Required Report - public distribution

**Date:** 12/27/2004

**GAIN Report Number:** TH4143

TH4143

**Thailand**

**Retail Food Sector**

**2004**

**Approved by:**

![](media/image1.wmf)Russ Nicely, Agricultural Attache

U.S. Embassy, Bangkok

**Prepared by:**

Sukanya Sirikeratikul, Marketing Specialist

**Report Highlights:**

Retail trade is an important sector for Thailand, accounting for
approximately 14 percent of Thailand\'s GDP and 44 percent of total
consumer expenditures in 2003. The continued development of food
retailing stores can be seen all over Thailand, especially the
significant increase in hypermarkets, supermarkets and convenience
stores. Supermarkets and hypermarkets are the best entry points for U.S.
exporters to enter Thailand\'s retail food market. It is estimated that
the total number of food retail outlets will rise to 350,000 outlets in
2008.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Bangkok \[TH1\]

\[TH\]

**TABLE OF CONTENT**

[SECTION I. MARKET SUMMARY 3](#section-i.-market-summary)

[SECTION II. ROAD MAP FOR MARKET ENTRY
13](#section-ii.-road-map-for-market-entry)

[SECTION III. COMPETITION 16](#section-iii.-competition)

[SECTION IV: BEST PRODUCT PROSPECT
18](#section-iv-best-product-prospects)

[SECTION V. POST CONTACT AND FURTHER INFORMATION
20](#section-v.-post-contact-and-further-information)

[SECTION VI. APPENDIX 21](#section-vi.-appendix)

# SECTION I. MARKET SUMMARY

The Thai economy continues to perform well this year with an estimated
growth rate of 6.4 percent in the Gross Domestic Product (GDP), while
the projected GDP growth rate for 2005 is around 5.8 percent. Retail
trade is an important sector for Thailand, accounting for approximately
14 percent of Thailand's GDP and 44 percent of total consumer
expenditures in 2003. It is also a major employer, with employment in
the retail trade sector estimated at roughly 15 percent of total
employment in Thailand. Since 1999 the Thai economy has gradually
recovered from the economic crisis suffered in 1997, which is evident in
the increase in the number of retail business and outlets. A liberal
regulatory regime has encouraged an influx of multinational retail
business investment in modern retail formats in Thailand. The majority
of these investments have come from leading international retail chains:
UK-based Tesco with its Tesco Lotus stores; Carrefour of France and Big
C; and Netherlands-based Makro.

Thailand's retail market is dynamic with diversified retail formats in
operation, including hypermarket stores, shopping centers, supermarkets
and convenience stores. The largest retail group in Thailand is Ek-Chai
Distribution System Co. Ltd, which operates Tesco Lotus Supercenter and
Lotus Express, which generated about USD1.374 billion in sales turnover
in 2003. Other major retailers include, Makro with turnover of USD951
million; Charoen Pokphand group, operating 7-Eleven convenience stores
(USD778 million); Central Group (USD673 million); The Mall Group (USD654
million); and Cencar, operating Carrefour outlets (USD398 million). In
2003, trade sources estimated that there were about 296,000 food
retailers in Thailand and the average retail sales area per outlet stood
at 85.5 square meters.

Thailand's food retail sales in 2004 are about USD 30.59 billion, which
grew 6 percent from last year, accounting for about 60 percent of all
retail sales in Thailand. This small growth is due to negative factors
including high oil prices, increasing interest rates, a bearish stock
market, unrest in the South, and Avian Influenza. However, a 10 percent
growth rate of grocery sales in 2003 made Thailand the second fastest
growing Asian market, behind China. Hypermarkets (which occupy the
largest portion of the modern trade segment) have accelerated their
expansion schemes to open more branches in Bangkok and major cities and
lead the way in implementing competitive pricing and promotional
strategies (e.g. discounts, rebates and free gifts). These popular
promotion activities are in continuous development and come in many
forms, ranging from discounts in special seasons or occasions, stamp
collection, discount coupons, free gifts, and lucky draws.

Closures of small retail businesses are mainly explained by the
expansion of large multinational discount stores in recent years. The
number of traditional grocery stores reported in 2002 was 283,009, and
this number decreased 3.43 percent to 273,314 in 2003 (Source:
ACNielson). This represents a 2.7 percent shrink from the previous year.
There is strongest growth for small retailers in a number of
non-essential impulse categories, such as beer, whisky, energy drinks
and snacks, all of which grew by over 15 percent. These impulse
categories are all strength areas for both traditional stores and modern
convenience stores.

Thai consumers have moved toward hypermarkets and supermarkets that
provide convenience, one-stop stopping, and a large parking area, as
well as offering a variety, and cheaper range, of products. However,
according to trade sources, the percentage of local consumers shopping
at hypermarkets in Thailand declined from 88 percent in 2002 to 87
percent in 2003, at supermarkets from 70 per cent to only 62 percent and
at convenience stores 74 percent to 71 percent. The share of consumers
going to traditional retail outlets had increased from 81 percent in
2002 to 85 percent in 2003 and to wet markets from 86 percent to 87
percent. Most of Thai consumers, particularly those who live upcountry,
still visit wet markets to buy their fresh food products as they
perceive that products sold at wet markets are fresh and cheaper. In
2003, there were approximately 238 supermarkets, 6,500 convenience
stores/gas marts, 127 hypermarkets/discount stores, 289,135 traditional
grocery stores and around 560,000 wet markets. The leading food
retailers in Thailand are Tesco Lotus, Big C, Makro, Carrefour, Tops
Supermarket, Home Fresh Mart, Foodland Supermarket, Villa Supermarket,
Siam Jusco and UFM Fuji Supermarket.

Tesco Lotus and Carrefour are foreign-owned hypermarket chains, while
Makro is the only cash and carry operation, owned by the Dutch Makro
SHV. Among the supermarket chains, Jusco is owned by the Japanese AEON,
while Tops and Home Fresh Mart is owned by the Thai group, Central
Retail and The Mall Co., Ltd, respectively. Foodland Supermarket is the
only supermarket that is open for 24 hours, and carries many foreign
products, while Villa Market carries a wide range of imported goods and
caters to foreign, particularly Western, expatriates. UFM Fuji
supermarket caters to Japanese expatriates in Thailand with its wide
range of imported Japanese products. Foodland, Villa and UFM Fuji are
owned by Thai operators, in spite of their foreign positioning. Although
they have only a small number of outlets, compared to the larger
hypermarket and supermarket operators, their influence on Bangkok urban
lifestyles and expatriates and upper-income communities is significant.
These modern trade companies, especially the ones that target imported
products, represent excellent opportunities for U.S. exporters of
consumer food items.

