KResearch is of the view that AEC integration will present both opportunities and challenges to Thai retailers. One of the more noteworthy benefits of the AEC would be that it will help expand our internal marketplace. This, coupled with likely increases in purchasing power, and even more international tourist arrivals, especially from ASEAN into Thailand should help bolster our retail business. In 2011, ASEAN tourists spent over THB37.5 billion here, up 32 percent YoY. In 2012, we expect that this figure will grow to at least THB42 billion, up 12 percent YoY.
Meanwhile, investors from Malaysia, Singapore, China, Japan, etc., have gradually made greater inroads into the Thai retail marketplace, because they see bright prospects due to the market size, value and growth. However, the proven business capabilities of large Thai retailers, e.g., those operating shopping malls, discount and convenience stores, should enable them to remain competitive against ASEAN rivals.
Many Thai retailers have the competitive potential to expand investments into other ASEAN retail markets – which has a combined annual turnover of at least USD320 million –six times larger than the Thai retail market, as well. Rosy prospects are seen in Vietnam and Indonesia, though Thai retailers may face some trade barriers, e.g., the structure of their retail business systems, consumer behavior and regulatory constraints. But, if Thai retailers are able to comply with local regulations and align their business formats to suit consumers elsewhere in the region, the advent of the AEC in 2015 would present an important opportunity for them to tap into other lucrative ASEAN markets.
One strategy that might work well when delving into other ASEAN retail markets would be to form trade partnerships with established local retailers.
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