Thai retail giants preparing for AEC

[webfact]

Retail giants preparing for AEC
Kwanchai Rungfapaisarn
The Nation


A supermarket in Nakhon Ratchasima

BANGKOK: -- Major retailers including Central Group and The Mall are expanding into several high-potential locations, particularly in the border provinces and tourism cities, to cash in on next year's implementation of the Asean Economic Community, which will attract more customers.

The AEC will likely increase regional economic prosperity and stability as well as bring new business opportunities, they believe.

Suthichart Chirathivat, vice chairman of the board of the Central Group of Companies, said he did not expect any significant change in the domestic retail market due to the AEC, which will be fully effective next year.

"The local retail sector has reached maturity as the big local players have fully penetrated the market and gained a high competitive advantage over foreign retailers. However, the implementation of the AEC will allow major local retailers to penetrate new markets in other AEC countries," he said.

Suthichart said this was the right time for Central Group to expand its retail business abroad, especially in countries such as Vietnam and Indonesia, as well as Europe.

"We may phase out our retail business in China as we are facing tough competition from local operators, and focus on other markets instead, such as those in the AEC and Europe."

Tatiya Sorsothikul, managing director of Seacon Square, said the full implementation of the AEC would drive a rapid increase in the number of foreign tourists coming to Thailand.

Low-cost airlines are quite popular at this moment and this has driven strong growth in the number of tourists travelling around Asean. Travel costs are coming down quite significantly.

"Seacon Square will be cautious when launching any new retail project. We will not focus on gaining market share, but profit. That is quite different from major retail players that need to expand their projects continuously to maintain market share," Tatiya said.

He said that during this time of political and economic uncertainty, it would be quite difficult to make new shopping malls perform well, as construction costs were getting higher. It takes longer for return on investment, about 10 years compared with seven or eight years previously. Many big players have seen the need to list on the stock market to issue property funds.

Supaluck Umpujh, vice chairwoman of The Mall Group Co, said that in 2015, Thailand's participation in the AEC would herald a major change in the country's position as a leading regional shopping hub and top tourist destination. There are 10 Asean member countries, totalling 600 million in population.

The improved infrastructure, transport facilities and airports in key Thai cities are expected to increase inbound tourism from 25 million to 40 million people within the next five years. The destination cities include Bangkok, Phuket, Pattaya, Hua Hin and Chiang Mai among others.

Dr Chatchai Tuangrattanapan, director of the Thai Retailers' Association, said it would take up to five years after next year's AEC implementation for the real effect to be seen.

"Based on my trips to several countries in Asean such as Malaysia and Singapore, I believe that less than 50 per cent of their people are concerned about the coming of the AEC," he said.

Chatchai said the AEC would allow a free flow of trade as import duties for particular goods would be cut. However, there are many negotiations, such as those concerning the service sector and human resources that have yet to be finalised.

He said he did not think any drastic change would hit the local retail industry when the AEC kicks off next year.


-- The Nation 2014-05-26

[Thai at Heart]

An advantage over foreign retailers.

No s**t Sherlock. Wasn't retailing a restricted business for foreigners ?

[bangon04]

An advantage over foreign retailers.

No s**t Sherlock. Wasn't retailing a restricted business for foreigners ?

""The local retail sector has reached maturity as the big local players have fully penetrated the market and gained a high competitive advantage over foreign retailers. However, the implementation of the AEC will allow major local retailers to penetrate new markets in other AEC countries," he said."

Seems fairly clear that the AEC is viewed as a one way opportunity - all in favour of Thai protectionism at home, and all in favour of Thai exploiting opportunities in other countries.

It must be comforting to be so assured of success.......

[NongKhaiKid]

The AEC will be like the EU just one big happy family and all in total accord

[Thai at Heart]

The AEC will be like the EU just one big happy family and all in total accord

Yup. I am just watching the results coming in now. It all looks very hunky dory. The leading parties euro wide are largely sceptic. Farage is kicking ass all over the UK.

[kalbo123]

Good the retailers them selfs

Verzonden vanaf mijn iPhone met behulp van Thaivisa Connect Thailand

[bangkokheat]

i realy feel sorry for all those lazy ass thais that dont want to work, thats ok you can rest now, when aec starts there may well bring some reality back into business and real workers

[Joe Mamma]

I really enjoy meeting and talking to Asians from neighboring countries. It is interesting to see their view of Asia and their homelands too. I have learned much and it makes me want to travel to more of these places. Can't wait for AEC to start.