**Leading Retailers in Thailand Ranked by Retail Turnover 2003**

+------------------------+------------+------------+-------+---------+
| **Retail Group**       | **Retail   | **Retail   | **No. | *       |
|                        | Turnover   | turnover   | of    | *Retail |
|                        | 2003**     | 2002**     | Outl  | Sales   |
|                        |            |            | ets** | Area    |
|                        | **(USD     | **(USD     |       | (sq     |
|                        | million)** | million)** |       | m)**    |
+------------------------+------------+------------+-------+---------+
| Ek-Chai Distribution   | 1,374      | 1,308      | 48    | 520,000 |
| System (Tesco-Lotus)   |            |            |       |         |
+------------------------+------------+------------+-------+---------+
| Big C Super Center     | 980        | 920        | 41    | 224,000 |
| Co., Ltd.              |            |            |       |         |
+------------------------+------------+------------+-------+---------+
| Central Group (Tops)   | 962        | 750        | 78    | 830,000 |
+------------------------+------------+------------+-------+---------+
| Siam Makro PCL         | 951        | 920        | 23    | 410,000 |
+------------------------+------------+------------+-------+---------+
| Charoen Pokphand Group | 778        | 728        | 2,640 | 625,000 |
| (7-Eleven)             |            |            |       |         |
+------------------------+------------+------------+-------+---------+
| The Mall Group Co.,    | 654        | 549        | 9     | 390,000 |
| Ltd. (The Mall,        |            |            |       |         |
| Emporium)              |            |            |       |         |
+------------------------+------------+------------+-------+---------+
| Cencar Co., Ltd.       | 398        | 355        | 18    | 290,000 |
| (Carrefour)            |            |            |       |         |
+------------------------+------------+------------+-------+---------+
| AEON Co., Ltd. (Siam   | 123        | 96         | 10    | 255,000 |
| Jusco)                 |            |            |       |         |
+------------------------+------------+------------+-------+---------+
| Foodland Supermarket   | 94         | 78         | 8     | 34,000  |
| Co., Ltd.              |            |            |       |         |
+------------------------+------------+------------+-------+---------+
| Delhaize Le Lion (Food | 73         | 52         | 35    | 82,500  |
| Lion)                  |            |            |       |         |
+------------------------+------------+------------+-------+---------+
| Family Mart (Siam) Co. | 70         | 55         | 255   | 65,000  |
| Ltd.                   |            |            |       |         |
+------------------------+------------+------------+-------+---------+

Source: Euromonitor

The retail food business can be classified into two types: traditional
trade and modern trade. Characteristics of the traditional trade can be
defined as follows: being family-oriented in its nature and owned by
Thais; providing old-fashioned service and exhibiting outdated displays:
operating the business with non-standardized management systems and
limited investment; being located in small commercial buildings, in
local communities. The modern trade's characteristics are as follows:
providing modern services and displays; operating business with
standardized management systems; putting large investments in technology
and innovation to attract customers.

A study by the Bank of Thailand has compared gross margin and selling
expenditure as follows:

**Gross Margin and Selling Expenditure by Retail Format**

  ----------------------------------- ---------------- -------------------
  **Retail Format**                   **Gross Margin** **Selling
                                                       Expenditure**

  Discount stores (e.g. Central, The  40-45            35-40
  Mall)                                                

  Department Stores (e.g. Pata, Tung  35-40            30-35
  Hua Seng)                                            

  Category Killers (e.g. PowerBuy,    30-35            25-30
  SuperSport)                                          

  Supermarkets (e.g. Tops             20-25            15-22
  Supermarket)                                         

  Hypermarkets (Carrefour, BigC,      16-18            12-15
  Tesco-Lotus)                                         

  Cash and carry (e.g. Makro)         11-13            8-10
  ----------------------------------- ---------------- -------------------

Source: Bank of Thailand

In Thailand, consumers now go to more types of retail outlets than
before. The large format hypermarkets are a growing presence in
Thailand. While the pace of new store openings has somewhat slowed down,
hypermarkets are still the main outlets to buy grocery products for more
than 60 percent of urban shoppers. Large format stores are providing
one-stop shopping with a wider range of products, and a comfortable,
large shopping environment. Two big major convenience stores in
Thailand, 7-Eleven and Family Mart have also been suffering to some
extent from the proliferation of hypermarkets. To improve their
competitiveness, they are expanding their selections to include more
variety of products including fresh foods, books, and entertainment
products. Traditional grocery stores offer convenience in terms of
location and service. Many traditional family-owned retailers,
meanwhile, have decided that it makes more sense to become convenience
store franchisees.

Despite the expansion of large hypermarket and supermarket chains, the
low price, familiarity and close location of wet markets are still
preferred by many, particularly those in the lower income brackets. Most
Thai people still shop at wet markets for their purchase of fresh food
products. Thai consumers have the highest frequency of visiting wet
markets, with an average of 18 visits per month, convenience stores at
least 6 times a month, and 4 times a month for supermarket and
hypermarket commitments. The continued development of retail stores can
be seen all over Thailand especially the significance increases in
hypermarkets, supermarkets and convenience stores.

**Food Retail Market Sizes**

  -------------------------------------------- ---------- ---------- ----------
                                               **2002**   **2003**   **2004**

  Food retail sales (USD mil)                  26,135     28,806     30,591

  Food retail sales/per capita (USD)           420        459        482

  Modern grocery distribution, food sales (USD 9,469      10,185     10,859
  mil)                                                               

  Modern grocery distribution, food sales /per 152        162        171
  capita (USD)                                                       
  -------------------------------------------- ---------- ---------- ----------

Source: M+M Planet Retail

Consumer expenditures on food products and non-alcoholic beverages in
2003 was led by bread/bakery products/cereals, followed by meat, fruit,
non-alcoholic beverages, mineral water/soft drinks/fruit juice/
vegetable juice, milk/cheese/eggs, vegetables, other food, fish,
oils/fat, sugar/confectionary and coffee/tea/cocoa. Beer is still the
mostly highly consumed alcoholic beverage, due to lower prices relative
to wine and spirits. However, with the economic recovery, wine and
spirits, which are drinks associated with luxury values and socializing,
should regain higher proportions of sales.

**Average Retail Sales Area by Outlet Type 1999-2003 (Sq m/Outlet)**

  ---------------------- ---------- ---------- ---------- ---------- ----------
  **Outlet Type**        **1999**   **2000**   **2001**   **2002**   **2003**

  Supermarket            2,608.7    2,523.3    2,373.5    2,039.4    1,917.2

  Hypermarket/discount   13,619.0   18,857.1   16,764.9   15,486.7   15,608.7
  store                                                              

  Convenience store/gas  32.3       28.9       28.7       29.8       30.1
  mart                                                               

  Small retailers ("mom  14.9       14.9       14.6       14.9       14.9
  and pop")                                                          
  ---------------------- ---------- ---------- ---------- ---------- ----------

