More than soda
A local design firm makes good use of vending machines to provide more than 100 types of souvenir with novel designs and Macau vibes
What is your expectation of vending machines? What were your last purchases? More than likely it was for water, soda, chips or chocolate to temporarily satiate your hunger or thirst. But have you ever thought of buying keychains, postcards, stationery or paper models from vending machines here?
Local design firm Meet Culture Ltd. has installed more than a dozen vending machines since the end of last year at various tourist hotspots in the territory from hotels to shopping malls to Macau Tower to Macau International Airport, offering a wide range of products featuring the city’s World Heritage Sites and festivals with novel, colourful designs.
“When my [overseas] friends or family relatives come to Macau they usually take back home food souvenirs at the conclusion of their trips,” says Ken Ho, design director of Meet Culture. “So I had a thought: could they bring home other things like Macao culture rather than food?”
After Mr. Ho met Miquelina Hoi – who shares a similar perspective on the local souvenir market – through mutual friends the duo set up Meet Culture in 2016. Following research and preparation lasting a year the company forked out a “seven-digit investment” to come up with a series of souvenirs under the ‘Meet’ brand last November, which are mainly sold via vending machines.
“This [retail] model could help save quite a lot of money… as start-ups usually do not have a sufficiently large budget to hire many people [to man a physical store],” said Ho. “We think this is the appropriate model for us as we have many products in the pipeline [requiring development costs].”
Choosing vending machines as the main retail model, however, also has its own pros and cons.
“The operation is totally different from running a physical store, and vending machines here only sell drinks or snacks so we don’t have any references to fall back on,” Ms. Hoi, commercial director of the company, remarks. “We have to find out everything about the business on our own, such as when to refill the stock and how to handle customers’ complaints.”
Compared with other jurisdictions like Japan where a variety of products are available in vending machines the perception of the machines here is of receptacles for food and drinks.
“One of the challenges in the beginning [of our operation] was to get permission from the venues for the set-up of our machines,” she notes. “Some might think vending machines are only soda machines, which are not high-class enough for their environment. We have to use our designs to convince them and explain how our machines can revolutionise the [souvenir] market.”
The company now has 20 vending machines located around town, including Macau Tower, Macau International Airport, resorts like Studio City Macau, Broadway Macau, and some budget hotels like Asia Boutique Inn in Taipa. Visitors can also find ‘Meet’ products at a number of retail points in the city’s shopping malls like The Venetian Macao. The price of their products – including keychains, stationery and postcards – ranges from MOP10 (US$1.25) to MOP75.
“I’m aware that a simple keychain in the shape of the Ruins of St. Paul’s may cost some MOP80 in the market, which simply doesn’t make sense,” says Ms. Hoi. “If the pricing of our products is set too high, [tourists] won’t buy many to share with their families and friends. The money we’ve saved by using vending machines doesn’t mean we earn more; we use the money to improve our products and set the price range at a reasonable level.”
Better than expected
In operation for more than half a year, the company now sells an average of 3,000-5,000 items a month, which are particularly sought after by travellers from Hong Kong, Taiwan, Japan and South Korea. While its customers are mainly visitors, as the vending machines are placed in tourist hotspots, some locals have contacted them to look for their products, say the duo.
“Concerning both the sales and the feedback we have received, the overall performance so far has exceeded our expectations,” notes Mr. Ho.
“At first we were worried that this retail model might prove risky as customers might steer away from vending machines but it has turned out better than we thought,” adds Ms. Hoi.
The pair did not comment upon when they could recoup their “seven-digit” investment as they have continued developing new products, but they hope the business will break even this year.
Looking ahead, Meet Culture will continue to improve the functions of its vending machines, which currently only accept payment in cash. The machines will soon be able to accept third-party payment methods – namely, Alipay, a popular third-party payment platform in Mainland China, and local platform MPay.
To grow the business the company hopes to install 20 new machines in the market every year while introducing more products.
“Besides the current two series, which is about heritage sites and festivals, we will have two new lines of products that are also about Macau and more relevant to our daily lives,” says Ho.
