Curious about retail pricing practices in Thailand

[AlGoRhythm]

This is related to imported goods, the sorts of things foreigners or more well-off Thais may be buying. A few things I’ve noticed in the past few months -

For one of the more popular boxes of imported wine sold here there seems to be a common price, no matter who is selling it. Also, despite some considerable fluctuations in the exchange rate, the price has held constant for several months now. Why no price differentiation if there is supposed competition?

Another - related to imported spirits - I’ve observed in two cases where there was a price increase of at least 50%, literally overnight, in the few places selling the items. This occurred about a month, or so ago, well after the published increase in customs duties. Why such a massive increase and timing?

Finally, though a little different, I’ve been watching the price changes on a particular breakfast product over the past several months whereby every 2 to 3 weeks there is a change of about 20%, first up by 20%, then back to the original price, then back up, etc, etc, - occurring several times now. What would be the sense of this, especially if the cycle becomes predictable?

Can anyone out there explain any of this ?

Thanks, Al

[ukrules]

Price fixing ?

[pgrahmm]

I have watched the same type price fluctuations in the US also.....I'm sure they have expected margins and roll pricing over the wide spectrum of goods - semi hiding the practice in plain sight.....

What I have noticed here is big items - fridges, etc seem to be the same price everywhere......

[KittenKong]

Cartel pricing is rampant in Thailand. Other cartel practices are also.

[Langsuan Man]

Monkey see, monkey do is the retail mantra in Thailand, whether it be location, displays, or prices

[paddyjenkins]

It's because economy Thailand not same....that's the only response I've received when asking locals about these matters, so I suppose we will just have to settle for that

[meand]

A few Thai families control everything and do as they please. It's as simple as that. If they had to compete with anybody who knows what they are doing, like say walmart, they'd be out of business in no time. You think a Thai business can compete with the rest of the world on efficiency?

[pookiki]

The one thing I have found very bizarre is that buying the same item/brand is often more expensive in a larger quantity than in a smaller quantity. For instance, a small jar of coffee(100g) may be 50 baht, while a 200g jar will be 125 baht. So, it is more sensible to buy two small jars than one large jars. I have also seen packages of juice in two-packs that were 'supposed' to be on special price that were more expensive that buying two single cartons. Just be careful when you shop.

[IMA_FARANG]

A few Thai families control everything and do as they please. It's as simple as that. If they had to compete with anybody who knows what they are doing, like say walmart, they'd be out of business in no time. You think a Thai business can compete with the rest of the world on efficiency?

-----------------------

Your absolutely right.

A few wealthy families control the import of certain high price items hat sell mainly to Farangs.

Just because you buy something at XXXX shop, that shop doesn't import it.

YYYY has the import license for that item in Thailand, and that company controls the prices at all the stores you buy that item.

For those items in Thailand it is the suppliers who have the Thai license to import those items , not the retailers who control the prices those items are sold at.

But is has nothing to do with Thai inefficiency.

It is simply that those items are a low volume sales turnover item, usually mainly bought by Farangs, and crossing the family cartel to undersell them at a lower price just means when it is time to restock those items the cartel simply doesn't have that item available for you.

Unless, as retailer, you pay a premium then (you will then be learning your lesson about who is really n charge of distribution of that item).

[AlGoRhythm]

Thanks Ima and Meand. Makes the most sense to me.

Al

A few Thai families control everything and do as they please. It's as simple as that. If they had to compete with anybody who knows what they are doing, like say walmart, they'd be out of business in no time. You think a Thai business can compete with the rest of the world on efficiency?

-----------------------

Your absolutely right.

A few wealthy families control the import of certain high price items hat sell mainly to Farangs.

Just because you buy something at XXXX shop, that shop doesn't import it.

YYYY has the import license for that item in Thailand, and that company controls the prices at all the stores you buy that item.

For those items in Thailand it is the suppliers who have the Thai license to import those items , not the retailers who control the prices those items are sold at.

But is has nothing to do with Thai inefficiency.

It is simply that those items are a low volume sales turnover item, usually mainly bought by Farangs, and crossing the family cartel to undersell them at a lower price just means when it is time to restock those items the cartel simply doesn't have that item available for you.

Unless, as retailer, you pay a premium then (you will then be learning your lesson about who is really n charge of distribution of that item).

[recycler]

Somebody recently explained me that only 1 company can have a license to import certain items or brands, so there is no competition and the importer controls the prices.

For some imported alcoholic drinks I know that some prices increased after the stocks imported under the old duty system ran out, so the effect of the duty increase was not at the same time for everything.

Almost the entire retail market in Thailand is in the hands of a few companies that fix the prices, that's why they make incredible margins at the moment. My feeling is that this will change in the next 5 to 10 years as the labor productivity in Thailand is extremely low and with the increasing global prices Thailand will become too expensive. At that moment places like Europe and the US will be cheaper again than here. You can see this happening already if you go to Europe and look at prices and how they are more stable.

[masuk]

Look for the specials and different offers.

