Thailand’s retail market is expected to grow at a compound annual growth rate (CAGR) of more than 6 per cent from now until 2020.
This was revealed in the latest market study by global technology research and advisory company Technavio.
Its research report, Thailand Retail Market 2016-2020, offers an analysis of the market in terms of revenue and emerging trends, as well as forecasts for six major product segments – grocery, apparel and footwear, beauty and personal care, personal accessories, home and garden, and consumer electronics.
Grocery
Valued at US$103 billion last year, the grocery market in Thailand is forecast to reach $145 billion by 2020, growing at a CAGR of 6.92 per cent. The segment is largely driven by the modern retail sector, while increasing urbanisation and changing consumer lifestyles are playing a significant role in the market’s development.
Supermarkets and convenience stores have shown the fastest year-on-year growth rates with 9.5 and 10.5 per cent respectively last year.
“Even though hypermarkets offer attractive prices, consumers are increasingly preferring supermarkets for the convenience factor and the availability of a wide product range,” says Technavio lead retail goods expert Poonam Saini. “Unlike supermarkets, which are in urban zones, hypermarkets are generally in bordering areas, catering almost exclusively to nearby consumers.”
Apparel and footwear
The second-largest market segment last year, apparel and footwear is expected to reach $9.19 billion by 2020, growing at a CAGR of more than 3 per cent.
Several foreign companies are competing with local companies in the segment, says the report. International brands have fair penetration rates, offering stylish designs and a wide product range through modern retail stores. Local brands have also been successful with their long-established presence along with customer loyalty and trust.
“The popularity of the online channel is growing, and players are actively using social media sites such as Facebook and Instagram for promotional campaigns and marketing activities,” says Poonam.
“Websites such as Zalora.com are becoming popular for apparel and footwear products, as these sites offer promotions and discounts.”
Beauty and personal care
One of the fastest-growing segments, beauty and personal care (BPC) is having more than 3 per cent CAGR and is expected to reach $5.53 billion by 2020. A continuous exposure to western beauty and grooming trends has helped maintain the growth of the market over the past few years.
International BPC companies have a nearly 50 per cent share of the market, with comprehensive product portfolios and innovative products. Thai retailers are expanding and attracting new consumers, says the report, citing cosmetics brand Sephora, which opened two new stores in 2014 after entering the market late the previous year.
Top vendors
Technavio’s research analysts name five top vendors for Thailand in the report.
Topping the list are supermarket Big C and retail conglomerate Central Group. Then follow CP All, which has a chain of 7-Eleven stores, and homewares stores Global House and Home.
Other prominent vendors in the market are Adidas, Aeon, Isetan Mitsukoshi Holdings, Lazada, Nike, Sephora, Seven & I Holdings, Tesco, The Mall Group and WearYouWant.
Technavio develops more than 2000 reports every year, covering more than 500 technologies across 80 countries. It has about 300 analysts globally.