Ms. Hoi adds that the new product lines will be “more playful” in the hope of later selling on the Mainland and overseas markets, remarking: “Our product portfolio now focuses on mass-appeal goods like keychains as we want the public to first be familiar with our brand – and the Macau culture.”
Toss a coin
Two young local businessmen introduce souvenir token machines in the hope of creating a treasure hunt-like experience for travellers
For seven years, Kelvin U and Lam Lei enjoyed stable incomes and perks working, like many residents, in the hotel industry, one of the biggest employers in the city. But the duo decided to quite their jobs last year to step out of their comfort zone.
“We think the souvenir market could be more diversified in Macau, so we’ve decided we could introduce [self-service] elongated coin machines to the market,” says Mr. U.
His partner, whom he has known since school, also sees business opportunities in this niche market: “This type of souvenir token machine is very popular in the United States as well as in neighbouring regions like Taiwan, Japan and South Korea,” Mr. Lei says. “So we think we can introduce this to improve Macau’s offerings as a tourist city.”
With a “six-digit” investment, the pair founded Redirect Ltd. last year to work on bringing the souvenir token machines, which produce coins that are elongated and embossed with various design patterns, to the city. The project was also granted a subsidy of MOP354,418 and an interest-free loan of some MOP1.05 million from the Cultural Industry Fund, financed by the public coffers in 2014 to support local businesses.
The company first tested the machines at the PATA Travel Mart 2017 held in Macau last September before installing the machines in the city earlier this year. Redirect now has seven machines available in various locations – namely, Macau Tower, famous local ice-cream café Lai Kei, and local pork chop bun chain Tai Lei Loi Kei – with each machine providing unique coin design patterns exclusive to the venues.
“We are responsible for the design and maintenance of the machines, while [the venue] only has to provide us space for the machines,” Mr. U explains. “We also share a proportion of the revenue of the machines with them.”
Given the city’s designation as Creative City of Gastronomy by the United Nations Educational, Scientific and Cultural Organisation (UNESCO) last year Redirect believes its machines can enrich the offerings of local eateries and restaurants, explaining: “Many eateries have outstanding delicacies but they don’t have any souvenirs for travellers to take back home so our souvenir tokens with unique design can be helpful.”
Following the start of operations in late January, about 7,000 people have used the token machines as of early June, with each token charging MOP10.
“Surprisingly, Mainland Chinese travellers are not our biggest source of customer – there are actually more Hong Kong and Taiwanese clients,” Mr. Lei reveals, adding that business performance has so far matched expectations. “The machines are also popular with children, who can be directly engaged in the process of making tokens.”
With seven machines in the city the pair hopes to boost the number to 15 by year-end with the total number of people using the machines reaching as many as 20,000. The ultimate goal is to install 30 machines across the city within three years.
“When we consider possible locations, the traffic flow of visitors is not our main concern but the coverage and representativeness of the venues,” says Mr. U. “We hope to target reputed local eateries and the city’s heritage sites and museums. We recently met with [respective government departments] to see whether there is room for co-operation in the future.”
“Our goal is to create a map for travellers to visit various sites for sightseeing and getting the tokens, enriching the city’s tourism offerings,” he continues. “Some theme parks elsewhere have these machines distributed across their property – we simple replicate this model for the entire city to create a treasure hunt-like experience for travellers.”
For future development the pair is looking at opportunities abroad, given the limited size of the Macau market.
“We have been in discussion for co-operation with a tourist site in Shenzhen, in which we will provide the technology and machines,” says U. “At this moment we just focus on the souvenir token project but we will see in future whether there are opportunities to develop other tourism projects.”
They estimate two and a half to three years for the token operation to break even.
“Despite the government subsidy the revenue from the project is not much [at this moment] and our monthly income is only about one-tenth of our salaries in the past,” Mr. U claims. “It’s not an easy path – but regardless of whether the project is a success or not in the end we can still take pride in the fact that we are the first to introduce token machines to Macau.”
Mr. Lei has no regrets, either, leaving his hotel job for entrepreneurship. “We’ve learned a lot from the process,” he concludes. “The satisfaction we’ve got from starting something from scratch is invaluable.”