Joining the Dots

Issue 65

A newly-established trade center in Guangdong is increasing new business opportunities for Thai exporters looking to penetrate the Chinese market.

China’s huge market is growing both online and offline, with Goldman Sachs expecting the country’s FMCG (fast-moving consumer goods) market to reach US$2 trillion in 2020. To boost exports to China, the Thai government is working with private companies to create new sales channels for Thai brands.

With this goal, the Thailand Smart Trade Center (TSTC) was formally launched on May 1 after opening its doors to Thai exporters and Chinese buyers in January. The center is a collaboration between the public and private sector including the DITP, the Ministry of Commerce (MoC), the Tourism Authority of Thailand, Thai Airways, Kasikorn Bank and Ciphona Group.

Situated in Shunde District, Foshan, Guangdong, China, TSTC is separated into different zones such as food, cosmetics, agricultural products, furniture and special exhibitions.
“TSTC is not a distributor, instead we are a trade center where we assist Thai exporters to enter the Chinese market with a focus on increasing B2B sales channels and creating business opportunities for Thai exporters both online and offline,” says Yongkit Thamphatanaporn, executive director of TSTC.

The center provides a platform for Thai exporters to display their products so that Chinese buyers can purchase small quantities before deciding whether to place larger orders. Moreover, TSTC plays an important role in connecting Thai exporters to hypermarkets and supermarkets in China, and also with Chinese distributors, wholesalers and traders through business matching activities.

“The key factors to success, when entering China, are that exporters should have a warehouse with ready to ship products, a logistics team that can deliver products to buyers in a timely manner, and a Chinese-speaking customer service team,” says Thamphatanaporn.

Moreover, with online penetration in China rising rapidly from 5% to 13% last year, according to Goldman Sach, Thai exporters should also look to online channels.

In line with the MoC’s policy of transforming SMEs into smart enterprises thus increasing their competitiveness on global markets, one of TSTC’s highlights is the Thailand Trust Mark, or T/Mark, exhibition, which showcases internationally recognised Thai brands. Considered ‘Thai Brand Heroes’ by the MoC, TSTC has a special area for these brands such as Panpuri, Naraya, and Blue Elephant. More than 30 other T/mark-awarded Thai brands ranging from consumer goods and houseware to home décor and food are also featured in this zone.
Thamphatanaporn believes the future of Thai exports to China is becoming brighter with the aid of TSTC.

“Currently we’re focusing on creating more awareness for the center and bringing in buyers for TSTC, such as department stores in China. One of the most popular products now is freeze-dried fruit,” he says.

The Thailand Smart Trade Center (TSTC) is located at 38 Kaka Plaza, Nanguo XI Road, Daliang, Shunde District, Foshan, Guangdong, China.

For more information, visit www.facebook.com/thailandsmarttradecenter
Words by Pimsirinuch Borsub

 

Issue 63

With rich natural resources and its strategic location, Myanmar is an attractive destination for foreign investors from around the world including Thailand.

Several sectors in Myanmar’s burgeoning economy will demonstrate significant growth over the next few years, predicts a leading member of the Thai-Myanmar business community.

“Infrastructure, labour-intensive manufacturing, agricultural and fisheries and their processed products, tourism and telecommunications, and application development will be fast-growing industries in the next five years,” Nattawin Phongsphetrarat, vice president of the Thai Business Association of Myanmar (TBAM), says.

“Myanmar’s government has promoted investment in these sectors because they are crucial for the country’s development and these are promising opportunities for all foreign investors.”

Data from the Myanmar Investment Commission shows that total foreign investment in the country reached US$5.8 billion during the period between April 1, 2016 and January 31, 2017 while the government has set a target of US$6 billion for the current fiscal year, up to March 31. The top sectors include transport and telecoms, manufacturing, real estate and energy.

However, Phongsphetrarat believes that small and medium enterprise with less than US$8 million (300 million baht) of total annual revenue should better focus on cross-border trade. “Selling products is the best option for small businesses,” he says. “They can distribute them at the border areas between Thailand and Myanmar or export products to Yangon or Mandalay.”

As purchasing power in Myanmar is still limited, setting the right price is key. “Producers have to offer products in smaller sizes and cheaper because consumers cannot afford higher prices,” Phongsphetrarat explains. “Online tools such as Facebook and Viber influence urban consumer behaviour and their purchasing decision while consumers in rural areas prefer traditional markets.”

Moreover, businesses are advised to organise below-the-line marketing activities such as product demonstrations and testing to educate consumers and allow them to have direct experience with the products. He also believes it’s important to choose the right local partner and test the water before fully committing to one product.

