By MOCH N. KURNIAWAN
The merchandise of cheap underwear, hot plates, sweaters and socks spills over into the sidewalks of Mission Street for five full blocks south of 24th Street.
Dozens of discount stores line the five compact blocks. Green, yellow and blue awnings shout in colored lettering: Mega Trading, Win Yen Co., Long Power Trading Co., Golden Plaza Trading Co.. One right after another, nearly a dozen crowd one block between 23 and 24 Streets.
For years, the discount stores, a slice of Asia cut into the mostly Latin America neighborhood, have competed successfully for residents looking for a deal. But with business down and rents up, they now share two similarities, joked one of the owners.
“First, the stuff, and second, the sales decline,” said Philip Lee, the owner of Golden Plaza.
Most owners and managers declined to talk about business, but Lee, an immigrant from Malaysia who has run the store as a family business for 20 years, echoed the few who did: Survival meant a switch to local suppliers several years ago and an ongoing relationship with customers. Like two others, he complained about, higher rents and an unhappy experience with a business association.
When the economy here was good, importing directly from Asia gave Lee a high profit margin. The math was easy–he could buy a huge number of products at cheaper prices and Mission residents bought them at better prices.
“Dahulu, saya impor dari China, beberapa dari Indonesia seperti bola dan pakaian anak perempuan.” Or, “In the past, I imported goods from China, some from Indonesia such as soccer ball and girl dresses,” he said in Malay, adding that he also speaks Spanish, Mandarin and English.
However, when the economy tumbled, he switched to a local supplier.
“Right now, people reduce their spending,” he said. “If we stockpile many items through import but only few people buy, we will lose a lot of money. So it is better to buy from a local supplier who has more money to import goods.”
The owner of Parkson Trading Co., David Yong, said he has been in the business for 15 years and buys from a big trader in Los Angeles, where land and warehouse rent is cheaper than San Francisco.
“I have two stores. Both are supplied by an LA wholesaler who imports stuff from Asia such as China, Bangladesh, and Vietnam,“ said Yong while sitting in front of his store. “But this shop is now dying because the rent is just too high.”
The rent, he said, had skyrocketed to $7,500 a month from the $4,000 a month he paid 15 years ago.
“That is bad news, but at least I still have one more store, which is also difficult to survive,” said the father of two, who came here from Singapore some 20 years ago.
Lee too complained about the rent on his store, which is more than $6,000 a month. “But I also do business in Hong Kong and Malaysia and trade stocks,” he said, adding that this helped him survive—at least until recently, when the stock market plunged.
Maisie Wong, the manager of A.C. Trading Co., which is owned by Chek Chew Ng, also said she began purchasing inventory through a Los Angeles trader three years ago.
“Sixty percent of our goods are Chinese products, the rest come from Indonesia, Bangladesh, Malaysia, and South Korea,” said Wong, who was born in Hong Kong.
Her boss, Ng, she said, came to San Francisco from China 30 years ago, and opened the store in 2001.
Wong said they stopped importing directly because business declined and import costs went up. “More permits mean we have to spend more efforts and money,” she said. “That was not good as we wanted to keep our costs low.”
Wong said there was once an association that was supposed to voice retailer interests, but it ceased to operate six or seven years ago.
“The organizers were corrupt,” said Lee. “We donated money to them but we never knew where the money went and they did not do anything for us.”
Wong added that the association also suffered from lack of financial support from the government.
“There is now a merchant association with the members are mostly Latinos. But we don’t have a Chinese retail association any more. That is okay because our chief focus is to earn money, money and money to survive,” she said.
At present, the retailers are content with their informal network.
“We know one another because we are neighbors,” Lee said. “Sometimes our customers also tell me about the prices in other stores, but mostly I set my prices based on my experiences to value the materials of goods.”
A quick survey of prices showed a largely uniform pricing pattern, but some retailers offered better prices on a few items.
For example, a package of three color t-shirts generally costs $9.99. However, a few places charged $11 a bag and one even $12. A sweater in one store sold at $15 but it was only $13 in another store.
Lee said business was not merely about prices, but also quality and stock.
“Prices of some items vary from one store to another. New players usually need to lower their prices to survive, but we don’t follow others most of time as we have more experiences than them,” he said. “Product quality and sustainability of the stocks also bring back our customers.”
Even though I thought I knew this the article was interestin and I did learn something new.