Source: Euromonitor

**Company Profile (as of June 2004)**

+-----------+-----------+-----------+---------+----------+-----------+
| **Name**  | **        | **Type of | **Ba    | **Pro    | **Total   |
|           | Ownership | B         | ngkok - | vinces - | Number of |
|           | (Legal    | usiness** | No. of  | No. of   | Outlets** |
|           | Entity)** |           | Ou      | O        |           |
|           |           |           | tlets** | utlets** |           |
+-----------+-----------+-----------+---------+----------+-----------+
| CP        | Thai      | Co        | n/a     | n/a      | 2,860     |
| 7-Eleven  |           | nvenience |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Family    | Thai      | Co        | 300     | 200      | 500       |
| Mart      |           | nvenience | (est.   | (est.    |           |
|           |           |           | figure) | figure)  |           |
+-----------+-----------+-----------+---------+----------+-----------+
| SHV Makro | The       | Cash-     | 8       | 21       | 29        |
|           | Ne        | and-carry |         |          |           |
|           | therlands |           |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Big C,    | French    | Hy        | 19      | 22       | 41        |
| (Casino   |           | permarket |         |          |           |
| /Central) |           |           |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Lotus,    | UK        | Hy        | 18      | 31       | 49        |
| (Tesco    |           | permarket |         |          |           |
| Group)    |           |           | 0       | 1        | 1         |
|           |           | Su        |         |          |           |
|           |           | permarket | 27      | 3        | 30        |
|           |           |           |         |          |           |
|           |           | Co        | 0       | 11       | 11        |
|           |           | nvenience |         |          |           |
|           |           | Store     |         |          |           |
|           |           |           |         |          |           |
|           |           | Value     |         |          |           |
|           |           | Store     |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Carrefour | France    | Hy        | 17      | 3        | 20        |
|           |           | permarket |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Tops      | Thai      | Su        | 49      | 9        | 58        |
| Su        |           | permarket |         |          |           |
| permarket |           |           | 9       | 3        | 12        |
| (Central  |           | Ma        |         |          |           |
| Retail)   |           | rketplace | 1       | 0        | 1         |
|           |           |           |         |          |           |
|           |           | City      |         |          |           |
|           |           | Market    |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Home      | Thai      | Su        | 7       | 1        | 8         |
| Fresh     |           | permarket |         |          |           |
| Mart (The |           |           |         |          |           |
| Mall)     |           |           |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Siam      | Japan     | Su        | 10      | 0        | 10        |
| Jusco     |           | permarket |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Foodland  | Thai      | Su        | 8       | 1        | 9         |
|           |           | permarket |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+
| Villa,    | Thai      | Su        | 9       | 0        | 9         |
| Su        |           | permarket |         |          |           |
| permarket |           |           |         |          |           |
+-----------+-----------+-----------+---------+----------+-----------+

Because of forecasts that the Thai economy will slow down in 2005, Tesco
Lotus, Big C, Carrefour and Tops Supermarket plan to focus more on their
Private Label brands. House, or Private Label brand products, are
playing a moderately increasing role in Thai retail businesses with
better image and quality. Most retailers grasped the opportunity, when
prices of imported products were highly marked up, by introducing
house-brand products at cheaper prices. On average, the prices of
private labels are around 10-20 percent lower than those of brand name
products. Hypermarkets have an advantage over many independent
manufacturers in this area as they have close daily contact with their
customers and have considerable knowledge of customers' demands and
changing consumer trends.

In the future house-brand products will be diversified to capture wider
target groups. It is likely that 10 years from now leading consumer
products may see their good positions on the shelves taken away by
house-brand goods as retailers strengthen the positions for their own
products. Most of the supermarkets, superstores, and hypermarkets in
Thailand have their own food brands for ready-to-eat food, ready-to-cook
prepared foods, home-made bakery items, TV dinners, sausages, water,
cooking oil, rice, sauces, cereals, dairy products and fruit juice.
These retailers also provide space for fast food outlets, kiosks, a
laundry, a florist, bookstores, a photographic store, movie rental
stores and restaurants. They also have their own distribution centres to
ensure product freshness and operational efficiency.

**Major Retailers' Private Labels**

  -------------- ---------------------------- -------------------------------
  **Retailer**   **Private Labels**           **Results**

  Tesco Lotus    SuperSave, Tesco-Lotus,      3 percent of total retail
                 Khumka                       sales, or approximately Bt1,200
                                              million per year

  Big C          Leader Price                 Opened outlets specializing
                                              only in Leader Price products,
                                              with retail sales of
                                              Bt50,000-60,000 per day per
                                              outlet

  Carrefour      Carrefour, Harmony, First    5 percent of total retail
                 Line, Blue Sky               sales, or approximately
                                              Bt700-1,000 million per year

  Makro          Aro, Safe Pack, Q-Beach,     5 percent of total retail
                 Hi-style                     sales, or approximately Bt1,800
                                              million per year
  -------------- ---------------------------- -------------------------------

Source: Krungthep Thurakit Newspaper

Credit card service is a new and popular strategy. In the past suppliers
extended credit to corner stores and their customers, allowing them to
make payment after purchasing. A similar concept has retailers today
teaming up with the leading financial service providers to introduce
credit for their retail consumer consumption purposes. These programs
offer the benefits of modern financial management and payment collection
programs. These credit card programs by the giant retailers should have
a big impact on the smaller business who cannot offer anything similar.

**Summary of Retailer Categories and Goals/Strategies**

+------------+----------+-----------+---------+-----------+-----------+
| **Goal/    | **De     | **Hype    | **Cash  | **Supe    | **Co      |
| Strategy** | partment | rmarket** | and     | rmarket** | nvenience |
|            | Store**  |           | Carry** |           | Store**   |
+------------+----------+-----------+---------+-----------+-----------+
| Type of    | A        | A         | A       | A         | A variety |
| products   | variety, | variety,  | v       | variety,  |           |
| sold       | high     | middle    | ariety, | usually   |           |
|            | quality  | quality   | middle  | fresh     |           |
|            | goods    | goods     | quality | goods     |           |
|            |          |           | goods   |           |           |
+------------+----------+-----------+---------+-----------+-----------+
| Target     | Hig      | Middle    | Dmall   | All       | Customers |
| customers  | h-income | and       | ret     | income    | who want  |
|            | c        | l         | ailers, | types     | co        |
|            | ustomers | ow-income | cu      |           | nvenience |
|            |          | customers | stomers |           |           |
|            |          |           | who buy |           |           |
|            |          |           | in bulk |           |           |
+------------+----------+-----------+---------+-----------+-----------+
| Management | 2-3      | 30-45     | 1 month | 10-15     | 15-20     |
| of goods   | months   | days      |         | days      | days      |
| in         |          |           |         |           |           |
| inventory  |          |           |         |           |           |
+------------+----------+-----------+---------+-----------+-----------+
| Price      | Prices   | As low as | Wh      | Daily     | Higher    |
| Strategy   | higher   | possible  | olesale | price     | prices    |
|            | than     |           | price   |           | than      |
|            | hyper-   |           |         |           | sup       |
|            |          |           |         |           | ermarkets |
|            | market   |           |         |           |           |
|            | and cash |           |         |           |           |
|            | and      |           |         |           |           |
|            | carry    |           |         |           |           |
+------------+----------+-----------+---------+-----------+-----------+
| Other      | Me       | M         | Mem     | P         | A         |
| strategies | mbership | embership | bership | romotions | ggressive |
|            | cards,   | card,     | card    | and       | expansion |
|            | credit   | credit    |         | discounts | of        |
|            | cards,   | cards,    |         |           | outlets,  |
|            | pr       | a         |         |           | intensive |
|            | omotions | ggressive |         |           | ad        |
|            | and      | expansion |         |           | vertising |
|            | d        | of        |         |           |           |
|            | iscounts | outlets,  |         |           |           |
|            |          | and       |         |           |           |
|            |          | frequent  |         |           |           |
|            |          | discounts |         |           |           |
+------------+----------+-----------+---------+-----------+-----------+
| Retail     | Varies   | 10,0      | 1,00    | 1,        | 16-100    |
| sales area |          | 00-20,000 | 0-3,000 | 000-3,000 |           |
| sq m)      |          |           |         |           |           |
+------------+----------+-----------+---------+-----------+-----------+
| Retail     | 2,435    | 1,740     | 955     | 570       | 855       |
| Sales (USD |          |           |         |           |           |
| million)   |          |           |         |           |           |
+------------+----------+-----------+---------+-----------+-----------+
| Land       | Usually  | Usually   | Usually | Usually   | Usually   |
| ownership  | are land | rented    | rented  | rented    | rented    |
|            | owners   |           |         |           |           |
|            | th       |           |         |           |           |
|            | emselves |           |         |           |           |
+------------+----------+-----------+---------+-----------+-----------+

