Distribution Networks in Thailand

Overview by Globlatrade.net:

Evolution of the Retail Sector

Growth and Regulation
The presence of a local agent is indispensable; the main agencies of international advertising are operating in Thailand. The distribution of machinery and equipment is usually carried out by wholesale importers who take the responsibility of the after-sale service function. Department stores, supermarket chains and discount stores are present and the market segmentation is in full development. There are 3 market levels in Thailand : importing companies (small companies managed by Chinese people); big supermarkets (Central, Yahoan, Robinson), supermarket chains (Foodland) and convenience stores (Seven Eleven) and finally, a number of small stores managed by families. In Bangkok, the standard of living is nearly twice higher than in the rest of the country. One must notice the continuous emergence of the middle class, the purchasing power of which is continuously growing.
Market Shares
The retail trade is one of the most important economic sectors in Thailand, in 2008, total retails sales are expected to reach U.S. $78 billion. (Source: MillwardBrown, Marketfocus Thailand, October 2007). During the last ten years Thailand's retail landscape, particularly in prime locations in Bangkok and other major urban centres, has changed dramatically. Traditional small independent retailers have gradually been replaced with modern and often foreign-owned, large retail chains. The traditional stores typically sell all basic items required for day-to-day living and are traditionally located in every small community throughout the country. Normally, these stores operate out of a shop house and do not use or have any electronic data processing in any sequence of their operations. The majority of modern trade stores and outlets are concentrated in the Bangkok metropolitan area. This concept includes department stores, discount stores or hypermarkets, convenience stores, specialty and category killer stores, and supermarkets. Thai consumer behaviour has also been dramatically changed and modern trade stores have gained very high popularity and quickly reached a high retail market share. As the number of discount stores continues to grow, the number of family shop houses and family-run department stores still operating has fallen. Some shop house operators have transformed their stores into 7-Eleven franchises, while others have installed air conditioning, brighter lighting and less-cluttered display units. Some have begun offering delivery services and off-premises sales of consumer products at weekend markets in order to survive in the intense competition. The Hypermarket and Supermarket shares are around 50% in Thailand.

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