THAILAND: Discount sector booming in Bangkok

By Clare Harman | 21 September 2000

More than 12 new discount stores have opened in Bangkok since the first quarter of last year, prompting speculation that this is the most active sector in the local retail market. The news comes from International property consulting firm Jones Lang Lasalle, whose manager of research and consultancy, Benjawan Suewongprayoon, added: "aggressive expansion plans by international operators mirror the foreign confidence in Bangkok's retail market and will result in stronger competition in the discount store sector."

Of the 219,700 square metres earmarked for Bangkok's prime retail market since 1999, about 70% has been developed for discount stores, which are largely controlled by international operators such as UK-controlled Tesco Lotus Supercenter, Carrefour Hypermarket of France and Makro of the Netherlands.

Since the sector was pioneered by Makro and Big C Supercenter in 1990 and 1991, the Thai market has been no stranger to discount stores, but improved consumer spending; foreign confidence and increased competition have largely fuelled the recent expansion of the sector. Aside from different marketing strategies and catchment areas, many stores have dealt with competition by increasing service hours, some looking into e-commerce as a viable trading channel.

H1 figures for this year are good within the discount store arena. Carrefour reported a 20% increase in sales revenue, and Big C Supercenter revealed that its own sales revenue was up by 14%. Despite the current market buoyancy however, there are many concerns that the present oil crisis will lead to inflation and undermine consumer confidence. In the meantime though, the market is healthy and several new sites in the city of Bangkok are being considered for development by discount store operators.

Companies: Carrefour, Tesco