Source: Thai Development Research Institute

Supermarkets and hypermarkets are the best points of entry for U.S.
exporters to get into Thailand's retail food market. Large convenience
store chains like CP 7-Eleven can be recommended for selected
foodstuffs. The main factors U.S. exporters should consider for U.S.
food products are pricing, shelf life of the product, and customer
preference. The traditional 'Mom and Pop' stores and wet markets in
Thailand are not an ideal entry level for U.S. exporters considering the
price sensitivity and preference for a traditional diet by the end
consumers in this sector. U.S. exporters should be aware that many U.S.
branded food products such as snack foods, candy, chocolate and
breakfast cereals are already present in the market as locally or
regionally produced food products.

Thai consumer behavior has been dramatically changed in the last decade,
with many choosing to shop in modern, air-conditioned retail outlets
with friendly staff and a wide variety of reasonably priced products.
About 15 percent of Thai consumers shopping at department stores and
hypermarkets are impulse shoppers, which mean that there are a lot of
opportunities for these consumers to try new products that came from the
U.S., especially as part of attractive store promotions that effectively
convey positive message to these impulse shoppers. Most Thai shoppers
are smarter and more price-conscious, with their shopping patterns
driven by attractive promotional activities by different retailers. They
are less likely to have brand loyalty, are more likely to shop around
for special offers, and have become more attentive and responsive to
promotional brochures. However, the advantages of these promotion-savvy
shoppers are that they are mostly open-minded and love to try new
products, which will benefit innovative U.S. products that are in the
introductory stage in the Thai market. In addition, the main shoppers in
Thailand are women who are full-time workers. However, all Thai shoppers
also love to shop during the weekend as a family activity in the
air-conditioned retail outlets. The average monthly expenditure on
groceries is about USD130.

**Thailand Agriculture Trade 1998-2003 (million USD)**

  -------------------- ---------- ---------- ---------- ---------- ---------- ----------
                       **1998**   **1999**   **2000**   **2001**   **2002**   **2003**

  Export               6,598      6,856      6,703      6,829      7,137      8,400

  Import               1,278      1,421      1,671      1,804      1,914      2,293
  -------------------- ---------- ---------- ---------- ---------- ---------- ----------

Source: World Trade Atlas

**Retail Business Information Update:**

**Tesco Lotus:**

-   Tesco Lotus is Thailand's lagest hypermarket chain, and is operated
    by the parent company Tesco PCL of UK. The local Tesco Lotus
    operator is Ek-Chai Distribution System Co., Ltd, with the majority
    of the company owned by Tesco Plc. The Tesco Lotus was originally
    set up in 1995 by the Charoen Pokphand (CP) Group as Lotus
    Supercenter. At the height of the 1997 economic crisis CP sold 75
    percent of its 100 percent stake in Lotus to Tesco, Britain's
    largest retailer. Further dilution followed and today CP's equity
    share is a minimal 2 percent;

-   Currently, Tesco Lotus has created 12,000 jobs and buys 95 percent
    of its products from Thai vendors and manufacturers;

-   Tesco Lotus has three different private labels - \"Super Save\"
    brand for its grocery and hardware products which targets consumers
    earning 20,000 baht or more per month; \"Tesco\" for its health and
    beauty products aimed at shoppers earning 12,000 to 20,000 baht per
    month; and \"Value\", launched in March 2002 for cut-price grocery
    and hardware products. The retail price of \"Value\" items is
    expected to be lower than other private-label brands by at least 20
    percent, and will target lower-income people whose income is below
    12,000 baht a month;

-   Currently, Tesco Lotus has more than 500 house-brand product items
    and expects to increase the total to between 700 and 800 items;

-   Currently, Tesco Lotus has a total of 49 hypermarket outlets located
    throughout the country;

-   Tesco Lotus is the clear leader not only in the hypermarket retail
    trade, but in the entire modern food retail industry. Tesco Lotus
    now has a 5-6 percent share of the country's retail market, which
    includes traditional and modern sales channels, and about 60 percent
    of the company's revenues are derived from groceries and fresh food.
    In 2003, it held a 44 percent market share in the hypermarket
    subsector;

-   The Bt1.3 billion Distribution Center at Wang Noi is one of the
    largest and most sophisticated facilities of its type in Asia, and
    is capable of processing 500,000 cases of food and non-food items
    each day;

-   Tesco Lotus is the leader in the retail trade, with its total sales
    amounting to Baht 57,040 million (USD1,374 million) in 2003;

-   Tesco Lotus will open its first upscale hypermarket store in Hua Hin
    in early 2006

**BigC:**

-   Big C Supercenter is 68 percent owned by the French Group Casino. It
    now operates 41 stores throughout Thailand, with more than 11,500
    employees and commands a 29 percent share of hypermarket sales,
    second only after Tesco Lotus;

-   Total sales of Big C amounted to Baht42,342 million (USD1.02
    billion) in 2003, up from Baht38,214 million (USD920 million) in
    2002 and Baht32,637 million (USD786 million) in 2001;

-   Launched the \"price leading\" brand under the name of "First Price"
    after the success of their private label brand of "Leader Price";

-   Big C Supercenter Plc. is introducing a scaled-down store concept
    "mini" Big C offering such upmarket specialties as imported food and
    beverage products. These stores will have 4,500 square meters of
    retail space, smaller than the conventional format which covers
    10,000 to 12,000 square meters, and less than the 6,000 square
    meters of Big C's compact outlets. Each mini store will require an
    investment of 200-300 million baht. This move is expected to help
    BigC capture a share of all customer groups: mini for high-end
    customers, conventional format for mass market, and its Leader Price
    stores, which sell Big C house-brand products, for lower-income
    customers;

-   Big C offers four types of product groups: fresh food (e.g. meats,
    seafood, fruits, etc.) -- 10 percent; dry food (e.g. packaged food,
    beverage, snack, etc) -- 50 percent; and non-food group - 40
    percent;

-   In 2005, BigC will concentrate more on fresh food due to more room
    to grow and relatively high margin of about 18 percent.

