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Tag: Thailand retail

  • Thailand retail growth predicted at 6%

    Thailand retail growth predicted at 6%

    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.

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  • Thailand retail growth trails other destinations

    Thailand retail growth trails other destinations

    While Thailand retail industry growth is up slightly and there have been more international tourists, more Thais are shopping abroad, and tourists are spending more in other regional destinations.

    Thailand’s first-quarter growth in the retail industry was 2.6 per cent – failing to hit the Thai Retailers Association (TRA) projection of 3 per cent.

    President Jariya Chirathivat says same-store sales growth for several retail formats declined year-on-year, particularly hypermarkets and convenience stores.

    “This is the first time in two decades that Thailand’s retail industry has [shown] declining rates for several years,” says Jariya. Growth has fallen from 12 per cent in 2012 to 2.8 per cent last year.

    She says retail consumption has weakened because of declining farm product prices hitting the purchasing power of middle- and low-income consumers.

    While there were 12 per cent more foreign tourists in Thailand last year (29.5 million), there was no effect on the sales of semi-durable goods such as clothes, make-up, leather products, shoes and watches.

    Tourists in Singapore and Hong Kong on average spent 1900 baht (US$54) and 5300 baht ($150)respectively per head per day, while the figure for Thailand was 1155 baht ($33).

    Tourism Authority of Thailand figures show that the number of Thais shopping abroad grows by 9 per cent a year. Thais spent 170 billion baht on shopping overseas last year, with brand-name products accounting for 50.8 billion baht.

    “We’re concerned the retail industry might not be able to maintain investment levels in the long run if consumer spending continues to decline,” says Jariya.