Big retailers revamp strategies

Darmp Sukontasap, senior vice president of Tesco Lotus, said 2009 would undoubtedly be a difficult year for the economy and the retail sector. Most important of all, it will be a difficult year for Thai consumers as a whole.

"Therefore, our business strategy for 2009 will focus on helping our customers to ensure that their hard-earned money can go further, while at the same time ensuring that they and their families can continue to buy a variety of quality products at a fair price. In this way, we will also be helping the economy. Consumers will be able to maintain their purchasing power, as the prices of goods will remain low," said Darmp.

He said the low cost of living would help create demand, which would enable production to continue. As a result, the jobs of people in manufacturing and the retail sector will be secured. Moreover, there will be no shortage of goods in the market.

This will be a win-win strategy for Tesco Lotus's suppliers, the workforce in the retail sector and the firm's customers, he said, adding that the government and the economy will of course benefit from continued private consumption and tax contributions from the sector.

"Khun Abhisit [Vejjajiva, prime minister] has given an assurance on several occasions that he is 'business-friendly'. Therefore, we are optimistic about the new administration. What we would like to see as a priority, though, is political stability and a genuine effort to revive the economy through the promotion of domestic investment and public and private consumption.

"With a decline in exports and investments from abroad, domestic investment and public and private consumption will be the main engines driving economic growth. We at Tesco Lotus remain committed to doing our part by making considerable investments in our customers and staff next year and the years ahead," said Darmp, putting forward his suggestions for the new administration.

The Thai Retailers' Association has recently revised its growth target for overall retail sales in 2008, which is expected to be lower than the 4 per cent projected at the beginning of the year, said its president Thanapon Tangkananan.

Kattiya Kraikan, chairman of the Federation of Thai Industries' electronics and electrical industry club, said the country would face a slowdown in the export of electrical and electronic products.

Overseas sales of these goods are expected to increase by only 6 per cent to about Bt1.6 trillion last year, down from the 11-per-cent growth posted in 2007.

"Since November 2008, many manufacturing firms in the electronics industry started to cut overtime and outsourcing contracts with supporting vendors to cope with the plunge in export orders," said Kattiya.

Kobchai Chirathivat, president and CEO of Central Pattana, the major shopping-mall developer, said that despite the economic difficulties, the company was committed to the further expansion of its malls as planned.

"We will focus on opening three shopping malls during 2009 - in Pattaya in January, Chon Buri in April and Khon Kaen in December," he said.

"To cope with the difficulties, we have shortened our working process by empowering authority to managers at all working levels as part of our internal business-process improvement programme."

He added that the improvement process, including a boost in staff efficiency, would allow the company to respond more rapidly to the needs of its clients.

Pimpaka Wanglee, CEO of Rangsit Plaza, said the shopping mall was less concerned this year about the big drop in foreign travellers than the lower spending power of Thai consumers. Foreign tourists make up only 5 per cent of the visitors to Future Park.

"From our own survey, we found that the average spending [per visit] of our shoppers dropped significantly, by 25 per cent from 2007 to about Bt1,500 last year," she said.

Pimpaka said the global economic crisis had hurt the export sector due to a huge decline in overseas demand and orders, while foreign exchange and commodity prices are fluctuating wildly from speculation, and not from the real sector.

"But my biggest worry is local political instability, which makes many foreign investors panic and not invest in or even buy products from Thailand," she said.

"We will focus on promoting strong brand loyalty among existing customers," she said. The strategy is based on the company's recent survey showing that about 80 per cent of all visitors to Future Park are repeat customers.

"We want to communicate with those existing shoppers to come to our complex more often, as their third home," she added.

"We also want to make Future Park more dynamic with various promotions and marketing activities to be launched every week."

In 2009, Future Park will issue its own privilege card to attract steady customers - family members and university students - in its crucial loyalty programme.

Singer Thailand sales and marketing director Boonyong Tansakul said the picture was quite different between general retailers and companies providing instalment services.

"For Singer, we have seen a big growth opportunity during times of economic downturn, as many consumers have turned from cash to the instalment system in purchasing goods that have high value," he said.

"We will turn crisis into opportunity by focusing on creating new careers for people laid off from their companies, particularly those in the industrial sector."

He said Singer Thailand would open the Singer Academy this year to recruit and train new sales people for the company's electrical appliances