
Siam Wellness Group has set aside an investment budget of Bt500 million this year, with Bt250 million to be spent on 10 new branches in Bangkok and the provinces and renovating existing branches.
The rest will be spent on spa mergers and acquisitions and acquiring restaurants and other service businesses.
The company said the 10 new branches would employ up to 300 staff this year. At the present the company has 900 staff.
Wiboon said the investment budget would come from cash flow and bank loans.
He said the move would result in total revenue increasing more than 35 per cent this year compared to last year.
At the end of 2015, the company reported total revenue of Bt543.5 million and a net profit of Bt106.49 million.
In the first quarter, it reported total revenue of Bt176.02 million and a net profit Bt35.24 million.
Of its total revenue, 84 per cent comes from its spa, 11 per cent from its hotels and restaurants and the rest from the sale of spa products.
Three-quarters of its customers are foreigners and the rest are Thai.
