Thailand is a country located in the southeastern part of Asia. It is known for its beaches, historical monuments and huge numbers of metaphorical temples of Buddha. Its economy largely depends on tourism and exports business. It is new to the industrial sector having an exports ratio of around two-thirds of its gross domestic production. But, the Thai economy is currently hitting minimal growth that is expected for the year. The World Bank anticipates a growth of 2.9% in 2016 for the country.
According to Board of Investment of Thailand, the Foreign Business Act of 1999 regulates the supervision of foreign investment in the country. Any foreign investor interested in investing either in the retail or wholesale sector in the country is needed to acquire a Foreign Business License from the Director General of the Commercial Registration Department of the Ministry of Commerce and also get an approval from the Foreign Business Committee. There are certain exceptions to the above-mentioned license requirement in the case of foreign investment in the retail sector that have investment plans of more than 100million Baht and 20million Baht in the case of retail stores.
Shift Towards Modern Retail Market Trends:
The retail market of Thailand has fascinated a wide array of both domestic and foreign retailers all striving to achieve their share of the consumer market. This has resulted in the creation of a highly viable environment. The economic growth of the country in the past years has brought about the quantitative extension of the retail sector. It has also made an elemental shift in customer liking, taste, and actions.
Eventually, the old traditional stores are getting gradually but insistently erased out and taken up by new retail marts and shopping malls. This result is being compounded with a swarm of small convenience stores growing across the country. In 2015, a large number of retail brands continued to affirm to be from amongst the major players within the market. Companies like CP All; 7-Eleven; Tesco Lotus supermarkets and hypermarkets; Central Retail; Big C and Home Pro were all seen vibrant and active in the retail sector.
This move in the trend of malls and hypermarkets in Thailand is greatly influenced by similar developments across the country as multinational retailers keep on entering the market. But, it has been seen that the sales growth has been left behind that of the traditional convenience stores and supermarkets. However, the structure of the hypermarkets in Thailand is somewhat peculiar in an aspect as their products and market environment usually search for imitation of the old traditional markets. This is a strong point in the retail sector.
These casual domestic markets usually have a number of open stalls and vendors selling a variety of foods and eatables including meat; fish; fruits and vegetables and this stands as a tough competition for the newbie hypermarkets. But the marketing strategy of the hypermarkets also tends to beat the local sellers by offering all that is absent or not available in the traditional markets. The hypermarkets sell a wider range of new varieties and fresher qualities of food along with providing modern lifestyle goods and products.
Along with improving the stock of retail space expected to come up in the approaching years, retailers are also getting on a number of renovation tasks so as to attract new companies and consumers. Few of the renovation projects are Siam Discovery, MBK Centre, and CentralPlaza subsidiaries.
According to Pascal Billard, the CEO of Central Food Retail Group, the retail sector has been flexible in the last few years in spite of slow economic growth. And the wholesale segment is said to keep growing, with the convenience stores and supermarkets tending towards higher annual growth.
The retailing industry is expected to turn out to be more interesting and overpowering in the years to come. It is estimated that the number of new retail outlets multiply exponentially. Also, new contemporary outlets will be launched to meet the needs of the consumers. Though online retailing or e-commerce business is at its budding stage in Thailand currently, yet is it expected to rise greatly with the spread of Internet and social media at such a faster pace in the coming years. The launch of future generations of the internet and its impact will surely drive the expansion of e-commerce market. This will be the key trend that will attract new investors and consumers in the retail industry in the next few years.
Digitization will have much greater penetration and direct impact on the sales output. The impact will be clearly visible in sales trends. The established retail pioneers in Thailand will need to think out of the box and focus more on domestic demand as well as international markets trends. Social media like Facebook, Twitter, Instagram etc, will be integrated to marketing industry in depth as the digitalization boosts the connectivity in the country.
Consumers will get the option to shop online via their smartphones and computers with ease. The introduction of mobile apps by companies will find a place in the market. Retailers will have to add on various payment options like money transfer, credit cards, PayPal and related apps for the convenience of the consumers. The fixed stores and outlets will make a shift towards multi-chain approach. Online shopping will become much more significant. Domestic retailing will target international tourist along with the local buyers and consumers. These strategies will add greater value to the sales figure.