Long queues! Long waiting times. Hundreds of people willing to stand in line and maybe even pay a premium for it.

Signs of good business, innovative product, excellent taste and quality that attracts the crowd to put them in line. One branch opened after another with the same phenomenon, long queues.

Every time I walk by, I really wanted to try it out but was deterred by the crazy queue.

Same as this other stall.

Extremely good business! Non-stop queue (or at least during peak hours). Complete different product offering, or “much tastier” offering than what was offered by the surrounding peers next door.

And after a year or so, this is what it looks like:

And, it had closed down recently.

So.. What happened?


Hype is always an easy way to dump the blame on. Why not let us look at it from a bigger picture.

There is always a factor of Absorption and Consumer Switching Cost (Barrier of entry, whatever you want to call it).

Attracting consumers to the stall does not equate to a strong business.

Sometimes, it is just about market Absorption. When there is just too much supply (crowd) you probably will get a queue, especially if you offered a different product. And so, it is relatively simple to keep opening new stalls, just open them in areas where there is a lot of “Excess” traffic. Which is also the reason why rental fees in hot areas are so high.

However, if a business could only depend on “market absorption” to sustain its business, then there will be a problem. As market absorption is sometimes out of your control, a new mall may open beside, new shop spaces carved out as the mall expands.

Competitor will come in when they see your queue! (oh! there is huge market demand that I can come and soak up some too!) Adam Smith anyone?

Coupled with the low switching cost of the consumer, it is extremely easy for them to just jump to the next stall to avoid your queue.

Conversely, when we look at current businesses being “disrupted” as some consumers are being drawn to the new offerings, do the consumers come back after a while? What draws the consumer back? Why do they not stay with the new offering?

Or does the new offerings offered nothing more than just a new/ different product?

So when can we be sure that a queue is a “good queue” and it really suggests that this business is really just different or special?

This is a picture I’ve taken about 6 years ago and I’ve always been fond of this phenomenon and referenced it for case studies. (Good camera phones weren’t a thing back then thus the poor picture resolution)

There are two stalls in this hawker centre both selling the exact same thing, Mixed Rice.

One with an extremely long queue and the other with NONE at all.

Take note that consumers can EASILY switch to the stall on the right and avoid queuing for 10 – 15 minutes and wasting their previous lunch time.

And you know what? The stall with the long queue was once the one on the right. The left most stall was actually selling Duck Rice and one day, they switched and started selling Mixed Rice instead. The right stall never ever came back to its “glory” days of long queues.

This is a case of a truly better product, better service, better system and not a case of just playing with market absorption. They literally absorbed the entire mix rice market over. And the price was the same, food was arguably the same.

Interesting? Certainly more interesting to me than new bubble tea shops opening up and suddenly had crazy queues day and night for it I’d say.


Thank you for reading.

~ right things at the right time are more treasured than valuable things at any time.
