Export. Import. Wine Market Thailand. Market Sector Structure.

We want have a look at the Thailand wine sector, we focus here at the size and structure. That will help us to create our marketing strategy.

Thailand, the Southeast Asia‟s second largest economy, is the world‟s number one exporter of natural rubber, rice, frozen shrimp, canned tuna, canned pineapples and cassava, and the number two exporter of sugar.

In 2010, wine in Thailand was affected by AFTA – the Asian Free Trade Agreement – which allows 0% imported tax for wine from Asian countries. As a result of this, wine became more varied with wines from many countries becoming available, especially New World wines. Thai wines were gaining more acceptance and becoming popular among consumers. On the other hand, from the perspective of consumer behaviour, many Thai consumers were becoming more familiar with drinking wine and wine players were becoming more aggressive in presenting and promoting products.

It is expected in the year 2011, Thai economy will continuously to expand at the normal range of 3.5-4.5%. The main driver contributed to this growth is domestic spending, both consumption and investment, which are projected to grow from 2010. Strong purchasing power is also expected due towage increases.

The retail market accounts for more than 70 percent of total food spending, while consumers are allocating a lower proportion of their expenditures to food service (30 percent). However, eating out and patronizing restaurants is growing among the younger generation, as well as working professionals, as it is more convenient and efficient than cooking at home.

Retail sector
The country‟s retail sector is a vital component of the Thai economy and retail sales in Thailand are predicted to continue growing despite concerns surrounding the world economic downturn and domestic political uncertainty. Retail sales accounted for 16 percent of GDP and the industry accounted for 15% of total employment. According to the Thai Retailers Association, the retail market for 2011 will grow by 7 percent with a gradual improvement of consumer spending in 2011.

Thailand’s retail sector has experienced an increase in new investments from both local and foreign players since 2003. Driven by hypermarkets and convenience stores, Thailand is the second most dynamic retail market in Asia after China. Nowadays the consumers have a variety of choices range from convenience stores to giant hypermarkets, which can be found on every corner of Bangkok and major cities. There are about 9,918 convenience stores in Thailand (53% are 7-Eleven). Thailand is now the world‟s third largest 7-Eleven network after only Japan and US.

Over 90 percent of urban Thai shoppers use convenience stores and they visit them regularly, an average of 13 times a month. It is reported that an average of 6 million customers visit convenience stores each day. That the reason why Thai convenience retail is enormously competitive. There are:
1.CP All’s 7-Eleven
2.Tesco Lotus Express
3.FamilyMart.

Multinational retailers have dominated Thailand‟s modern food retail market with aggressive store expansion since 2000, especially in the hypermarket segment. The majority of these investments have come from the leading international retail chains:

UK-based Tesco with its Tesco Lotus stores.
Big C Supercenter of Casino Guichard-Perrachon SA of France.
Carrefour of France.
Netherlands-based Makro.

In November 2010, Big C Super Center acquired the business operations of the Thailand Carrefour Group, paying a value of $1.2 billion. As a result of the acquisition there will be only two hypermarkets left, which are BigC and Tesco Lotus dominating the country‟s hypermarket segment. About 90 percent of urban Thai shoppers use hypermarkets at least once a week. They average spent is about $150 per month on retail products, of which 49 percent was spent on fresh foods.

The competitive supermarket segment is mainly concentrated in Bangkok where higher levels of consumer income and sophisticated customer base support this retail format. These supermarkets has more of an medium to upper market positioning, offering a wide range of high quality and broader assortment of local and imported processed food, fruits and vegetables, meat and seafood, and beverages. They use price strategies and loan extensions to low-income consumers led to the closure of many traditional stores. Modern retailing accounts for approximately 70 percent of total retail sales.

Supermarkets and hypermarkets are the best method of entry for exporters to enter Thailand‟s retail food market and offer a variety of quality products at competitive prices to satisfy Thai customers‟ desires.

The main factors exporters should consider for wine are pricing, shelf life of the product, and consumer preferences. The traditional „Mom and Pop‟ stores and wet markets in Thailand are not the ideal entry points for exporters as price sensitivity and preferences for traditional diets by consumers in this sector are not a good match. The ASEAN Free Trade Area (AFTA) is one of the major factors contributing to shift in manufacturing bases. As the hypermarket business in Thailand is in effect an oligopoly, dominated by a few large companies, they normally have high bargaining power with suppliers.

The slowdown in the local economy led modern retailers to increase their focus on expanding their house brand product offerings as well as offering value for money promotions and discounts. Most supermarkets and hypermarkets in Thailand have their own house brands for ready-to-eat foods, ready-to-cook prepared foods, home-made bakery items, sausages, water, cooking oil, rice, sauces, dairy products and fruit juice. Almost all hypermarket and supermarkets provide space for fast food outlets, kiosks, laundry, a florist, bookstores, photography, movie rentals and restaurants.
HRI Food service sector

Hotels, resorts, restaurants and institutional contracts are the heavy users of imported food for food preparation and ready-to-eat meals at restaurants, catering services for airlines and cruise lines. This is because this sector attracts middle to higher income Thais, Thai corporate businessmen, resident expatriates, and tourists. Consumer expenditure on hotels and catering per capita was $164, a 4.65 percent decreased from the previous year. Thailand‟s HRI food service sector is inevitably reliant on the tourism industry. Food and beverage sales in hotels and resorts account for about 30 percent of total revenues. The average rate of imported food versus locally produced food in the entire HRI sector is 30 %.
Food Processing Sector
Thailand‟s food processing industry has developed rapidly throughout the past decade and is one of the most developed in South East Asia.

There are over 10,000 food and beverage processing factories consisting of small, medium and large-scale plants. Most of these factories, which are small to medium size, serve mostly the domestic market, while medium to large food processors tend to produce higher-valued products for the domestic and export markets.

Thailand‟s food processing sector is heavily export-oriented with more than 50 percent of production sold outside the country.