“Too see is to believe” and The Bandwagon Effect
Image from Grace’s Weblog
There is a culture among us that subscribes to “seeing before believing” and “joining a bandwagon” rolled into one. This copycat style of doing business among us gave rise to some successes but many failures for those who took the “hot pandesal”, “lechon manok”, “pearl shakes”, etc. in the past. This is the same reason why he have so many “sari-sari stores”, “ukay-ukay”, “pondahan” and bakeries in our neighborhoods.
The same true with i-cafe business nowadays. In many areas, i-cafe establishments are opening in numbers much more than those closing shops. This situation results to supply being much greater than the demand for the service in the area. This is precisely the reason behind the ever-decreasing rate of computer rent in many parts of the country. When will this trend ends, nobody knows.
This so called “bandwagon effect” or “gaya-gaya” attitude is a human trait and not restricted to “us” or the Filipinos. A quick browse of history will show this and this phenomenon is not restricted to business enterprises. One example is in the US where in the 80s or 90s, the mom & shop laundry business started booming. Initially, the profits made were good but as many shops were put up, competition became very tough, margins became small and soon many shops closed.
Even though often times criticized, there is logic in joining the bandwagon effect in business. A number of good points are: Sure market, high probability of sure sales and low capital needed to expand. This can be similar to the idea of selling only during the Christmas season where the demand for your products are expected to be high. One can also point out that some prefer to go to a business where there is demand, even it is expected to last only a few months or years.
Ed Zafra: @Anonymous – I should say that the “bandwagon effect” is really happening to the cafe industry not only now but for also for the past one year or so. This results to many cafes closing shops although many more are opening. The outcome is oversupply causing the prices to go down.
The cafe business can also be considered as capital-intensive so those who joined the bandwagon and closed shop in less than three (3) years from opening lost their capital. A more thorough study of the market in the are where one intends to locate his cafe is hereby advised.
Yes, the bandwagon effect is indeed happening to the internet cafe industry. As a result, prices will go down, shops will close, customers will benefit, some shops will survive, some will not and the business cycle goes on.
However, this copy cat style of doing business is not a culture unique to Filipinos. This is a common human trait. It can be seen everywhere like the proliferation of reality shows in the US, the rush of cell phone makers to develop touch controlled cell phones, the rush to develop web-based businesses during the late 90s to early 2000s, etc. When there is perceived financial opportunity, many will rush in.
This discussion brought to mind my memory of the ‘lechon manok’ craze mmany years ago. The numbers of ‘manukan’ have increased in virtually every city and town that I even thought chickens would ultimately be extinct in our country [14 years old pa lang po ako kaya ganun imagination ko]. Now, it seems, the same phenomena can be observed with the increasing number of internet shops.
Truth be told, I was unexpectedly ‘recruited’ into this industry because my mother [biz partner and financier – hehe]saw gold coins as she observed how jam-packed I-cafes are in our small town [Norzagaray, Bulacan]. But as in any enterprise, business or otherwise, the rules of natural selection applies. Those who will not change and adapt to the lightning-fast evolution of technology would eventually perish. I foresee, a decade from now I-cafes would be unrecognizable compared to those existing today. They would be offering a bevy of services, not limited to simple online gaming or social networking or web surfing.
It is opportunity that I am hoping to take advantage of in order to survive and make my shop flourish. I am constantly researching, studying and ‘pirating’ ideas that I could incorporate into my I-cafe. Considering that current government [local and national] legislations are quite ‘hostile’ to the usual I-cafe model [web surfing/gaming], the only way my business could stay afloat is to change, offering services that my community would find ‘acceptable’ and even productive.
I too am thinking of the same thing. That is, to move away or minimize the computer rental part of my business and concentrate on other money making services or other computer related businesses that do not get the ire of teachers, parents and municipal authorities.