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12 Dec 2017

Thai Economy

BKK populace to spend THB29.6 bln on New Year Retailers need to go the extra mile (Current Issue No. 2884 Full Ed.)

KResearch expects the Bangkok populace to spend around THB29.6 billion during the 2018 New Year holiday celebrations, up 4.0 percent over 2017. Although this year's shopping tax break allowance has been introduced earlier than in previous years, retailers have organized many campaigns to spur spending during the holiday. Nonetheless, overall spending sentiment is still being pressured by consumers' household debts and a relatively high cost of living, causing concern toward their future purchasing power. Thus, the consumers – particularly low income earners – are planning their spending carefully for this New Year.

Of the total spending during the holiday, THB9 billion is expected to be spent on food & beverages, followed by THB8.2 billion on domestic travel (e.g., accommodation and travel costs), THB8.1 billion on gifts/souvenirs (for themselves and others), THB2 billion on money presented to their parents/siblings, THB1.6 billion on merit making/temple visits, and the other THB700 million on miscellaneous items (e.g., movies and music). Bangkok city dwellers are thus expected to spend THB5,400 per person over the New Year holiday.

This year, 75 percent of Bangkok populace will likely purchase products and services mostly from physical retailers, ‘offline', led by department stores. The main reason they still prefer to shop at traditional stores is because they want to experience goods physically, and because they enjoy strolling in malls and joining in on entertaining activities there, respectively. Such customers should be focused upon in retailers' marketing campaigns to encourage greater spending. Marketing strategies that may attract consumers' attention should likely focus on value for money because the spending mood this year will likely emphasize prudence and merchandise that is easy to find, yet expresses the goodwill of the gift-giver, while not being overly costly.

Bangkok city dwellers also said that in choosing where to shop during the New Year holiday, they will favor locales with a diversity of stores, have sufficient parking space or reasonable queuing times for parking. They also favor shopping locales where customer service is good. Service is key to customer appeal; it should respond to lifestyle choices of Bangkok residents because they appreciate such care and value it highly. Good service garners a feeling of exclusivity, encouraging customers to spend more.

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Thai Economy