SCB Securities recently hosted an open house for local institutional clients with the Thai Retailers Association, offering insight into the shifting preferences of Thai consumers.
Thailand’s retail and wholesale industry grew by 2.5 percent in the first quarter of 2014, and the National Economic and Social Development Board (NESDB) forecasts that the sector will grow by 6 to 7 percent this year. The recent slump in consumption was attributed to slowed activity in the agricultural and labour segments.
However, with the government’s fiscal budget now being disbursed more rapidly, there is a greater chance that some of the stalled mega infrastructure projects will get started. Also, the THB 92 billion being paid to farmers will inject additional liquidity into the economy, brightening economic prospects during the latter half of the year.
In past years, from 2011 to 2013, the retail and wholesale industry grew by an average of 9.6 percent. Of this figure, convenience stores grew most, followed by specialty stores, department stores, supermarkets, and hypermarket and supercenter stores.
The association expects some long-term trends, including the most robust growth in the convenience store segment, reflecting Thai consumers’ preference for buying frequently, in small quantities and at venues close to home.
Other trends show that local consumers are adopting habits in line with those in developed countries. For example, growth will be seen in the health and beauty store format, backed by greater health consciousness. Also, grocery and other essential goods purchases will increasingly take place on line. The DIY mindset is also spreading; the home improvement segment will expand, backed by high purchasing power in the middle class and the growth of residential property developments in Bangkok and large provinces outside the capital.
