Retail growth expected on economic stimulus
Thailand's retail market is expected to grow by 10-12 per cent this year, driven by the government's economic stimulus policies and the dramatic expansion of modern traders - especially convenience stores - into the provinces, according to the Thai Retailers Association.TRA president Busaba Chirathivat said the government's policies, including last year's Bt400-billion rice-pledging scheme, the increase in the daily minimum wage to Bt300, the Bt120-billion first-car tax-rebate policy, and infrastructure projects would generate total cash flow of more than Bt3.5 trillion into the market system, and that would encourage domestic consumption.
The retail association, however, has urged the government to waive the tariff for imported goods as well as promote a value-added-tax refund at the point of purchase to encourage foreign travellers to do more shopping in Thailand.
"Thailand welcomed more than 22 million inbound tourists last year thanks to the government's policy to encourage the tourism sector. However, according to Asean Watch, the value of tourists' spending in Thailand is only half of that in Malaysia, and one-fourth that in Singapore. The average spending by foreign tourists in Thailand is about Bt1,200 per head per day," Busaba said.
Thailand's retail market grew by 6.5-7.5 per cent to about Bt1.48 trillion in total sales last year, according to a report by Office of the National Economics and Social Development Board. Convenience and speciality stores enjoyed the highest growth in the retail sector at 18 per cent each last year, followed by department stores and supermarkets at 12 per cent each. Supercentre stores, however, posted 10-per-cent growth last year.
"We expect the retail market to increase by between 10 and 12 per cent this year. I have concerns about only one risk, the possibility of conflict among the people," Busaba said.
She said the growth of the retail industry would be focused on rural rather than urban areas. The retail growth rate in Bangkok and provincial cities is expected to reduce significantly from 8 per cent in 2012 to only 3 per cent this year. In rural areas, the growth is 7 per cent in the Central region, 8 per cent in the Eastern region, 9 per cent in the Northeast, and 10 per cent in the South.
"About 80 per cent of our retail suppliers are small or medium-sized enterprises. The government should have a policy to help SMEs get ready to expand into foreign markets in line with the overseas expansion of local retailers, and to cash in on the upcoming Asean Economic Community in 2015," Busaba said.
The TRA itself has a policy to upgrade the working efficiency of SMEs through four major programmes to be conducted throughout 2013. These are entrepreneurship development in modern marketing; developing brand image; planning marketing strategy; and surveying the Asean market.