A Study on the Changes of Thailand Retailingby the Global Retailers Expansion
Authors:   Asia-Europe Perspective Association, Chung Wol-Soon 
Published: June 2018

As Thailand went through the rapid economic growth in 1980s, the new retail type condition was necessary between Talat(local market) and department stores. There were supermarkets but they did not function well because of the financial deficit and a lack of management skill. Thus, the creation of the new retail type, despite economic growth, was not introduced. For a long period of time, Thailand retailing constituted only the Talat and department stores, on the opposite extreme ends. The retailing environment in Thailand, however, started to change as global retailers entered Thailand towards the end of 1980s. The global retailers came into Thailand when many regulations were abolished as the financial crisis expanded to economic crisis in 1997. The global retailers influenced local retailing in Thailand in many ways.
The research showed changes in Thailand retailing caused by the entrance of global retailers. First, the environment of retailing markets has changed. The large-scale stores in Thailand were managed by rich conglomerates and the small-scale retailers were decreasing. This was a serious social issue in Thailand as the small-scale retailers got confiscated of their only source of living. In retailing markets, competition was rising and getting fiercer. The new large-scale stores were created in the first place to be located on the outskirts. This is because large-scale stores require wide space and aim for low costs. However, in Thailand, due to mobility issue on the outskirts, large-scale stores entrance into center of a cities was rapidly increasing. Eventually, this caused intense competition in the city, the saturation of markets, environmental problems, and conflicts with medium and small-scale retailers.
Second, the retail type became diversified. Various retail type entered the retailing markets, which used to consist only of Talat and department stores. Generally, the development of markets is caused by the requests within the market. In case of Thailand, the diversification of retail type was caused by the entrance of global retailers. The examples are large-scale stores such as Carrefour’s Hyper market, Tesco’s Super center, and Makro’s Cash and Carry. The common traits of these retail type are that they sell both food and non-food products, they have huge space, they are located on the outskirts for lower costs and they use self-service. They, however, differentiate from each other by having different management strategies such as different local market environment, distribution structure and customers’ purchasing behavior and needs.
Third, there is a change in consuming pattern. Usually, there were large families with small house. They lacked facilities to keep fresh food so they would buy little amount of food. However, the consuming pattern has changed. Due to economic growth, many families started having refrigerators at home but such physical factor does not cause change in consuming pattern. Rather, the inexpensive packages of good offered by global retailers explain the cause of change in consuming pattern. Because Thailand does not have well-functioning wholesalers, the large-scale stores are popular not only among individual customers but also small-scale retailers.
Finally, reinforcement of regulation has taken place. From the end of 1990s, many large scale stores have entered Thailand due to mitigated regulation. The major reinforcements were done with restriction of large-scale stores entering center of a cities, restriction in the use of land, restriction in capital and business for foreigners, restriction in tax, restriction in transportation of goods during rush hour and restriction in employment.