**Carrefour:**

-   CenCar, operator of Thailand's Carrefour hypermarkets, is an 80/20
    joint-venture with SSCP Thailand. It has 20 stores and currently
    employs 7,000 people in Thailand and source 95 percent of its
    products from local producers and manufacturers;

-   In 2001, Carrefour Global Sourcing Center's food department moved to
    Bangkok from Hong Kong and has about Baht1.5 billion from exports to
    28 countries - this has placed Thailand at the top of Carrefour
    Global Sourcing Asia for food products;

-   Carrefour opened its 20th branch in Hat Yai on October 15, 2004. The
    store occupies 8,500 sq. m. of retail space and required a total
    investment of Baht900 million (USD22 million) and will carry over
    70,000 product items. However, 95 percent of these are locally
    produced;

-   The future plan for Carrefour is further expansion with a stronger
    focus on customer services, supply chain management and price
    guarantees;

-   Carrefour is currently the fourth largest operator of hypermarkets
    in Thailand.

**Siam Makro:**

-   Siam Makro currently employs 5,000 people. It is the Thailand-listed
    affiliate of Netherlands-based SHV Holdings and opened its first
    store in Thailand as a 65/35 joint-venture with the Charoen Pokphand
    Group in 1989. Following the 1997 financial crisis, CP sold a
    portion of its shares back and held on to only 16 percent;

-   Siam Makro's concept is \"Cash and Carry\": low cost, high volume
    and low margin operations, with the objective to serve not only
    retail customers and professional retailers in the hotel, restaurant
    and resell grocery store business, but also their suppliers;

-   Siam Makro has spent about Baht 2 billion in 2003 on launching six
    new stores and upgrading its 10 existing stores in an attempt to
    cater to an increasing number of clients -- retailers, businesses,
    as well as hotels and restaurants;

-   Makro plans to open more outlets in upcountry, especially provinces
    that have over 30,000 small outlets or where the local population
    exceeds 1 million people;

-   Currently Makro is launching the biggest fresh food section in Asia
    at its newly upgraded store on Sathorn Road. The range of food
    products in the store has been increased from 1,400 to 2,800 items;

-   Siam Makro reported their 2003 total revenue of Baht40, 619 million
    (USD978 million) of which Baht944 million (USD23 milliion) was net
    income;

-   For the third quarter of 2003, the sales growth in Makro is reached
    14.7 percent. The sales growth was mainly to higher food sales
    resulted from a successful 15th anniversary promotion, development
    of the fresh category and continued development of their core
    customers (small retailers, caterers and professionals), and from
    five new stores opened in Chiang Rai, Sakn Nakhon, Suphanburi,
    Chantaburi and Phuket;

-   During November 2004, Siam Makro acquired Siam Food Services Limited
    (SFS) from Diethelm Trading Co., Ltd. Siam Food is a leading
    provider of premium food products and logistic service in Thailand.
    It specializes in the nationwide supply of value added and highly
    specific frozen and chilled meat, seafood, poultry, french fries,
    dairy, bakery and ethnic food and beverage products. Its principle
    customers are in the Full and Quick Service Restuarants industry
    segments, including independent and multi-national restaurant
    operations, hotels and contract food service operations.

**Tops Supermarket:**

-   Tops is able to continue keeping its prices low as a result of
    supplying goods to Jet/Jiffy petrol-station outlets as well as to
    the 71 Tops Supermarkets, Marketplace and City Market around the
    country. This helps Tops to have greater purchasing power due to the
    larger volume and have also lead to a decrease in logistical costs;

-   Tops has embarked on an agri-supply chain project with farmers and
    fruit and vegetable suppliers to minimize pesticide use, make the
    supply chain more efficient and improve agri-practices nation-wide;

-   Tops supermarket expects a growth rate of more than 30 percent in
    gift basket sales this year (last year they sold over 100,000 gift
    baskets during the New Year festive season period);

-   Central has agreed to buy up Food Lion's assets in Thailand and take
    over its leases as it converts the Food Lion grocery stores into
    Tops Supermarkets. This takeover will boost up Tops to have a total
    of 6,500 employees and 71 outlets. Tops Supermarket expects to
    immediately add 300,000 customers and boost sales by more than 10
    percent to Baht 15 billion this year. The Food Lion conversion will
    increase Tops' aggregate retail space to 200,000 square meters;

-   The Central Festival Phuket expects to serve more than 50,000
    shoppers a day, of which 30-40 percent are foreign tourists. It is
    estimated that various and full selections of over 30,000 domestic
    and imported items are available at this outlet with more than 1,000
    items of imported products (over 15 percent);

-   Central Food Retail Company (Tops Supermarket) is Thailand largest
    local supermarket chain with 71 stores under the Tops Supermarket,
    MarketPLace by Tops, and City Market by Tops banners. Central Food
    Retail Co. is also a grocery wholesaler, supplying some 300
    convenience stores (Jet/Jiffy) in Thailand. In March 2004, Central
    Retail Co. bought out its partner, Dutch grocer Royal Ahold, to take
    100 percent control of its supermarket operations in Thailand. The
    company has also acquired 20 Food Lion supermarkets in Thailand from
    Belgium-based Delhaize Group, which is exiting the market.

**The Mall:**

-   Currently, the Mall Group operates a chain of eight shopping retail
    centres under the name The Mall Department Store, and the premium
    luxury shopping retail centre The Emporium;

-   "Home Fresh Mart", the only house brand for The Mall group is
    growing at the rate of 10 percent every year;

-   The Mall Group expects to sell over Bt80 million (USD2 million) of
    New Year gift baskets in year 2005;

-   The Mall has spent over Bt50 million (USD1.2 million) in 2004,
    primarily to give The Emporium a new upgraded identity. This is to
    allow The Emporium to differentiate itself from the two new upcoming
    centres -- Siam Paragon and Siam Centre/Discovery.

-   Sales per square metres were Bt68,700 (USD1,654) in 2003.

**Convenience Stores:**

-   Even though discount stores have pushed down sales of convenience
    stores by 8 to 10 percent, especially on grocery items, convenience
    stores have been adjusting their merchandise mix to offer more
    packaged foods as well as entertainment products such as CDs,
    movies, books magazines, internet access and phone cards;

-   Some Mom and Pop stores have transformed their stores into 7-Eleven
    franchises, while others have installed air-conditioning, brighter
    lighting and less-cluttered display units. Some have begun offering
    delivery services and off-premises sales of consumer products at
    weekend markets in order to survive in the intense competition;

-   Convenience store operator CP 7-Eleven has launched a new service
    enabling customers to order from among 5,000 items at their local
    store, called the 7-Catalog. This catalogue service offers customers
    the opportunity to order from 12 product categories including food
    and beverage products;

-   In 2003, total sales of 7-Eleven stood at Bt32,300 million (USD778
    million). Average weekly sales and sales per square meter remained
    high at Bt621 million (USD15 million) and Bt51,680 million (USD1,244
    million), respectively;

-   A partnership agreement signed with PTT will enable CP 7-Eleven to
    add another 1,000 stores over 2004-2005.

