The Thai retail market is an oligopoly dominated by the three major groups: CP, Central, and TTC.
The Thai retail market continues to be dominated by the oligopoly of CP, Central Group, and TTC. Central Group owns upscale supermarket chains Tops Market and Central Foodhall. Meanwhile, TTC Group, one of Thailand's largest conglomerates, which includes Thai Beverage (known for brands like "Beer Chang" with the elephant label), invests in hypermarkets like Big C, focusing on wholesale stores. On the other hand, CP Group operates the convenience store chain Seven Eleven with over 12,000 stores and the business-focused cash-and-carry store Makro.
In recent years, industry restructuring through mega M&A deals has led to an accelerating trend of oligopolization.
"In 2020, Tesco, the largest supermarket chain in the UK, sold its stores in Thailand and Malaysia to the giant Thai family conglomerate, Charoen Pokphand Group (commonly known as 'CP Group'), in a deal worth $10.6 billion (over 1 trillion yen). This transaction became the largest M&A deal in Asia for that year.
The following chart lists major M&A deals in the Southeast Asian region in recent years (2012–2018). Among the eight deals listed, Thai companies dominate the top four positions in terms of deal size, showcasing their overwhelming presence. It is noteworthy that two of these deals are outside of Thailand (both in Vietnam). Thai retail conglomerates are steadily establishing their presence not only domestically but also overseas. It's also worth mentioning that the Japanese conglomerate Aeon Group is the only Japanese entity listed, having acquired the Malaysian operations of the French retail giant Carrefour."
For the Thai retail market, where private brand market share is low at 10%, the COVID-19 pandemic serves as a turning point.
In contrast to Europe, the US, and Japan, where private brands (manufacturers' original brands) account for the majority of the market, they are not widely accepted by Thai consumers, with their share of total sales remaining below 10%. This is largely due to the presence of retail conglomerates like CP with overwhelming distribution channels, and further consolidation could be detrimental for manufacturers.
The impact on consumers cannot be ignored. There are voices calling for administrative or policy measures, including from the Competition Commission, but bold actions have yet to be taken. Amid the significant financial impact on retail companies following the COVID-19 pandemic and lockdowns, there is a high possibility of further consolidation among major players and the accompanying oligopoly.
On the other hand, for manufacturers, establishing new touchpoints with consumers through the rapidly expanding e-commerce channels during the 'stay-at-home' period could lead to improved profitability through business model transformation. The future trends are eagerly anticipated.
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