Thailand Business News
Crocs sees good growth ahead in Thai market
Crocs Inc, the leading casual footwear retailer, has set its sights on robust growth for the next three years in the Thai market.
Lawrence Phua, Crocs' general manager for Southeast Asia, said that the Kingdom will play a key role in its regional business expansion. He said "Our business in Asia will continue growing in importance over the next three years, with steady growth in the Thai market."
The company opened two new stores in Bangkok, marking over 100 outlets in Thailand. One store was opened at the Sena Fest Lifestyle Mall on Charoen Nakhon Road whilst the other was at The Mall Bangkae. The company also announced that it will be expanding and upgrading its store at Future Park Rangsit to cope with increased demand.
The company said that Japan and China are currently its largest markets, with Thailand one of its biggest markets in Southeast Asia. The company saw growth in all regions last year. Business in Asia grew by almost 20% from $381 million in 2011 to $457 million in 2012. This was from worldwide revenue of US$1.12 billion, a fourteen per cent increase from the year before. Gross margin also grew to 54.1%.
As consumers search out for the latest fashions, Crocs is repositioning itself. It has over 300 styles available in each season. The company has on offer flats and sneakers, and even women's heels that can be worn as daily wear.
Crocs raised its marketing budget by a third in 2013 to grow its brand footprint. "Now is the time to bolster our marketing efforts to increase consumer awareness about the Crocs brand. We believe the investment will help illustrate the company's evolution from a one-shoe company," said Mr. Phua.
Thai Airways delays plans to fly the A380 to London
Thai Airways International’s plans to to start flying the Airbus A380 to London in December 2013have been delayed by around 11 months.
In a low-key statement the airline said, "Thai Airways regrets to announce that due to important technical modifications, the A380 will not be able to commence its operation on the Heathrow-Bangkok route as planned from Dec 1, 2013,". It added, "A tentative operational date has been set on Oct 30, 2014." According to the airline, the delay is due to modifications of the wing design. THAI took delivery of its first A380 in September 2012, and began using the aircraft for short haul flights to Singapore and Hong Kong. Since that time, THAI has received another three A380s from a total order of six of the giant planes. The other three aircraft are in use on the airline’s Tokyo, Paris, and Frankfurt routes.
In the same press release that announced the delay of the A380 service to London, the company said, "The introduction of the A380 will make flying between London and Bangkok an even more enjoyable and unforgettable experience and we can only apologize for the unforeseen delay."
Chinese foreign investment funds struggling
With the Chinese economy slowing, foreign investment funds (FIFs) are seeing negative returns of late, and the trend shows no sign of reversing any time soon according to Morningstar Research (Thailand). So far in 2013, eleven Chinese stock FIFs with a combined size of 5.5 billion baht have shown negative returns of around 10%. Another thirteen Chinese equity FIFs currently with a combined value of 10 billion baht, have shown mixed returns.
Senior data analyst Kittikun Tanaratpattanakit said that most of the Chinese equity FIFs sold in Thailand are index funds, which adopt a passive investment approach. He said, ”FIFs that deploy an active investment approach do better because they have access to their parent companies' global data”.
Technology such as wide networks, up-to-date information, and a free hand to manage give them an edge. “They can make profit even when market sentiment is poor," said Mr. Kittikun. This can be done by shorting stocks or indices and making money when stock prices go down as well as when they go up.
However, most funds are blind and put money into various feeder funds, which in turn invest in a small number of larger funds. The larger funds buy equities based on certain guidelines with little regard for how they perform, either over the short term or long term. The advantage is that they charge low management fees.
Mr. Kittikun advised investors to make a careful study of each market as well as the overall direction of global assets, especially if the investment is a new one. China equity markets are expected to decline further with a slowdown firmly in play in the country currently.
TAT sets a target of 28 million arrivals
The Tourism Authority of Thailand (TAT) has set a target of 28.01 million international tourist arrivals for 2014. This influx of tourists is expected to raise estimated foreign exchange revenue of 1.326 trillion Baht, an increase of 13% on the 2013 number.
The TAT has also set targets for the domestic tourism market, with 136.8 million trips expected. Domestic tourism is likely to generate around 700 billion baht during 2014, up by some 9% over 2013.
It means that it will be the first time in history the TAT is targeting total revenues of two trillion baht combined from both domestic and foreign tourism.
A day-long briefing called the “Tourism Authority of Thailand TAT Action Plan for 2014” was held at the Queen Sirikit National Convention Centre recently.
At a press conference following the event, TAT Governor Suraphon Svetasreni said, “Finalizing the 2014 marketing plan has been a particularly challenging exercise in view of all the phenomenal and monumental changes taking place both worldwide, regionally, and locally within Thailand, in customer demographics as well as the way the industry does business. Because Thailand is blessed with an unmatched geographical advantage, and numerous other strengths which have served us well over the years, we had to find ways of adapting our strategies to take advantage of our strengths and address some of the looming weaknesses. We think this plan does that.”
The Governor said that “Thainess” and “balance” will be the key words driving tourism in the future. Some of the strategies discussed were to raise awareness of Thailand as a “Quality Destination” and to reduce visitor congestion in the popular destinations by balancing out the promotion of tourism in the low season with that of the high season.