THE NATION has named Tos Chirathivat, chief executive of Central Group as Businessman of the Year due to his long vision in transforming Thailand’s largest retail conglomerate to challenge the emergence of digital technology and maximise its omnichannel potential.
A Bt17.5-billion joint venture between Central Group and JD.com, China’s largest retailer, announced in November, not only marks a significant advance for the giant Thai retail group while aiding the country’s digital transformation, it will also bolster trade ties between the countries. The move will shape Thailand’s retail landscape in complying with the Thailand 4.0 economic model, which will focus on value-based and innovation-driven economy.
Set to launch an open-system online marketplace in Thailand starting in April, the partnership is in line with Central Group’s vision to increase the revenue contribution from e-commerce from the current 1 per cent to about 15 per cent over the next five years. It will also make Central Group a pioneer in the retail industry in reorganising its business towards a new digital platform in facilitating its brick-and-mortar retail channel.
For Tos, the joint venture with JD.com will mark a significant step for Central Group and the country in moving towards the digital economy era. The joint venture will enhance strategic co-operation in the area of technology, cyber-trade, e-commerce, logistics, e-finance and international trade.
“It will be an important step for Thailand and Central Group,” he said. “Central Group had been in Thailand for 70 years and was confronting a major change in the retail landscape driven by digital technology. The partnership with JD.com will be another step leading us into sustainable growth in the future,” Tos said.
Tos said that the objective is to establish the first complete digital ecosystem alongside developing Central Group businesses to be the largest omnichannel operator in Thailand. This would fully cater to customers’ needs in the age of Thailand 4.0, while providing Central Group with a healthy growth path, with online sales accounting for over 15 per cent of the group’s business within five years.
“This cooperation will not only create a seamless shopping experience for customers, but it will also support the government’s Thailand 4.0 initiative. This project stresses developing personnel to keep up with the digital world, increasing employment and promoting the exports of SMEs, as well as developing the Eastern Economic Corridor by establishing a head office to be a digital hub for Southeast Asia,” Tos said
According to the Thai Retailers Association, changes in the digital world and consumer behaviour increasingly favouring the purchase of goods and services online will drive the introduction of technology and innovation, causing a new trend of Big Data in the retail business.
Over the past two-three years, the national growth of smartphone usage has resulted in online shopping seeping into the everyday lives of the new generation. Consumer behaviour has started to change, resulting in reduced footfall in department stores.
A future trend to watch is the new model called e-business, also known as O2O (online to offline) or omnichannel. This harmoniously joins the store to the online world with technology. On one side is the benefit of shopping convenience and payments online, while collecting vast amounts of consumer data. On the other side, it uses the strong point of the store having a real product to touch and try out, while also being a place for customers to take a stroll or meet friends. Within another five years, Thais will be using less cash and will pay more with cards or through an electronic channel, combined with card expansion and acceptance under the national e-payment policy.
Big Data is a key trend for retail, because every piece of information about customer spending habits can be processed to find the customers’ likes and lifestyles and better analyse their spending behaviour. This can be the basis of promotions that are better directed at them.