[Luk Mhee]

Well they better do something to improve the shop assistants English. There is nothing worse than asking for help, and one gets this blank look, or having to wait for over 10 minutes while they call someone that can speak a bit of broken English. The worst is when asking for a product and they say “No have” or “solly sold out.” And a couple of shelves down the lane the product is available.

[alant]

I wonder if it will result in a casino like situation where Thais can currently cross the boarder to gamble in a casino. soon it will be to shop in a supermarket with lower prices due to lower wages and lower currency value. Bigger boats needed on the Mekong

[BillyBobThai]

Thailand, the hub of the hubbiest.

[JoeThePoster]

Okay, how many languages will the staff be trained to say "no have"?

[Tomtomtom69]

I wonder if it will result in a casino like situation where Thais can currently cross the boarder to gamble in a casino. soon it will be to shop in a supermarket with lower prices due to lower wages and lower currency value. Bigger boats needed on the Mekong

What's stopping you or any of us from crossing a border (not boarder, no idea where that spelling came from) to gamble? All you need is a passport. As for boats on the Mekong, there are these things called bridges now, 4 which currently span the Mekong between Thailand and Laos. Exceptions are the golden triangle crossing (although you could also drive via Huay Xai up to that casino) or the second, older golden triangle crossing to the casino in Myanmar or Beung Kan to Paksan (bridge currently under construction).

[superal]

Feast & Famine

The AEC will be a feast for businesses and a famine for the lesser skilled and blue collar workers of Thailand when the employers take on labour from other Asian countries at probably half the wage . The average working class Thai worker has little or no idea of the mechanics of the AEC as they are so ill informed of much of the Thai government policies . I have spoken to many Thais and the majority are either unaware of what the AEC is , or have heard of it but are unsure of the implications . .They also do not enjoy the rights and protection of employment rules that are common place in the western world . When this event kicks off next year I forecast that in a very short time there will be big problems for the Thai workers who will be undercut and also for the lower paid immigrants who will face the wrath of the unemployed Thais . This is the European Community all over again where responsible European workers with mortgages and families have lost their jobs to mainly low paid eastern block European workers . However , as alluded to by THAI AT HEART the Euro sceptics have had enough as shown in the recent polls , much to the annoyance of business puppets Cameron , Clegg and Miliband , what a shower .

Interesting times ahead . .

[belg]

they can invent a shopping visa, in town for max 3 days and you need have bought for atleast 100.000 baht

[selftaopath]

An advantage over foreign retailers.

No s**t Sherlock. Wasn't retailing a restricted business for foreigners ?

Ya wanna see heads spin, merchandise available increase, prices lowered .... bring/allow Wal-Mart into this highly monopolized country.

[Thai at Heart]

An advantage over foreign retailers.

No s**t Sherlock. Wasn't retailing a restricted business for foreigners ?

Ya wanna see heads spin, merchandise available increase, prices lowered .... bring/allow Wal-Mart into this highly monopolized country.

Well exactly. These.so called businessmen have built their empires by hiding behind govt created protections.

They don't know how to.survive in a competitive environment.

[Don Aleman]

Probably a waste as, until the government repairs/replaces/adds to the current infrastructure, proper/safe roads/highways/sidewalks,adds public facilities, beefs up law enforcement , it is not true that" if you build it they will come " Ya hafta make it easy and safe to get there first. Who shops in a ghetto ?

[davehowden]

"We may phase out our retail business in China as we are facing tough competition from local operators, and focus on other markets instead, such as those in the AEC and Europe."

I am not so sure that Europe is waiting eagerly for the "Thai Experience" of 'Wa you wan, solly no haf"!

[ableguy]

I really enjoy meeting and talking to Asians from neighboring countries. It is interesting to see their view of Asia and their homelands too. I have learned much and it makes me want to travel to more of these places. Can't wait for AEC to start.

What's wrong with now ?

[ableguy]

they can invent a shopping visa, in town for max 3 days and you need have bought for atleast 100.000 baht

What are you talking about ?????