I was looking at a package of large fridge, washing machine and TV. I ended up getting discounts as I held a member's card for that store, another as I was using BKK Bank and yet another discount as these were 'specials'.

[1FinickyOne]

There are instances where the manufacturer makes demands on the retailers not to cut prices from the ones that they set. I think Apple Computer tends to do this as well as others.

People complain alot here abt prices and yet back in the USA it is not uncommon to buy a shirt for $30 and the next day have it go on sale for $20 and also have it available at a Walmart for $12… is that any crzier than the stuff that goes on here and everywhere?

I think it is just what you are used to…

[unclueng]

I have noticed that many food items that are almost exclusively used by westerners have drastically increased in price. A prime example is butter. Where most dairy products have increased 10 to 20 percent over the years, butter has gone up 300 percent. In 1998 Walls ice cream was 66 baht, it is now 75 baht. Pure butter was 31 baht it is now 90 baht. Thai people don't use much butter. Foreigners who want butter will pay the higher price.

[8OA8]

Many importers set their prices once a year, normally based on the expected/guesstimate fx-rate. If the fx-rate changes they generally won't increase or decrease their local Baht selling price. Take for instance The BMW or Mercedes Benz brands price lists, these will be set for the year and unless the Baht v /$ has a meltdown, these importers won't adjust the local Thai Baht pricing on their products. Much in the same way the factory back in Germany won't be able to hike their prices because the component that they sourced from a non Eu currency country (perhaps UK£) has increased or decreased due to a change in that fx rate.

Swings and roundabouts, sometimes they are booking an fx gain at the end of the year and sometimes they are booking an fx loss.

Same pretty much goes for the Thai factory that supplies the export market, the customer in the far off land won't accept the increases based on a day to day or month to month fx rate fluctuation.

Depends on the trigger that is agreed upon that allows set prices to change.

[yankee99]

Its really hard to understand some of the pricing practices here. Early thiy year i bought some regulators for 185 baht. I went to reorder and they said the price has increased to 230 baht because of a spike in the price of zinc. So not knowing much i look at the price of zinc and its gone up about 10%. I'm not sure how much zinc is in these regulators but it cant be much maybe 10%. They wanted a increase of 30% of the completete product instead of just a increase on the zinc used in it. After just one email telling them i was going to order from china they lowered the price to 195baht only a 10 Baht increase instead of the original 45baht.

[JohnnyJazz]

There are two sides to every coin. By controlling the retail price wholesalers / importers keep the small retailers in business. In other countries big retailers offer big discounts to customers to lure them in, at prices that are sometime cheaper that the retailer buying prices. The small mom & pop shops can't compete and close down. With a fix retail price small retailers are protected against these kinds of practices.

[NoshowJones]

The one thing I have found very bizarre is that buying the same item/brand is often more expensive in a larger quantity than in a smaller quantity. For instance, a small jar of coffee(100g) may be 50 baht, while a 200g jar will be 125 baht. So, it is more sensible to buy two small jars than one large jars. I have also seen packages of juice in two-packs that were 'supposed' to be on special price that were more expensive that buying two single cartons. Just be careful when you shop.

That's one of the reasons Thailand has a very poor average IQ compared to Western country.

[NoshowJones]

I have noticed that many food items that are almost exclusively used by westerners have drastically increased in price. A prime example is butter. Where most dairy products have increased 10 to 20 percent over the years, butter has gone up 300 percent. In 1998 Walls ice cream was 66 baht, it is now 75 baht. Pure butter was 31 baht it is now 90 baht. Thai people don't use much butter. Foreigners who want butter will pay the higher price.

Another reason why capitalism is so bad.

[meand]

The one thing I have found very bizarre is that buying the same item/brand is often more expensive in a larger quantity than in a smaller quantity. For instance, a small jar of coffee(100g) may be 50 baht, while a 200g jar will be 125 baht. So, it is more sensible to buy two small jars than one large jars. I have also seen packages of juice in two-packs that were 'supposed' to be on special price that were more expensive that buying two single cartons. Just be careful when you shop.

I honestly feel it makes sense to them. Like buying a bigger car you are now more in the high end and must pay. It is so whack but I really think it does make sense to them. I have no idea actually just guessing lol.

[impulse]

People complain alot here abt prices and yet back in the USA it is not uncommon to buy a shirt for $30 and the next day have it go on sale for $20 and also have it available at a Walmart for $12… is that any crzier than the stuff that goes on here and everywhere?

But in the USA, if I buy a shirt one day for $30 and it goes on sale the next week for $20 (even at another store), most stores will refund the difference if I bother to ask them. Why? because I can generally return the item for the higher amount and take my money and buy it at the lower price- and that costs them more than just handing me the difference

And if I bring a Home Depot ad to a Lowes store for the identical item, they'll generally match the price.

That's what competition does...

[meand]

People complain alot here abt prices and yet back in the USA it is not uncommon to buy a shirt for $30 and the next day have it go on sale for $20 and also have it available at a Walmart for $12 is that any crzier than the stuff that goes on here and everywhere?

