12% eyed as govt measures boost market

   
Growth in the first half came in at 8 per cent, the association said.
Even when faced with the flood crisis, the sector managed to grow 8.5 per cent last year to Bt2.18 trillion, after an 11-per-cent expansion in 2010 and 9.4-per-cent growth the previous year.
Association president Busaba Chirathivat yesterday said the sector would be driven by the government’s stimulus measures, especially those related to housing reconstruction and renovation after the devastating floods.
Another key factor is the increase in the minimum daily wage to Bt300, which was launched to boost consumer purchasing power and would mean greater access to credit and leasing services, she said.
The speciality-store segment has shown high growth, with people spending on household items and electrical products. The rising number of foreign tourists is also an important contributor driving department-store growth, she added.
Risks threatening the sector in the second half of the year include the adequacy of flood-protection measures initiated by the government. However, Busaba said she was confident the government would be successful in this crucial area.
As regards political uncertainty, the private sector is strong enough to survive the current situation as it had learned a lesson from the previous period of discontent, she said.
Although the retail sector’s performance remains strong at home, Busaba raised concern over its role in the context of the Asean Economic Community, which comes into effect in 2015. To date, the government has not defined a clear direction to encourage Thai retailers to play a bigger role in the region as the single market approaches, she said.
Outdated legislation is one of the barriers, she said, adding that the government had still not amended the law, nor had it enacted new legislation to ensure the industry can operate successfully.
In Malaysia, for example, the government has started to reduce tax on imported luxury products to 0-5 per cent, partly in preparation for the AEC. In Thailand, however, tax on imported luxury goods is levied at between 30 and 40 per cent. Malaysian authorities have also tried to promote the country as a shopping destination, she said.
To promote Thai retailers, the association has urged the government to set up a one-stop service to provide information when retail operators seek to invest in a particular Asean market.
Information on each country’s business-registration process, tax system, supply chain and investment incentives are examples of what should be made available, Busaba said.