“Business partners play a crucial role in the business’s success or failure. Foreign businesses can form a cluster before entering Myanmar, they can share offices and other resources which help them cut costs and penetrate the market faster and more effectively,” he says. “You should study the market thoroughly by visiting Myanmar to observe the market by yourself.”

TBAM is ready to assist companies who want to expand their business into Myanmar. Established in 1997, the association provides useful business and investment information and advice to both government and private sectors. It also helps strengthen relationships between Thailand’s businesses and other chambers of commerce in Myanmar.

“TBAM has worked closely with Thai government agencies including the DITP,” he says. “We have organised seminars in Myanmar almost every month and hosted meetings between Thai entrepreneurs and Myanmar representatives in particular government agencies and private organisations to enhance their understanding about business opportunities and challenges as well as promoting Thai businesses in Myanmar.”

Phongsphetrarat believes that Myanmar’s new investment law will provide better benefits to foreign investors and ease investment restrictions.

“There’s very good opportunities for Thai investors to expand their business in Myanmar as we have the advantage of geographic proximity and similar consumer behaviour,” he says. They [Myanmar consumers] also love Thai products and services. If you miss this great chance, you could not find something like this again.”

For more information, visit www.tbam1997.com

Words by Somhatai Mosika

 

Issue 58

 
 

With 160 years of diplomatic relations, Thailand and France have long been good friends, with the promise of many more years cooperation to come.

“[Thailand’s] culture and history is very rich. I love Thai cuisine, the people, the language, and I love the way of life in Thailand,” says Gilles Garachon, French Ambassador to Thailand who started his second post in the kingdom in October 2015, having spent an earlier term here between 1999 and 2003.

“For us, Thailand has been a very long-standing partner and friend,” said Garachon. “Thailand exports a lot of electronic and optical equipment to France along with food products and garments, while France is a major exporter of transport equipment such as aircrafts, helicopters and satellites.”

In 2015, Thai exports to France were worth €2.6 billion while French exports to Thailand totaled €1.73 billion. According to the French embassy, there are 250 French companies in Thailand, employing a combined 64,000 people mostly in industries such as automotives, pharmaceuticals and energy.

Garachon believes that innovation will be a key factor for countries staying competitive in the world market.

“In the future we want to focus on investing in many sectors [in Thailand], like manufacturing, luxury products, food, but also on innovation. Both countries are facing the situation where we have to single out products by innovation, so I think both countries have to work together to innovate in many sectors, like manufacturing, aircrafts, food and cosmetics – in which Thailand is very good.”

Examples of cooperation between the two countries include Thai sugar manufacturer Mitr Phol which is working with a French company to innovate its products, while paper manufacturer Double A is investing in a paper plant in France.
“The two key strengths for Thai trade with France are, firstly, Thailand is at the heart of ASEAN and secondly, the Thai economy shows a potential for diversified growth – agriculture and food processing are strong, while services are efficient and industry is competitive,” says Garachon.

The ambassador also sees Thailand a “natural hub” for the region, believing that much can be done to bolster commerce such as opening more border points to trade, and developing railway links with neighbouring countries.
“A deep collaboration with Cambodia, Laos, Myanmar and Vietnam would be in the interests of the entire region, not only Thailand,” says Garachon. “For us, this is a very dynamic region and Thailand is at its core, playing the role of the leader in Southeast Asia. That’s why we want to increase our relations with Thailand.”

The French Embassy organises several events to stimulate trade between the two countries, including ‘Invest in France’ in October. Held jointly with the Joint Standing Committee of Thailand and the Franco-Thai Chamber of Commerce, participants will discuss business opportunities between the two countries.

“As the French ambassador, I want to create positive communication between both countries to work more closely together,” he says. “We’re already present here, but there is still plenty of room to do much better.”

Words by Pimsirinuch Borsub 

 

 

Issue 60

With the establishment of the ASEAN Economic Community (AEC), Thai investors are looking to expand their businesses to fast-developing neighbouring countries, such as Cambodia.

Thai and foreign investors alike are keen to take part in Cambodia’s growing economy. As Thailand’s 14th largest exporting country, Cambodia received US$3.574 billion of Thai exports in the first nine months of 2016. While large Thai corporations, from CP to PTT and SCG have invested in manufacturing bases in Cambodia, the service sector is also growing, especially in hotels, hospitals, television, insurance and banking.

Oranooch Pakarat, President of the Thai Business Council of Cambodia (TBCC), was one of the first Thai businesspeople to do business in Cambodia, in 1986, in air freight and travel. Founded in 1999, the TBCC holds year-round activities, providing information and guidance to Thai investors interested in doing business or investing in Cambodia while also serving as a communication channel between the embassy and Thai people residing in Cambodia.

