Experts look to retail/wholesale revival if GDP expands at healthy rate

But Sompop Manarungsan, president of Panyapiwat Institute of Management, warned that for the sector to hit that target, gross domestic product needed to expand at a healthy rate.
According to the National Economic and Social Development Board’s projection, the economy will expand by 3.5-4.5 per cent this year.
Suwit Kingkaew, president of the Thai Capital Retailers Development Association, said fast-moving consumer goods remained a key driver for the retail businesses this year, with growth forecast at 2.8 per cent.
He added that both modern and traditional traders were anticipating positive growth, 3.5 and 2.2 per cent respectively, despite expecting intense competition.
Small and medium-sized modern traders such as convenience stores and community malls continue to expand upcountry and on the outskirts of key cities.
Big retailers continued to expand in prime city and tourism areas. For example, Central Group, The Mall Group and King Power, the country’s largest operator of duty-free shops, plan to open shopping malls in Phuket to cash in on the tourism boom.
Besides the stimulation from the tourism sector, a change in consumer purchasing behaviour, particularly among the young generation, was another key factor driving retail growth, Suwit said.
He said digital marketing was playing a key role in changing the way consumers buy products.
With smartphone penetration at 36 per cent of the country’s 90 million mobile users, younger customers loved to do research, including reading product reviews and online comments, before making a purchase.
To cash in on this opportunity, Suwit suggested that all retailers should have a home-delivery service, an online presence, flexible payment options and necessary information posted on social-media platforms and online community sites.
However, Sompop warned that it was not all rosy, with the key challenges this year a high level of household debt and low purchasing power, particularly among grass-root people such as farmers.
“If the government does not have proper stimulus measures, the national GDP growth might be affected,” he added.
He said GDP growth would need to be at least 4 per cent this year to get the economy back on track after it grew by only 0.7 per cent last year, mainly as a result of political and economic uncertainty causing a suspension of many public and private investment projects.
The number of investments in the country fell by 6.1 per cent in 2014, he said.
In the wake of plummeting exports, the academic suggested that the junta-controlled government gear the country up to become a service-based economy and keep trying to boost domestic consumption as well as private and public consumption so GDP and the retail sector grew at a good rate.
He hoped that one-third of the 3,469 projects seeking Board of Investment promotional privileges last year would invest in the Kingdom this year. This would be enough to boost the economy sufficiently.
Last year, the value of projects seeking BOI promotional privileges hit a five-decade high of Bt2.19 trillion.
According to the BOI, services and infrastructure projects led the way in seeking privileges, followed by chemicals, plastics, paper, automobiles, auto parts and machinery.