COMPETITION AND COMPETITIVE ADVANTAGE OF RETAILING BUSINESSESS IN THAILAND

H.E. Wattana Muangsook, the Minister for Commerce speaking on the future of competition among retailing businesses in Thailand to senior students, lecturers and guests.

HE. WattanaMuangsookposesforagroup photo withPnesidentBro.BanchaSaenghiran officials and faculty members at Bang Na on August 16 after his lecture on diminishing advangages for Thailand retail businesses.

Lecture by Minister of Commerce, H.E. Watana Muangsook at Bang Na on August 16.

The Commerce Minister said that the trend for the retailing businessess had dramtically changed due to the emergence of "Regionalism", Free Trade Area, and all kinds of economic cooperation. He emphasized that the future of retailing businesses would be affected by the new tendency towards ' 'service'' retailing, where employment of workers will be less significant. Nevertheless, he also argued that "high tech" can still not replace the world of "high touch". Spa business was mentioned as an example. The time lag in adoption of changing technology by retailing businesses will result in competitive disadvantage, which will require all retailers to cope with this change on a daily basis or die out from the industry altogether.

Macro-business or large scale enterprises of a nation will naturally be concerned with domestic consumption (44%) and exports (56%). Satisfying the domestic consumption has been usually perceived as having higher priority than exporting. Therefore, it is the role of government to stimulate consumption, and maintainging demand domestically.

The most important thing for retailing businesses in Thailand should be from demand side rather than supply side. Retailin outlets will still be very important in the long run supported by efficient logistical processing like Wai Mart in US.

The role of Ministry of Commerce is to balance the demand and supply from the side of consumers, and manufacturers, respectively.

Relating to the existing retailing competition, and the tendency to resort to price competiton, like the present situation between Big C and Tesco Lotus, he said these may be considered as offshoots of capitalism and pure competition. The government should not intefere with this mechanism. Contradictory though it may appear, government should interfere with the price structure of rice and other agricultural products to ensure fair competition. The competittive equilibrium should be developed despite strong involvement in terms of funding from the government.

Another factor of equal importance is the understanding of the consumers' behaviors. It is essential to understand the lifestyles, and psychological characteristics of the consumers so that they can be the success factors. The extreme example on adaptation of retailing busiensses is the "Do it Yourself' programs that Tesco Lotus had introduced and they can modify, even renovate the infrastructure to cope with the ever-changing, and demanding needs of the consumers.

Contributed by Dr. Chansak A.
Chairperson, Marketing Department.