Retailers, consumer goods firms must keep pace with change 

 
Kiatanantha Lounkaew, assistant to the vice president for research at Dhurakij Pundit University, said that based on what had happened this year, it could be argued that 2017 would be a challenging year for Thai businesses. 
Four important factors will influence the business environment, he said. 
“First, if the Trump administration aggressively pursues its protectionist policy, the health of the global economy will not improve significantly in the foreseeable future. Such a situation is not conducive to our exports.
“Secondly, since China will surely be the prime target of this protectionist policy, slower grow in the Chinese economy may dampen our exports to that market – and we can also expect to see fewer Chinese tourists coming to Thailand. Those who have direct dealings with China will be the first to feel the impact. But, consequentially, the whole country will also be affected as the Chinese economy slows,” Kiatanantha said.
“The third factor is internal. Our economy has not given any significant indication that it is on the path to full recovery. Throughout 2016, surveys on business and consumer confidences have consistently demonstrated that pessimistic views dominate the scene. 
“The fourth factor is cost-push inflation [in Thailand]. The new minimum wage and the prospect of drought in March and April can potentially push the cost of living up; this will stifle already-low consumer spending. 
“These four elements are the [main] challenges that businesses have to take into account when formulating strategy for the coming year,” he explained.
Kiatanantha said more aggressive marketing strategies could be expected as businesses try to tap into whatever is left in consumers’ pockets, with the successful ones being those that could find the right niche to focus on. 
The major marketing battleground will shift to online, as such a platform offers a more cost-effective way to reach desired target groups.
However, he cautioned, “In this kind of competition, the first may not be the best. So don’t be hasty.” 
One proven strategy to increase revenue growth during the current year has been trans-industry partnership, and it is definitely a strategy to be pursued in 2017, Kiatanantha said. 
“The gist of this tactic is to find an ally from a different industry whose strengths complement yours, to beef up your competitive advantage,” he added.
“In retail and consumer products, we can also expect to see intense price competition. These two sectors are to be watched closely since their current profit margins are already low. This is especially true for SMEs, since a great number of them are in these two sectors. SMEs will face an arduous time, as they have less resources with which to compete. 
“Therefore it is critical |that they utilise their resources and staff effectively; find the right market to focus on; develop |proper channels to get connected to their customers; and make sure that they have enough liquidity to operate their business, even when sales figures are low,” he said.
Punyapon Tepprasit, CEO and founder of MVP Consultant, said 2017 would be a challenging year for all industries in Thailand, and especially so for retailers and consumer-goods firms. 
He said consumer behaviour had changed very quickly during the current year, with the usage of search-engine programs having increased by about 250 per cent, besides which there had been changes in online-purchasing models. 
Punyapon said that major challenges for local retailers and consumer-goods companies next year would be understanding that consumer behaviour was changing rapidly, and adjusting marketing strategies in the digital age to create “interactive online marketing” that tapped into this behaviour. 
Therefore, a willingness to accept changes in pricing, size, quantity and promotion is crucial, he stressed. 
“Obsession with outdated strategic promotions may not lead to the right answer to what consumers need, as their capability to reach the information is evolving so quickly, and [unless we react properly] they will keep falling behind competitors,” he explained. 
“A granular-level consideration of each consumer type must be clearly taken and actioned. Using the RFM [recency, frequency and monetary value] model is one effective and highly recommended solution,” he said, adding that the model enables retailers to clearly understand consumer behaviour and leads to the right analysis, resulting in an effective, sustainable marketing strategy.
Central Group CEO Tos Chirathivat said complex challenges for retailers next year would include the diversity of target consumers, as well as the emergence of digital technology, international expansion, and the demographic change in tourists coming to Thailand.
Thailand’s largest retail group recently undertook a major restructuring of its top management, with the addition of |leading professionals and experts to helm the organisation and cope with future challenges |that would dramatically change the country’s retail landscape.
Explaining the nature of customers, Tos said today’s customers could be divided into four major groups – baby boomers, Generation X, Generation Y and those aged 60 and above – who equally make up the market, but complicate marketing activities for suppliers. 
As to international visitors, their demography has changed from mainly those from Europe, the US and Japan, to more diversified inbound tourists from China, the Middle East, Russia, Asian and Western countries.
Tos said another challenge was the emergence of digital technology, which had influenced shopping behaviour, including payment methods, as well as the ways companies delivered products and services.