The Thai retail market is very dynamic and there is still much potential
for further growth as the economy continues its rapid growth. By 2008,
total retail sales are expected to reach USD60 billion at constant 2003
prices, with USD30 billion from food retailing. The total number of food
retail outlets is also anticipated to rise to 350,000 outlets in 2008.
Nevertheless, during this period of high retail growth, the inevitable
trend is that traditional retailers such as small "mom and pop" stores
and wet markets are gradually making their irreversible exit from the
Thai retail trade, replaced by a plethora of new modern retailers which,
despite their numerous differences have one thing in common: high levels
of innovation, retail technology and professionalism.

**Advantages and challenges facing US products in Thailand**

  ----------------------------------- -----------------------------------
  **Advantages**                      **Challenges**

  \- Many varieties of U.S. high      \- Severe competition from
  quality agricultural products from  Australia, New Zealand, South
  fresh to processed food.            Africa, Europe and China.

  \- Increase in Thai consumers'      \- U.S. products are not always
  preference for higher quality       price-competitive as compared to
  products.                           imports from China, Australia, New
                                      Zealand and Malaysia.

  \- Local Thai consumers view        \- Local manufacturers can quickly
  US-origin products as being of high improve or change quality of
  quality and safe.                   products, tastes or packaging sizes
                                      according to changes in consumer
                                      behavior, while keeping production
                                      cost low.

  \- Over 10 percent of total Thai    \- Thai people have little
  population live in Bangkok, which   knowledge about U.S. products which
  as a market accounts for 90 percent are new to the market and that
  of the sales of fast moving         makes them reluctant to purchase.
  consumer goods                      

  \- The Thai economy has an expected \- Price is still the most
  annual growth of 4.5-5 percent for  important factor when making a
  2002-2003, which is driving         purchasing decision.
  increased food consumption. Even    
  though price is still the critical  
  factor, in the future customers     
  will demand higher quality products 
  as their incomes grow.              

  \- Proliferation of retail          \- Lack of importer and retailer
  industry. New retail outlets are    knowledge and training in
  expanding which allow consumers in  purchasing and handling of U.S.
  parts of Thailand to get access to  food products.
  new imported products.              

                                      \- Strong local brands which are
                                      either foreign or Thai origins in
                                      many food and beverage products
                                      e.g. Nestle, Singha Beer, etc.

  \- Thai eating habits are adapting  \- Lack of continuous promotion of
  more imported food items.           U.S. varieties in Thai market.
                                      Exporters need to support market
                                      promotion campaigns to open new
                                      markets.

  \- Increase in niche market with    \- Market penetration for imported
  high income and high premium        products is concentrated in Bangkok
  product preference.                 and major tourists-promotion
                                      provinces only.

  \- The growing tourism industry     \- American style mass food
  soaring demand for U.S. HRI         products produced locally cost
  products, especially beef, seafood, less.
  wine, whisky, etc. (No. of          
  international tourists increased by 
  11 percent from 2002 reaching       
  approximately 12 million tourists   
  in 2004).                           

  \- Reliable supply of U.S.          \- Thai government policy and
  agricultural products and advanced  actions try to increase demand for
  U.S. food processing technology.    Thai local products.

  \- Good relationships with foreign  \- High import tariffs on high
  suppliers.                          value consumer food and beverage
                                      products, especially U.S. meat
                                      products, wine, whiskies, cherries,
                                      peaches, grapes, apples, pears.

  \- Gift giving is essential, and    \- Lack of trader and consumer
  luxury foods are preferred.         awareness of U.S. products, while
  Shoppers like to seek and purchase  marketing costs to increase
  new products for gifts.             consumer awareness are high.

  \- Attractive packaging gives the   \- Domestic production improving in
  impression of better quality.       quality and marketing.

  \- Thailand's beneficial geographic \- Due to high import tariffs for
  location is viewed as a gateway to  U.S. imported products, most Thai
  larger Indochina and other Asian    importers shift to importing
  markets.                            products from other Asian
                                      countries, especially ASEAN member
                                      countries.

                                      \- Many NTBs imposed by Thai
                                      government and their agencies.

  \- The fast pace of modern life and \- Most of ready-to-eat meals can
  the increase in the number of       be produced locally.
  singles, one-parent families and    
  working women have led to the       
  change the way food is prepared and 
  consumed.                           
  ----------------------------------- -----------------------------------

# SECTION II. ROAD MAP FOR MARKET ENTRY

**A. Supermarkets, Superstores, Hypermarkets, Supercenters,
Cash-and-Carry outlets**

**[Entry Strategy]{.underline}**

The best method for U.S. exporters to sell to supermarkets, discount
stores, hypermarkets or cash and carry is to directly contact
supermarkets, discount stores, hypermarkets, cash and carry
operationswho import direct, and importers and distributors. U.S.
exporters should be aware that many multinational retailers in Thailand
charge listing fees or a listing allowance for new products. The fee
will be charged in accordance with a formula based on the number of
retail outlets and SKUs (stock keeping unit).

**[Distribution Channels]{.underline}**

The distribution channel to supermarkets, superstores, and hypermarkets
in Thailand normally begins with importers selling to distributors in
turn selling to a central warehouse or direct to retail outlets. The
foodstuffs will be kept either in the importers' warehouse,
distributors' warehouse, or central warehouse before delivery. Some
supermarkets, superstores and hypermarkets operated by either local and
multinational operators can import food products directly and hold them
in their own distribution centres before delivery to each outlet. The
following chart shows the standard distribution channels to
supermarkets, superstores, and hypermarkets in Thailand nowadays.

![](media/image2.wmf){width="4.386805555555555in"
height="4.184722222222222in"}

**B. Convenience Stores, Gas Station Food Marts, Kiosks**

**[Entry Strategy]{.underline}**

The best method for U.S. exporters to enter this Thai market segment is
to contact the head office of convenience stores, gas marts and kiosks.
The major convenience stores like CP 7-Eleven and Siam Familymart are
listed at the end of this report. U.S. exporters should be aware of the
listing fee or listing allowance that may be charged by large
convenience store chains. The fee will be charged in accordance with a
formula based on the number of outlets and SKUs.

U.S. branded food sold in these C-stores is usually produced in Thailand
or in neighbouring Southeast Asian countries. This group of products
includes snack foods, chocolates, cookies, candies, gum and breakfast
cereal. Distributors source U.S. branded food from neighbouring
countries rather than from the United States because of the lower costs
and Asia Free Trade Area (AFTA) preferential tariffs. Trends in the
sales of imported food for C-stores versus locally produced food items
will decrease gradually from five to zero percent, in line with the
purchasing power of low and middle income target group. U.S. products
will be well received by Thai consumers in C-stores if price and quality
is similar to what local suppliers offer.

**[Distribution Channels]{.underline}**

A common distribution channel to convenience stores, gas marts and
kiosks has goods flowing from U.S. exporters to U.S. consolidators and
traders then on to Thai distributors to C-stores, gas station marts and
kiosk distribution centres. Some Thai distributors distribute foodstuffs
directly to C-stores, gas marts and kiosk outlets. Most of the
foodstuffs that are distributed directly to the outlets are fresh,
including baked goods and dairy products. The flow pattern of different
retailers varies depending on the sales volume and number of outlets. A
key ingredient in the success of the larger retailers is control of
their own distribution centers.