“The TBCC tries to match visitors from Thailand with members in similar businesses in Cambodia to form partnerships,” she says. With her three decades of experience, Pakarat also runs Bangkok-based Intra Mekong company, which specialises in logistics, travel and education in Cambodia and other ASEAN countries.

Pakarat reveals that Thais are interested in investing and trading in Cambodia for several reasons including the availability of young workers and abundance natural resources.

“Cambodians love Thai products, moreover, the law in Cambodia is open to foreign investors who are able to own businesses in Cambodia. Another advantage of Cambodia is that the US dollar, Thai baht and Cambodian riel are used locally,” she says. “Labour costs are still low, with more than 60% of the population in the working age. Also, tourist destinations in Cambodia enable a steady cash flow so the local population has some purchasing power.”

Thailand also has the advantage of having a long border with Cambodia and the ability to use AEC privileges in cross-country trading.

“My advice to those interested in investing in Cambodia is that you have to change your mindset: Cambodia is changing rapidly. Parents of the new generation of Cambodians are investing in their children, sending them to universities abroad, so they get the best education,” says Pakarat. “Many countries are keen on investing in Cambodia, from China, Japan and Vietnam to South Korea.”

The Thai government has been continuously supporting international trade between Thailand and Cambodia. The Department of International Trade Promotion has held ongoing trade promotional activities in Phnom Penh while the Department of Business Development brought Thai franchise owners to seek partners in Cambodia in 2016.

However, Pakarat insists that entrepreneurs should not be afraid to expand their businesses alone.
“If you want to start a business overseas, you can also do it without waiting for the government’s help. Make yourself ready, because the more prepared you are, the higher your chance of success.”

For more information, visit www.tbcccambodia.org
Words by Pimsirinuch Borsub

 

 

Tags: ASEAN | Cambodia | Export | TBCC

Issue 57

With annual worldwide business worth approximately US$1 trillion, halal food and related businesses are growing at a remarkable speed.

The halal food business is expanding rapidly worldwide. According to a report published by the World Halal Forum, global revenue from halal food and beverages was approximately US$1.4 trillion in 2015 and is expected to reach US$ 2.47 trillion by 2018.

Held from July 29 to 31, the Thai-Muslim Trade Association (TMTA), Central World and the embassies of over 10 Islamic nations in Thailand jointly organised the World Halal Fest by TMTA with the aim to increase exposure for the halal product market.

“The halal business is international, especially halal food, which is not only food products prepared and processed in accordance with the requirements of Islam, but it is also nutritious, wholesome and good for everyone. So you first have to change the perception that halal food is only for Muslims,” said Surin Pitsuwan, former secretary-general of ASEAN, delivering the event’s opening speech and emphasising the importance of halal food for both the Muslim community and the world.

“Halal food businesses are worth US$175 billion in Central and South Asia, US$93 billion in Southeast Asia, US$5 billion in China, US$63 billion in Europe, and US$14 billion in North America,” Pitsuwan added. “In the US, there are 86,000 products which are kosher according to the Jewish community. However, the Jewish community consumes only 15% of that, while 16% [of kosher products] are consumed by Muslims in North America. That is very interesting and very telling.”

To fill the gap in the world market, Thai halal food producers are now aware of the halal certification needed to increase exports of halal food from Thailand.

“The halal sign for all products from Thailand must be credible, recognised and accepted not only by Muslim consumers, but also considered nutritious and healthy by the Thai people, the Southeast Asian region and the world,” Pitsuwan said.

Currently, the Thai government places great importance on the development of the halal food industry. For instance, Chulalongkorn University has a Halal Science Center with laboratories for halal food innovation and certification.

“Moreover, halal businesses can help with tourism, especially in wellness and medical tourism,” says Pitsuwan. “Thai companies are also seeking partners in Singapore and Malaysia to facilitate the exportation of halal products, as Thailand is a leader in quality halal food production.”

Organisers of the event are confident of the tradeshow’s success and the potential of halal companies.

“One of the main missions of the Thai-Muslim Trade Association is to promote and encourage Muslim businesspeople in Thailand to raise [the quality of] their products and services to be competitive on an international level,” says Adul Wongsangiam, president of the TMTA. “We believe that this fair is a very important first step in opening more opportunities for our members and Halal businesses in Thailand as a whole.”

For more information, visit www.thaimuslimtrade.com

Words by Pimsirinuch Borsub

 

 

Tags: Halal | Food | Muslim | TMTA | Trade | Exports
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