Upmarket cafes were very hot in Ipoh for a while 2-3 years ago. Cafes mushroomed almost everywhere out of a sudden. Many were tastefully decorated, quaint looking, cosy, with everyone one of them seemingly trying to outdo one another. Some have “unique” selling points, like offering self made bread, pastry, high speed Internet connectivity etc. But the fever has died down a little lately, to me anyway. Here is an article that offered some insight into what it is like to run a cafe business in Ipoh.
Some of the business owners are fairly honest when asked about the challenges facing them when running their businesses in Ipoh. Some seemed to either just put on a brave face or they didn’t know where they failed, if I’m being honest. I’ll let you figure out who was or were talking rubbish. But I would agree on the following points for the Ipoh market:
- Competition from the popular white coffee, both taste and price
- Standalone coffee enjoyment without main meals not so popular here
- Appettite for western coffee is there, but market is not big enough to sustain so many cafes
I have no problem with the price points of their coffee. They are their premium offerings, and should rightly charged as they are. But I have a lot of issue with the price points of their other offerings, like desserts, light bites (sandwiches included) and even main meals! They are deluded, thinking that the Ipoh folks earn as much as those in KL and Penang. In fact if I go to KL, I get better (much better) value for money, on both coffee and food! Incredible isn’t it? But it is!
Basically, your business needs to survive and sustain in such competitive environment first, with so many cafes around, and price reasonably. Lower your cost and overhead, target the right audience and offer value to these customers. Ipoh folks always like good bargains, and they will come back to you if you offer them good value. Tourists business is good, but it is often one-off, and there are not that many tourists coming to Ipoh. Businesses in Ipoh need to first and foremost focus on the locals. Otherwise it will be the same old story. You have been warned.