Thailand: King Power budgets B10bn for five years
King Power Group, the country’s largest duty-free operator, plans to spend 10 billion baht for business expansion over the next five years, aiming to become a top five global chain.
Chief executive Aiyawatt Srivaddhanaprabha said the budget will be used to open five duty-free branches in Thailand and overseas, bringing its total to 14 by 2021.
The new stores are planned for downtowns in major tourist destinations, with Chiang Mai one of the locations considered. The group will also join the bidding for a duty- free shop concession at U-tapao airport. King Power is also studying opportunities to manage and open new duty-free shops at airports in Asean such as Myanmar and the Philippines.
A branch in the Philippines is likely to happen before Myanmar, where the laws remain unclear on foreign ownership and investment.
King Power was approached to manage a duty-free shop in the Philippines and has interest because many Filipinos like to travel abroad, he said.
“King Power is set to become a top five duty-free chain within five years. Expansion both overseas and domestically will help grow our sales by 20% to reach 130-140 billion baht in five years, on a par with leading duty-free brands in the US,” Mr Aiyawatt said.
The company is the world’s seventh-largest duty-free chain, with sales of 75 billion baht in 2016, missing its target by 11 billion because of weak spending among Thai tourists and a decline of Chinese tourists after the zero-dollar tour crackdown. Tourists from Thailand, China and other Asean countries contributed about 75% of its total sales last year.
The group aims for sales of 92 billion baht this year, over 20% higher than 2016. “Chinese tourists have rebounded but are not back to normal yet,” he said.
King Power will allocate 400-500 million baht to promote its business this year.
It recently allocated 100 million baht to paint the King Power logo on three Thai AirAsia (TAA) jets and put inside ads on over 40 TAA aircraft.
The group expects the tactic will raise the number of shoppers at its branches by 20% this year.
Mr Aiyawatt said King Power is ready to bid for a new licence to operate a duty-free shop at Suvarnabhumi airport when its licence expires in 2020.
It will also allocate about 2.5 billion baht to renovate its Rang Nam branch in Bangkok, which will be closed for renovation from next month.