But in the USA, if I buy a shirt one day for $30 and it goes on sale the next week for $20 (even at another store), most stores will refund the difference if I bother to ask them. Why? because I can generally return the item for the higher amount and take my money and buy it at the lower price- and that costs them more than just handing me the difference

And if I bring a Home Depot ad to a Lowes store for the identical item, they'll generally match the price.

That's what competition does...

Yeah, there are no drawbacks to the pricing and policies I'm the us.

It's sad there is no competition here. That's just the way it's been set up though, for obvious reasons.

[cocopops]

The one thing I have found very bizarre is that buying the same item/brand is often more expensive in a larger quantity than in a smaller quantity. For instance, a small jar of coffee(100g) may be 50 baht, while a 200g jar will be 125 baht. So, it is more sensible to buy two small jars than one large jars. I have also seen packages of juice in two-packs that were 'supposed' to be on special price that were more expensive that buying two single cartons. Just be careful when you shop.

That's one of the reasons Thailand has a very poor average IQ compared to Western country.

Your theory is that the price tag on 200g jars of coffee has lowered the average IQ in Thailand?

Yeah. Makes perfect sense....

[Johpa]

Cartel pricing is rampant in Thailand.

Cartel pricing, monopoly pricing, oligopoly pricing, it is all rampant everywhere where capitalism reigns supreme. Or, to quote the ADM motto: "The competitor is our friend and the customer is our enemy. The only thing that distinguishes Thailand cartels from say American cartels is the willingness to use force rather than the built in advantages of the legal and political systems.

But in the USA, if I buy a shirt one day for $30 and it goes on sale the next week for $20 (even at another store), most stores will refund the difference if I bother to ask them. Why? because I can generally return the item for the higher amount and take my money and buy it at the lower price- and that costs them more than just handing me the difference

And if I bring a Home Depot ad to a Lowes store for the identical item, they'll generally match the price.

That's what competition does...

Between Home Depot and Lowes they control over 70% of the home improvement market in the US. That is not competition.

And of course these companies and refund price differences and match sales prices as their gross profit margins are astronomical, well in excess of 60% on most items. That shirt you originally bought for $30 only cost $10 landed to the shelf.

[NoshowJones]

The one thing I have found very bizarre is that buying the same item/brand is often more expensive in a larger quantity than in a smaller quantity. For instance, a small jar of coffee(100g) may be 50 baht, while a 200g jar will be 125 baht. So, it is more sensible to buy two small jars than one large jars. I have also seen packages of juice in two-packs that were 'supposed' to be on special price that were more expensive that buying two single cartons. Just be careful when you shop.

That's one of the reasons Thailand has a very poor average IQ compared to Western country.

Your theory is that the price tag on 200g jars of coffee has lowered the average IQ in Thailand?

Yeah. Makes perfect sense....

Just an example.

[AyG]

Generally, the price of common spirits, is virtually exactly the same everywhere (apart from convenience stores). For example, a litre of Hundred Pipers is 549 Baht in Big C, Lotus, Villa, Gourmet Market. There's one anomaly that I can't explain: a bottle of Gilbey's gin or vodka is 20-30 Baht more expensive in TOPS than anywhere else. It's been like that for years. It's been that way for years. Anybody any idea why?

[54321]

I used to work in fmcg in the UK

I have noticed Mont Claire box wine occasionally vary in price between Big C and Tesco (but yes it is often the same), and have seen it cheaper in independent stores. Sometimes if items are priced the same in different supermarkets its a sign of effective competition as they are both at their lowest possible price point, sometimes its linked to volume payments by the supplier, and sometimes it is collusion

Often "mistakes" are made and suppliers sell smaller pack products at a lower per ml rate. Often it is to do with supply and demand eg shampoo- they make many more of the 70cl 20 baht shampoo so it is often cheaper per ml than the 500ml version. This price variation happens throughout the world. Mistakes are made, economies of scale often mean larger packs cost more, and sometimes it can be pure profiteering.

have not noticed any 50% overnight price increases thankfully

re: 20% up and 20% down pricing. I agree if it is so predictable it is pointless, but sometimes it can be due to the producer altering their selling price due to the need to clear stock. Often this is to enable them to advertise a discount (happens throughout the world). I noticed birds nest beverage in tesco used to be about 520 baht, they then would increase it to 540, but sell 2 for 1020 baht, so it was/is purely a pricing/promotional mechanism that happens everywhere. (prices not 100% correct but indicative of the pricing/promo strategy)

[meand]

On the other hand it is a blessing to be too cheap to pay double for vodkas and kailuas etc

[ableguy]

Villa Mart does not seem to fit in with many of your theories as lots of their farang based products are 25 per cent higher than say Tesco and way up on Macro, buying cheese there is akin to buying gold. And no I do not shop there just observed.

[meand]

I saw a box of pop tarts at villa market for like 9 bucks and I just laughed.