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Thailand: Traditional trade makes strong comeback

Traditional trade has made a strong comeback during the Covid-19 crisis, with consumers flocking back to conventional retail stores, especially in upcountry areas.

Somchai Pornrattanacharoen, president of the Wholesale and Retail Association, said that since the coronavirus outbreak, traditional trade at mom-and-pop shops and local wholesale shops has seen continuous sales growth.

The Covid-19 crisis has prompted consumers to stay close to home and shop at non-air-conditioned stores in their own neighbourhood.

Milin Veraratanaroj, chairman of Tang Ngee Soon Super Store Co, one of the largest traditional wholesale and retail chains in Udon Thani, said rising unemployment nationwide has led workers to return to their hometowns and become buyers in those areas.

In addition, with tepid shopping through modern trade outlets, several consumer goods companies have shifted to heavy promotional campaigns through conventional retail outlets.

Mr Somchai said the government’s stimulus measures also helped boost sales growth at traditional trade operators.

“The sales proportion of traditional trade made up as much as 70% before the 1997 financial crisis,” he said. “But with the entry of foreign modern trade after 1997, the proportion gradually dropped to 30-40% until late last year. Thanks to the Covid-19 pandemic, the sales portion of traditional trade at present has climbed to nearly 50%.”

According to Mr Milin, the impact of Covid-19 on Thai traditional trade sounds much like the intrusion of the international modern retail chain after the 1997 financial crisis.

“At first, we were very concerned about the Covid-19 outbreak,” he said. “But with an immunity developed from the disruption of foreign modern retail chains, it has taught us a lesson. We’ve developed and adjusted ourselves to become stronger and deal with stiffer competition.”

The company has also expanded online services by selling products over the last three months.

Amorn Phutthiphiriya, vice managing director of Thanapiriya Plc, the operator of Thanapiriya stores, said the company’s business has held up well amid the pandemic.

Thanapiriya has thoroughly adjusted to cope with the changing environment and applied a database on the frequency of shoppers for product offerings at its stores. Premium products are made less available while standard products are offered more.

Moreover, Thanapiriya has had to make its stock lean and update the buying trends of each product category.

“Sales management is much like art, we have to know which product is price-sensitive and then set up a price range that fits it,” Mrs Amorn said. “Consumers in upcountry areas are also responding well to promotional campaigns.”

Source: https://www.bangkokpost.com/business/2005495/traditional-trade-makes-strong-comeback