Ellie95

Hi guys

So I understand Dealz (Poundland) has about 10 shops in Spain already Nuestras Tiendas | Dealz.es. Now
having lived in Britain most of my life I am sure most will attest to the fact that the high street in every city/town has atleast one of these chains in whatever skin- Poundland, Pound Zone, 99p store etc. Given that the idea seems to be catching on in Spain I am just looking to get your opinions on whether it would work- specifically on the Costa anywhere from Torremolinos (there is already 1 there) to Marbella.

I have come across some pound shop suppliers, the margins aren't great- as you'd expect it's a volumes business but I am just wondering if it's worth pursuing if one has the capital resources. Any inputs welcome thanks

jonboy

There seems to be another popular brand called the "Chino Tienda", they are based throughout Spain and source their stock from good old China.

Dick Dasterdly

How times have changed,
We used to have 100 peseta shops, good value for odds and ends and not all Chinese products back then.
They were followed by 1 euro shops which weren't around very long before the Chinese squeezed them out with their own products opening Chinese bazaars all over the place.

Over the past few years many more have opened up, including some really big ones and since they've cornered the market their prices have gone up a lot, to the extent that very recently I've found some items in Spanish Ferreterias, cheaper and of better quality.

I imagine to open the type of shop you mention, you will be relying to a large extent on Chinese goods.
If you have a trade card they can be bought fairly cheaply at Chinese import warehouses, I know there is a huge one in my area at Valencia for instance, but I imagine you will then find yourself in direct competition with the numerous Chinese bazaars in the tourist resorts.

Anyway, Best of Luck whatever you decide.

rachelk

There's a Dealz in my little corner of Málaga - I was surprised how much like a UK poundstretcher it was, very similar products though with a few spanish items in the food/snacks section. Some old favourites from the UK as well.

There were plenty of spanish people shopping there when I visited. It's not in in area where there are often ex-pats or tourists but I imagine it would be popular with them as well.

Rosemary

When I first came here there were loads of Spanish run shops selling the types of things that you are talking about but as Dick says they have gradually disappeared and very large Chinese shops have taken over. In my neck of the woods I only know of one well established Spanish shop that has survived selling these goods, no idea how they have managed to do it but they have.

My thoughts are that there is little chance of starting up a new shop of this sort due to the Chinese shops, however I do not know what it is like in your area so I could be totally wrong with my thinking.

Rosemary

amideislas

For what it's worth, the "Chinese shop" is a well known brand here. Virtually every town has at least one, some towns have 5 or even 10.

They are open all day, 7 days a week and the prices are very low. And they have a huge selection of goods. Not all is worth buying, but many things they sell are exactly the same products found elsewhere for double or triple the price.

The locals know this very well, so these shops tend to be very popular. But they're everywhere. Personally, I wouldn't dare try to compete with that.

Ellie95

Morning all. Guys thank you for the input much appreciated. @ Dick Dasterdly would you happen to know what the Chinese wholesaler is called in Valencia? Do they have a website? @amideislas thank you for your realistic warning as well. @ Rosemary thanks for that bit of info- they must have have carved a niche for themselves that keeps them going.

I wil be doing further analysis and thorough research on this before committing any funds that I may be at risk of losing. I think the biggest mistake one could make is trying to compete head on, line by line with the Chinese.Because no doubt if you do not differentiate you will be squeezed out of business.

MikeJ

I think the competition will not be line-by-line but labour costs. Most of the Chinese bazaars/emporiums are franchises and run by Chinese families who don't pay themselves wages but just take living costs out of the business - they also get the younger members of the family working happily for nothing when they are not in school. They also have access to cheap loans through the ethnic networks. It is a different culture and mentality very different from our soft Western ways - work hard and endlessly to build up capital - which you will find very difficult to compete against.

JC3

Here in Malaysia we have a Pound Shop type store called 'Daiso' (from Japan). They stock upto 70,000 household products (but no food) and every item is RM5 + tax (about £1).

Watch out because a store like Daiso could eat your lunch. Daiso already has over 2,500 stores in the Japan, 29 in the USA, 37 in the Middle East, loads in Malaysia, Singapore, Mexico, Brazil etc. I would not be at all surprised if Europe is next.

See:
DAISO JAPAN
https://en.wikipedia.org/wiki/Daiso

JC3

Rosemary

I have just been told that the two huge Chinese shops that were nearby closed a month or so ago due to lack of income. Someone also said that they were thrown out of the premises due to non payment of rent, taxes etc but have no idea if either of these things are true.

Many Spanish people complain about the Chinese shops but as I have told lots of my friends if they do not go in an buy things they will end up closing and the Spanish cheap shops could flourish once more. Personally I buy those sort of bits and pieces from Spanish shopkeepers even though I know most of the goods have come from China at least I am supporting the local people.

Rosemary

olivefarmer

I agree with the general sentiment. You cannot compete with a Chinese "poundshop". Low overheads wage wise. High business rates. I suspect that China foots the transport bill for their goods to Europe. I recently bought my dad two identical products both off Ebay. The first was £4 and postage of £1.10 on top arrived next day. The same item as a back up came from China for 47p and free postage and arrived in 4 to 6 weeks as described on the listing.

In Lucena there is a three supermarket sized Chinese pound shop. Always more staff than customers.

In our local town the Moroccan "poundshops" have gone out of business one by one despite having been there for years. That to me is telling.

Privately it wouldn't surprise me if in years to come it is shown that they are some form of money processing enterprise with proceeds coming from elsewhere.

Dick Dasterdly

I see they are still at it.

! Spanish News Today - Massive Chinese Money-laundering Network Busted In Madrid, Barcelona And Valencia

There was another Chinese tax dodging network busted about three years ago.
There was so much money involved it distorted the Spanish economy

Ellie95

Wow guys this all very inciting stuff! I am new to Spain and in the process of learning the language etc. I thought obviously I could take lessons learnt from my short life that has been spent mostly in UK and maybe put some of them to good use but seems there are alot of barriers. @JC3 thanks for that input- I am sure big chains are monitoring "Dealz"'s progress closely to see if the model works and they may soon make a move as you rightly point out.

@Olive farmer that is interesting- given that you can generalise and say Europe has a "drug problem" and Spain obviously has alot of ports it wouldn't surprise me if it was all a cover up for some illicit dealings. I will do my project appraisal and really take into account all these risks that you guys have brought up- some of these things I wasn't even aware of.

But thanks alot guys I really appreciate it and I wish you all a wonderful weekend.

jonboy

I never did hear of what became of those accusations.

jonboy

OK Ellie95,

so should you not be Chinese you may wish to look at an alternative way into the market with a current tried and tested business. You know, like a franchise.
Inicio - Domti may be more to your liking. The locals seem to like it. Good luck with the long hours and the constant succession of customers giving you money

I have no connection with the business.

Oh yes and good luck!