Retail market loses B1bn, but expects to bounce back

[Nick]

Narong Intanate.

The financial cost of the two-month-long protests to the IT retail industry in Bangkok has been estimated at around one billion baht, with many vendors losing sales opportunities and some even losing whole premises to fire.


However optimism remains that the market can bounce back and multinational companies remain committed to Thailand.

Harry Yang, managing director at Acer (Thailand), said its headquarters considers last week's events to be a short-term setback and retains confidence in the Thai market in the long term.

Moreover, the company is willing to support the Thai office by offering a marketing budget to aid business recovery and extending A/R credit on a case-by-case basis.

In addition, the company will also increase promotional activities to help its dealers boost their sales.

Yang considers Pantip Plaza to have been the worst-affected site, with a 30-50 percent drop in sales over the past two months due to the Red Shirts' protest base being stationed nearby.

However, he says Acer encouraged shoppers to visit alternative outlets, such as IT Mall, Zeer Rangsit, Future Park and Seacon Square, during the protests.

Nevertheless, Yang expects the market to report zero growth in the second quarter, because although Acer has still enjoyed 20 percent growth year-on-year compared with 2009, overall IT spending will have reduced.

However, he is confident that the IT retail industry should start to show signs of recovery as soon as next month, because notebooks and PCs have become an essential part of everyday life,.

Takon Niyomthai, Toshiba Thailand country manager of IT Business Division, said one of the IT retail chains which owns several shops, including the Toshiba store which was located at Central World, was most affected and Toshiba has pledged to help to relief efforts.

Meanwhile, Prasert Charoonpaisal, general manager, Personal Systems Group (PSG), Hewlett Packard (Thailand) said the company will consider helping its dealers on case-by-case basis, including promotions at major exhibitions.

"The damage [to the industry] caused by the protest damages around Bangkok's business districts may cost 1 billion baht," he said.


iStudio escapes the fire

Narong Intanate, a shareholder in iStudio by Copperwired, said the company had already moved all Apple products out of its Central World branch - the largest in Thailand - before the mall was torched last Wednesday.

"If we hadn't moved the inventory, it may have cost us around 50 million baht [if the stock had still been in Central World when it was burned]," said Narong.

He added that the company is in discussions with IT vendors to relieve the problems faced by resellers in the affected area, which covers more thousand shops, such as extending payment dates.

Normally, Bangkok IT retail business value accounts for around half of overall consumer IT spending, so the impact on IT retail in the business district may reduce overall consumer IT spending by as much as 25 percent.

However, there is optimism for the industry if the Government can regain control by the third quarter.

At this time, the country has lost a lot of confidence from new foreign investment projects, with Indonesia, Malaysia, Vietnam and the Philippines now looking like attractive alternatives.

Nakrop Niamnamtham, Managing Director of nForce Security Systems AP, supplier of advanced information security solutions which was headquartered at Central World, said the company has to revise its business target this year because around 85 percent of its revenue came from Bangkok.

He also sees some corporate customers delay buying decisions by two or three months.

One major investor to show cold feet has been a South Korean partner in a digital assembly factory which has continually postponed committing to a joint investment since April last year.


Sales at Pantip drop 30-50 percent

Wisanu Wangwisut, managing director of Thipattana Arcade, owner of Pantip Plaza, Pratunam and Digital Gateway at Siam Square, said there are 600 retail shops in Pantip and 60 shops at Digital Gateway, both of which were affected by the protests.

During the unrest, Pantip sales dropped by 30-50 percent, while the entire building was closed for the latter half of last week, following Wednesday's widespread arson attacks.

There are plans to encourage consumers to return with sales promotions in June, and the centre may temporarily waive rental fees for vendors.

Ekachai Sirijirapatana, president of IT City, said the second quarter may be the worst period in Bangkok IT spending, and so the company expects zero growth in this period. Expectations were originally for more than 10 percent growth.

However, Eakchai believes if Government can control the situation, there will be a return to normal spending habits in the third quarter.

IT City will run its "Big Thank You" sale until mid June in an attempt to reboot consumer spending, and will press ahead with plans to expand to three more branches upcountry in the second half of this year.

Accharas Ouaysinprasert, managing director, Intel Microelectronics (Thailand), said the industry can only hope the country and economy can return to normalcy as soon as possible

Next month's Commart show should offer key indicators as to the level of consumer confidence.

Meanwhile, Microsoft (Thailand) managing director Patama Chantarak said: "MS will work closely with any partners who have been impacted to help them recover as quickly as possible.

"At this time, it is too soon to provide a full evaluation of the situation. However, MS continues to be committed to investing in Thailand and has long considered the kingdom to have a good IT structure and firm IT spending potential."



ที่มา: bangkokpost.com