Expanding Kokuyo branches into B2C segment
KOKUYO International (Thailand), a Japan-based manufacturer of office furniture, has announced an expansion of its sales channel in Thailand for the first time in 13 years, to cover the business-to-consumer (B2C) segment, targeting people who work at home with products that suit their environment.
Tarida Klaipracha, chief executive officer, said the company opened its sales office in Thailand in 2004 focusing on the business-to-business (B2B) segment, mainly supplying office furniture to Japanese firms in Thailand. In 2008, the company started expanding its customer base by targeting selected groups of Thai companies in the design, architecture, and interior sectors with specific products catering to their diverse needs.
For the shareholder structure, Kokuyo holds a 49 per cent stake in Kokuyo International (Thailand), with Central Marketing Group (CMG), a manufacturing and marketing arm of Central Group, and Practicable, a Thai furniture manufacturer, holding a 24 per cent stake each. Mizuho a commercial bank in Japan, holds the balance.
The company commands a 80 per cent share of the office furniture market for Japanese firms in Thailand, he said.
Kokuyo has been operating in Japan for 113 years. The company has sales offices in other markets in Southeast Asia, including Malaysia, Singapore, Indonesia, China and Hong Kong. It also has a sales representative in Australia.
“We achieved Bt460 million in total sales last year, up from Bt430 million in 2016. Japanese clients accounted for 70 per cent of our sales with the balance to non-Japanese firms,”said Tarida.
“We aim to achieve Bt600 million in sales in 2020, with Japanese companies accounting for half of the total. About 5 per cent of sales is expected to non-Japanese clients who will be end-consumers,” she said.
Tarida said the company has opened a 250-square metre showroom for walk-in customers on the ninth floor of CentralWorld on Rama 1 Road in Bangkok.
“We are studying a dealer system as well as opening sales corners or shops in department stores in the next stage," she said, adding that the company's 400-square metre major showroom is expected to open in a shopping mall in 2020. The company expects to double its annual sales to Bt800 million by 2023.
Managing Director Sachio Kobayashi said Thailand's furniture market is huge and the office furniture sector still has growth potential of between 5 per cent and 10 per cent per annum.
There is no real major player in the office furniture. The overall furniture market in Thailand was worth about Bt55 billion last year, with Bt5 billion in office furniture. "It is a trend that more Thais are now working more. Office furniture for home will cater to such a trend," he said.
Tarida said that Kokuyo operates three major factories for its furniture in three different countries - Japan for all furniture products; China for work stations, chairs and document cabinets; and Malaysia for steel furniture such as document cabinets and tables. Malaysia is also the production base for Southeast Asia market.
"We have no plan to set up factory in Thailand as we can import office furniture from our facility in Malaysia with no import duty. We also enjoy cheaper raw material in Malaysia, especially for steel furniture," she said.
Tarida said the Thai office also manages the sales of Kokuyo office furniture to Myanmar and Cambodia, while Malaysia is responsible for the Philippines and Vietnam.