![](media/image3.wmf){width="4.772222222222222in"
height="3.6465277777777776in"}

**C. Traditional Markets ('Mom and Pop', small independent grocery
stores and wet markets)**

**[Entry Strategy]{.underline}**

For U.S. exporters, Thai traditional wet markets are more difficult
markets to enter, considering the expected purchase price of products,
low consumer purchasing power, the size and traditional distribution
channels of the outlets and consumer preferences for traditional Thai
and Chinese foodstuffs.

**[Distribution Channels]{.underline}**

Usually local manufacturers will have their own distributors to
distribute their products. Some local producers participate in a Royal
Project in which the distribution is managed by assigned distributors.

![](media/image4.wmf){width="3.58125in" height="4.073611111111111in"}

# SECTION III. COMPETITION

**Current situation in the Thai market**

Domestic products have played a major role in the Thai market because
the cost is perceived to be cheaper than imported foodstuffs. However,
imported foods do relatively well in Bangkok (especially at locations
near upper income residential areas, expatriate-dense areas, and tourist
areas) and other major cities such as Phuket, Hua-Hin, Chiang Mai,
Pattaya, Surat Thani, Trad, Krabi, Phang Nga, Had Yai, and Samui
islands. The ratio of imported food versus domestic food is 30:70. The
United States holds approximately 15 percent of the overall imported
food market.

Imports of U.S.-sourced products have decreased over time because many
U.S. food companies have shifted manufacturing bases from the United
States to Thailand or neighbouring countries such as Australia,
Indonesia and Malaysia. The advantages of AFTA, lower labor, production
and transportation costs, and the relative value of regional currencies
versus the U.S. dollar has made these brands more competitive in
Thailand.

The major advantage of imported foodstuffs versus locally produced food
is that these products could not currently be produced or manufactured
in Thailand and their quality is perceived as better than the local
products. The obvious disadvantage is the higher prices of imported
food. Local manufacturers understand local customers' needs and can
readily improve or change quality of product, taste or packaging size to
suit customer preference.

The advantage of U.S. products versus other foreign products is that
several high quality products could not be produced or manufactured in
other foreign countries. The disadvantages are pricing, delivery time,
and customer preference. As China's geographic area is quite similar to
the U.S., this benefits China in growing and producing the same kind of
products which can be exported to Thailand and compete directly with
U.S. products by being little lower quality but having a significant
difference in price. Other market segments where competitive is strong
include beef, wine, fresh fruits, vegetables and other perishables.

The fact that most households now have microwave ovens, as well as
marketing strategies like giving away free samples and education about
nutrition, are the key to the growth of the frozen food industry,
especially the ready-to-eat-meals. Annual sales of ready-to-eat meals
have reached Baht 1 billion (USD24 million). Sales growth rates are
projected in the range of 20-30 percent a year. However, more than 95
percent of these ready-to-eat meal products are produced locally. For
example, S&P's Quick Meal and Econo Meal brands have a market share of
around 14 percent, with their main target groups office workers and
housewives; 7-Eleven, the market leader in frozen rice boxes, sells
about 750,000 packs of Ezy Go bran a month, worth about Baht 230 million
a year (and having about a 30 percent growth rate since the products
first started in 2000).

Due to the Thai-Australia FTA, which takes effect on January 1, 2005,
the import tariff on Australian wine will reduced sharply to 40 percent.
This will make the price of Australian wine to be about Baht 300-400 per
bottle (USD10) and will influence consumers' buying decision to buy and
drink more Australian wine.

Retailers will no longer be able to rely on their ability to expand in
terms of outlets, but on their capability to differentiate themselves
and to cater to changing consumer trends.

# SECTION IV: BEST PRODUCT PROSPECTS

![](media/image5.wmf){width="7.4625in"
height="8.768055555555556in"}**Thailand Imports and US share of Top 50
Food and Fishery Imports**

Best market prospects for U.S. suppliers include fresh fruits and
vegetables (grapes, cherries, berries, peaches, pears, plums, prunes,
nectarines, citrus, grapefruits, radish, celery, carrots), frozen foods,
fruit juices, breakfast cereal, canned foods (fruit, soup and
vegetables), biscuits, American spices, seasonings and sauces, frozen
sea food (Alaska king crab, fish, mussels, scallops), candy and jelly,
chocolate, dairy products (milk powder, cheese, cheese spread, cream
cheese, whipped cream, sour cream, cheese sticks, cheese dip and
ice-cream), dips, instant coffee, jam, mayonnaise, mustard, Mexican
sauce, nuts (peanuts, walnuts, hazel nuts, pecans, macadamia nuts), pie
filling, micro wave pop-corn, poultry, preserved or dried fruits,
pickles, ready-to-mix pancakes, cookies, bakery ingredients, red meat,
snack foods, syrup, tortilla chip, vinegar, wine and bourbon whiskey as
well as pet food.

The best selling U.S. food products are frozen French fries, fresh
fruits, fruit juice, snack foods, breakfast cereal, canned foods, dried
fruits and nuts, and pet food. Products that are not currently present
in the market in significant quantities but have good sales potential
are cherries, stone fruits, frozen foods, American seafood including
lobster, crab, fish, oyster, mussels; beverages, biscuits, candy,
berries, chocolate milk mix, cooking oil, cheese, dip sauce, sauce and
seasoning, other cooking products, peanut butter, jelly, pie filling, TV
dinners, U.S. beef and bakery ingredients.

# SECTION V. POST CONTACT AND FURTHER INFORMATION

The USDA/Foreign Agricultural Service in Bangkok maintains up-to-date
information covering food and agricultural import opportunities in
Thailand and would be pleased to assist in facilitating U.S. exports and
entry to the Thai market. Questions or comments regarding this report
should be directed to the USDA/Foreign Agricultural Service in Bangkok
at the following local or U.S. mailing address:

U.S. Department of Agriculture

Office of Agricultural Affairs

U.S. Embassy

120-122 Wireless Road

Bangkok Thailand 10330

Tel. +662-205-5106, 205-5121-2

Fax. +662-255-2907

Email: [Agbangkok@fas.usda.gov]{.underline}

Web Site: [www.usdathailand.org](http://www.usdathailand.org/)

# SECTION VI. APPENDIX 

**[Appendix 1]{.underline}: Thailand's Key Economic Indicators (\* in
Billion)**

  ----------------------- ---------- ---------- ---------- ---------- ---------- ----------
                          **Unit**   **2000**   **2001**   **2002**   **2003**   **2004**

  \- Population           Mil.       61.88      62.31      62.80      63.08      63.51

  \- GDP at constant 1998 Billion    3,009      3,073      3,239      3,458      \-
  price                   Baht\*                                                 

  \- GDP Growth           percent    4.8        2.1        5.4        6.8        \-

  \- GNP Per Capita       Baht       77,659     80,249     84,540     91,219     \-

  \- Inflation Rate (CPI) percent    1.6        1.6        0.7        1.8        2.6

  \- Foreign Trade                                                               

  Export                  Billion    67.9       63.1       66.1       78.1       79.0
                          USD\*                                                  

  Growth                  percent    19.5       -7.1       4.8        18.2       23.8

  Import                  Billion    62.4       60.6       63.4       74.3       78.1
                          USD\*                                                  

  Growth                  percent    31.3       -3.0       4.6        17.4       28.6

  \- Trade Balance        Billion    5.5        2.5        2.7        3.8        0.9
                          USD\*                                                  

  \- Balance on Current   Billion    9.3        6.2        7.0        8.0        5.3
  Account                 USD\*                                                  

  \- Balance of Payments  Billion    -1.6       1.3        4.2        0.1        3.6
                          USD\*                                                  

  \- Average Exchange     Baht/USD   40.2       44.5       43.0       41.5       41.3
  Rate                                                                           
  ----------------------- ---------- ---------- ---------- ---------- ---------- ----------

Source: Bank of Thailand

**[Appendix 2]{.underline}: Thailand Minimum Daily Wage**

The minimum wage in Thailand is currently 175 baht per day (USD4.21) in
Bangkok, and between 130-140 baht in other provinces.

