May 15, 2014 00:00
By KWANCHAI RUNGFAPAISARN
THE THAI RETAILERS Association (TRA) expects the country's retail sales will increase by just 5-6 per cent this year, below the average growth of 8 per cent achieved over the past 15 years.
The association has, therefore, proposed that the authorities in
One such measure is to allow more than just one operator to open duty-free stores in the Kingdom’s airports, in order to foster free competition in locations all around the country and generate more income for the government.
The government should also introduce measures to increase average tourist spending, as well as transform Phuket into a shoppers’ paradise and boost economic growth, according to the TRA.
Chatchai Tuangrattanapan, the association’s director, said sales of fast-moving consumer goods (FMCG) had dropped by 2 per cent year on year in the first four months of the year, the lowest performance in 10 years.
“FMCG should be one of the last products being negatively impacted by economic difficulty and lower consumer spending power. FMCG also accounts about 50 per cent of total consumption in the country,” he said.
Chatchai said retail sales should normally grow by 3-4 percentage points on top of the country’s economic growth, which is now forecast to increase by only 2.5-3 per cent this year due to political and economic difficulties, as well as declining consumer spending power.
Given such a forecast range for gross-domestic-product growth, retail sales should increase by only 5 per cent to 6 per cent this year, he added.
The TRA director also said that Thailand had over the years consistently been regarded by tourists as one of their dream destinations, and the country’s tourism industry had seen a consistent increase in the number of visitors year after year.
“Last year, Thailand welcomed over 26 million foreign visitors … The increase in visitor arrivals leads to higher earnings for restaurants, hotels, spas and other sectors of the tourism industry. Chatchai said that over the past three to four years, the association had petitioned the government to consider launching a pilot project to boost average tourist spending in Thailand by cutting the import duty that foreign visitors have to pay for purchases here to zero.
“Today, more than half of foreign visitors to Thailand are from Asian markets such as China, and many are highly enthusiastic when it comes to shopping for fashion and brand-name products.
“However, Thailand still cannot compete with its neighbouring countries in this regard, lagging behind in both pricing and variety.
“To address these shortcomings, the country needs to set itself apart with attractive incentives for shoppers. The Federation of Thai Industries and the Commerce Ministry have both voiced support for the opening of new duty-free stores instead of cutting import taxes to attract shoppers from around the world, as well as to encourage more spending,” he said, suggesting that commercial concessions at Suvarnabhumi Airport should be opened up for multiple licence holders to provide visitors with more variety.
Chatchai has also proposed the following courses of action for the public sector to consider:
lAllow customers to collect purchased goods from downtown duty-free stores and at pick-up counters at airports without limiting concession rights to a single proprietor, thus generating more revenue for Airports of Thailand and providing visitors with a more convenient shopping experience.
lEncourage the opening of downtown duty-free stores, especially in major tourist hotspots.
lAmend the Customs Depart-ment’s regulatory processes to aid the opening of new duty-free stores under clear operational guidelines.
lAllow tourists to purchase products at downtown duty-free shops and keep possession of their purchases. The tourist would later need to present the required paperwork to Customs at the airport.
This would lead to greater convenience, increased spending, and higher sales of Thai products.