The geographical heart of Southeast Asia, the Kingdom of Thailand is more than a pulsating, vibrant tourist destination – it is one of the biggest economies in the region. Heavily export-oriented, Thailand, or the Land of Smiles as it is popularly known, is recognized for the openness of its economy, and willingness to accept foreign direct investment. The recent agitation by Red Shirt was also successfully thwarted.
Thailand today is the world’s largest rice exporter, the second-largest tungsten producer and third-largest tin producer. Having made significant progress in social and economic development in recent years. The current growth rate is around 8% p.a. Unlike its other neighbours in Southeast Asia such as Laos, Vietnam, or Burma, Thailand was never colonized – and the country’s developing, free-enterprise economy is slowly shifting from agriculture to manufacturing.
Thailand, known as Siam until 1939, has been inhabited for around 5,000 years with the earliest civilization believed to be that of the Mons in central Siam, although the first Siam state is the Theravada Buddhist kingdom of Sukohthai.
The land of Theravada Buddhism has had a long tradition of being one of Asia’s most culturally vibrant countries. With miles of extended coastline, Thailand has some of the world’s best beaches, ancient architecture, friendly people and unique cuisine.
The Thai traditional greeting, the wai, involves pressing the fingers and palms together at chest level while slightly bowing the head. The wai is always returned, and performs the twin functions of greeting and showing respect.
My previous posting was mainly focussed on our site visits to various interesting places of tourists destination. Please do visit.. http://mastpradeep.blogspot.com/2010/09/thailand-trip.html.
This trip was meant to be a business trip. Therefore, we were more interested to know about the retail business in Thailand and Bangkok in particular. A team of 20 Real Estate Managers of Reliance visited Bangkok from 3rd March, 2011 to 6th March, 2011. The extensive tour of retail market was undertaken and atleast 20 big properties consisting of super market, departmental stores, speciality stores and hyper mart were studied and tried to find out the reasons for success of retail business in Bangkok. A few questions were framed in mind and tried to find out the answers.
Why Hyper as a format has been successful in Thailand:
i) Meet local aspiration
ii) Both spouse are working : Easy to shop at one go.
iii) Strategically located
iv) USP : Fresh is actually fresh both Vegetarian and non-Vegetarian
v) Ready to cook and ready to serve
vi) Price points : competitive and affordable
vii) Quality assurance
viii) Quick Service
ix) Food court and impulse buy on GF : Major driver
x) Robust logistics
What are the basic principles which retailers have followed while selecting the location?
1. Catchment
i) Normally targeted densely populated areas
ii) Middle and high income group
iii) Lot of disposable income
2. Competition
i) Best location to beat the competition
ii) If Competition came : up gradation of existing set up : Rama 4, Carrefour store
iii) Merger with Strong departmental store : Big C + Future Store (Ringshit)
iv) Positioning : Lotus Tesco : Value proposition, Carrefour : Upper middle class
3. Road width
i) Normally located on wide road more i.e. more than 100 feet
ii) Little compromise - Easy access, maneuverability
4. Infrastructure
i) Water and power availability
ii) Robust government sensitivity
iii) Flyovers, twist and turns, service roads and access : Bad planning leads to accident
iv) Strong visibility of access road
5. Transport facility
i) Efficient public transport system
6. Parking :
i) Surface parking : important
ii) Front parking : convenient
iii) 70% of covered space on ground floor for stilt
7. Town Growth pattern
i) Location can be planned where town is likely to grow in next 5/6 years
8. Merchandise offering :
i) Meeting taste of local residents
ii) Some are positioned catering to needs to expats :
9. Internal ambience : lighting, washrooms, ile, open spaces
i) Carrefour : Long heights, Fabre Sheets, Tubelights : giving better ambience
ii) Tesco : Yellow lights : Giving night feeling
iii) Lot of open space and wide isle : easy movement
iv) Washrooms are decently maintained
10. Model: Concessionaire
i) Sub leasing and Concessionaries model is very popular
ii) Percentage varying from 30 to 50%
iii) Good balancing between revenue and rentals
11. Size of store
i) Normally two levels each floor of around 1 lac sqft
ii) GF partly used for parking 70%., 30% for food and impulse buying
iii) FSI is not an issue
12. Cost of Occupancy
i) Abundant land is available
ii) Rentals are not very high per sqft of FSI
How Thailand principles are valid for India?
Not applicable to the extent:
i) Social fabric different
ii) Price sensitivity
iii) Services : Home delivery, returns, credit,
iv) Infrastructure : Semi developed in India
v) Disposable Income less
vi) Public Transport not very good
vii) Land prices are extremely high
But : Valid reasons and expectations:
i) GDP growing at 9% with the result disposable income will rise
ii) Lot of emphasis on infrastructure development
iii) Lot of emphasis on female education therefore increasing women working group in urban areas
iv) Quality and quick delivery expectations
v) Access to global merchandise and market
vi) Big size malls : Better to be located on outskirt : wide roads, easy access, low on rentals
Learning as Team Building:
i) Everybody travelled in the same class
ii) Everybody stayed in same Hotel
iii) Everybody travelled in group during city tour
iv) Breakfast invitation personally by boss in his room to each and everybody
v) Asking everybody to use phone of boss to contact family on everyday basis
vi) Taking care of everybody including their luggage by boss
vii) Taking gifts for their juniors back in India
viii) Taking lunch and dinner together and taking care of everybody’s taste
Learning on Cost Saving:
i) Travel in group, low cost carrier, no alcohol,
ii) Use of Sundays and working days properly.