  ------------------------------------- ---------------- -----------------
  **Provinces**                         **Baht/Day**     **USD/Day**

  Phuket                                173              4.17

  Bangkok, Samut Prakarn, Nonthaburi,   175              4.21
  Pathum Thani, Nakhon Pathom, Samut                     
  Sakhon                                                 

  Chonburi                              157              3.78

  Nakron Ratchasima and Saraburi        150              3.61

  Kanchanaburi, Chanthaburi,            142              3.42
  Phetchaburi, Ratchaburi, Samut                         
  Songkhram, and Ang Thong                               

  Chachoengsao and Krabi                144              3.47

  Singburi and Narathiwat               135              3.25

  Chiang Mai and Phang Nga              149              3.59

  Ranong and Rayong                     147              3.54

  Ayuddhaya                             146              3.52

  Chumphon, Lamphun, Sa Kaeo, and       141              3.40
  Sukhothai                                              

  Khon Kaen, Trang, Buriram, Prachin    140              3.37
  Buri, Lop Buri, Sing Buri, and Suphan                  
  Buri                                                   

  Nakhon Nayok and Phichit              138              3.32

  Chiang Rai, Nan, Phayao, Phrae, Maha  137              3.30
  Sarakham, Mae Hong Son, Yasothon,                      
  Surin, and Ubon                                        

  The rest of the country               133              3.20
  ------------------------------------- ---------------- -----------------

Source: Bank of Thailand

Remark: 1US\$ = 41.53 baht (2003)

**[Appendix 3]{.underline}: Tourism Overview, Thailand 2000-2004**

![](media/image6.wmf){width="6.270833333333333in"
height="3.7270833333333333in"}

**[Appendix 4]{.underline}: Retailers in Thailand**

###### Siam Makro Company Limited

3498 2nd Fl., Lard Prao Rd

Klongchan, Bangkapi

Bangkok 10240, Thailand

Tel. +662 704-7000 / 375-7000

Fax. +662 375-8866

Contact person: Mr Philip Cox, Food Director (Dry Grocery)

Email: pwcox@siammakro.co.th

Contact person: Mr. Louis Lin, Food Director (Fresh Food)

Email: lin@siammakro.co.th

###### Big C Supercenter Co., Ltd

Fl 7 Univest Building

89/36 Rajadamri Road

Lumpini, Pathumwan

Bangkok 10330, Thailand

Tel. +662 655-5813

Fax. +662 655-5801-2

Contact person: Mr. Yves Braibant, CEO

Contact person: Ms. Jaruwan Thamgaesorn, Director of Fresh Food
Merchandise Division

**Ek-chai distribution System Co., Ltd (Tesco Lotus Hypermarket)**

Modernform Tower

699, Srinakrarin Rd, Suanluang

Bangkok 10250, Thailand

Tel. +662 722-9640/79

Fax. +662 722-9637

Contact person: Mr Jeff Adams, CEO

Contact person: Mr. David Horton, VP Fresh Food Development

Email: david.horton@th.tesco.com

Contact person: Ms. Saijai Warrawatpreecha, VP Grocery Management --
Food

Email: saijai.warrawatpreecha@th.tesco.com

**Central Food Retail Co., Ltd. (Tops Supermarket)**

6th-7th Floor Central Plaza Office Tower

1693 Paholyothin Road

Lard Yaow, Jatujak

Bangkok 10900

Tel. +662 937-1700

Fax. +662 937-1711

Contact person: Mr. Ian Pye, President

Email: pyian@tops.co.th

Contact person: Chiranun Poopat, VP/Buying & Merchandising and Marketing

Email: pochiranun@tops.co.th

**Cen Car Ltd (Carrefour Global Sourcing)**

14th Floor Q. House Sathorn Building

11 South Sathorn Road, Tungmahamek,

Sathorn, Bangkok 10120

Tel. +662 625-4444

Fax. +662 677-3354-5

Contact person: Mr. Jean Paul Khaou, Food Manager

Email: <Jean_Paul_Khaou@carrefour.com>

**The Mall Group (The Mall (Home Fresh Mart)/Emporium/Siam Paragon)**

1909 Ramkhamhaeng Road

Huamark, Bangkapi

Bangkok 10240, Thailand

Tel. +662 310-1000 / 318-8925

Fax. +662 315-6605 / 318-8923

Contact person: Mr Pira Asawapirom, Chief Merchandising Officer

###### Siam Jusco 

129 Ratchdapisek Rd

Dindaeng, Bangkok 10320, Thailand

Tel. +662 246-7026/7031

Fax. +662 245-8760, 246-5985

Contact person: Mr Takashi Takani, Managing Director

###### Foodland Supermarket Co., Ltd

2675 Lard Prao 95

Wangthonglarng, Bangkok 10310, Thailand

Tel. +662 932-2948

Fax. +662 539-0837

Contact person: Mr Supamit Surongsain, Asst. Vice President Marketing

Email: foodland@loxinfo.co.th

###### Tang Hua Seng Department Store

289 Sirinthorn Rd

Bangbamru, Bangplad

Bangkok 10700, Thailand

Tel. +662 434-0448

Fax. +662 434-6057

Contact person: Mr Viroj Chunprathipthong, Managing Director

###### Villa Market JP Co., Ltd

591/1, 4-5 Sukhumvit Rd

Klongton, Klongtoey

Bangkok10110, Thailand

Tel. +662 662-0372-6

Fax. +662 259-1077

Contact person: Mr Surapong Poosanakhom, Managing Director

Contact person: Mr. Pisit Poosanakhom, Executive Director

Email: pisit@villamarket.com

###### CP 7-Eleven Co., Ltd

313 CP Tower, 20th Fl.

Silom Rd, Bangkok 10500, Thailand

Tel. +662 677-9000

Fax. +662 638-2680

Contact person: Mr. Korsak Chairasmisak, CEO

Mr Piyawat Thitasathavorakul, Managing Director

###### 

###### 

###### Siam Familymart

139 Robinson Building

5th Fl Ratchdapisek Rd

Dindaeng, Bangkok 10320, Thailand

Tel. +662 254-1650/1

Fax. +662 255-8573

Contact person: Ms. Sarinya Ardvichai, Category Manager -- Food,
Merchandise Division

Email: sarinya.a@familymart.co.th

End of Report