Inside ASEAN⁺

Issue 58

 
 

Tharaphu Décor has exploited its 20-year expertise in the teak industry to diversify its business portfolio into other fast growing sectors.

“My father imported teak wood from Myanmar and later the company was granted the concession for the teak business in Myanmar,” says Tharaphu Décor’s director, Apiwitt Phongsphetrarat.

Tharaphu Décor opened a factory in Yangon 13 years ago to process wood for export. Around 75% of its processed teak is exported to Europe and the US while 20% is sent to Thailand, with the rest shared around other countries.

“Our expertise in teak processing and marketing is the company’s strength as we can create the highest value and benefit from the limited supply of the raw material. Our consumers represent a niche market because teak is considered a specialty. Tharaphu Décor truly understands what our consumers are looking for and we have good and strong relationships with them,” says Phongsphetrarat.

However, as Myanmar has opened up to foreign investment in recent years, the company has expanded its business into other sectors including construction, media, telecommunications, logistics and healthcare.

“These industries are interesting and have high growth potential. Now, we provide comprehensive services for construction, logistics and distribution. Telecommunications is a vital business,” he says. “There is also a strong demand for healthcare because Myanmar still lacks the proper facilities and skilled healthcare human resources.” Tharaphu Décor has a franchise to operate leading Thai aesthetic beauty centre, Nitipon Clinic in Myanmar.

Phongsphetrarat believes that all these sectors will grow continually over the next 10 to 20 years. Although Myanmar’s laws, regulations and bureaucracy can present a challenge for foreign businesses, Myanmar’s government has attempted to create a more investor-friendly environment.

Data from Myanmar’s Directorate of Investment and Company Administration shows that foreign direct investment (FDI) during the 2015-2016 fiscal year, totalled US$9.4 billion, spread over 217 projects. The oil and gas sector attracted the biggest investment, followed by transport, communications and manufacturing.

“You must go to the field, observe and assess the market size and its growth potential,” Phongsphetrarat advises potential investors to Myanmar. “The initial investment cost is quite high but I ensure you that the budget for creating your brand awareness in Myanmar now is cheaper than what you will have to spend in the next three to five years.”

For more information, please visit www.sesiafurniture.com or contact Phongsphetrarat at This email address is being protected from spambots. You need JavaScript enabled to view it.

Words by Somhatai Mosika

 

 

Issue 57

An experienced Thai chef is teaching local Chinese how to cook authentic Thai dishes.

“Thai food is very popular in China because Chinese tourists come to Thailand and try it and really love it,” says Wanasnan Kanokpattanagkul, the chief executive officer at the Aiyara Center, adding that tom yum goong is one of the most popular dishes. This is a major factor behind China being a potential boom market for launching Thai restaurants.

According to data gathered by Kanokpattanangkul, as of July 2015, there were 569 Thai restaurants in China, of which 91 were in Beijing, 157 in Shanghai and 61 in Guangzhou, with the remainder in other cities. This is just a part of a global phenomenon, with DITP data indicating that in 2015, there were 14,908 Thai restaurants overseas including 3,022 restaurants in Asia.

However, as of March 2016, there were only 1,301 restaurants bearing the Thai Select brand, which certifies the authenticity of Thai cuisine.

The high demand for authentic Thai food in China has inspired Kanokpattanagkul to offer a Thai cookery course at the Sichuan Tourism University to teach Chinese people how to cook Thai food. Launched in 2012, the 144-hour class is divided into two main sections – 96 hours about cooking skills and restaurant management and investment, an the other 48 hours on basic Thai language and culture.

“I told my students from the first day that if they want to join the class, they must be on time, be happy and have fun when they learn and cook,” she explains. “They should be able to communicate in English because the teaching is in English.”

To complete the course, all students must create innovative dishes using Thai ingredients and spices.

“Thai taste is the key for the class, students learn how to make different flavours by using Thai seasonings and ingredients such as fish sauce and shrimp paste for a salty flavour,” she says. “We teach them to cook 15 recipes including som tum or papaya salad and tom yum. Students learn Thai cooking skills and understand the concept of Thai food to cook authentic Thai dishes, but later they should practice and use their skills and creativity to make their own new dishes.”

Kanokpattanangkul also offer a consultancy service for people who want to open Thai restaurants in China, as well as having her own restaurants in the country.

“Thai restaurants are booming and there is still huge room in the market,” she says. “If you want to open a restaurant, first of all, you must consider the rental cost in the target location and food costs. You should not open too big restaurant, around 300-350sqm is recommended.”

Kanokpattanangkul sees a brighter opportunity for Thai restaurant in this market, and she hopes that in the next 20 years all Thai restaurant owners in China may be her students.

For more information, please add Line: 0818404460 and We Chat: Wanasanan1367873350
Photo courtesy of Aiyara Center

Words by Somhatai Mosika

 

 

Issue 55

The online market is seeing a massive surge that allows Thai businesses to increase their custom base across the ASEAN region.

Regardless of what occurs on international markets, e-commerce is growing each year. A Frost and Sullivan survey carried out in July 2014 predicted that e-commerce in Singapore, Malaysia, Thailand, Indonesia, Philippines and Vietnam will experience annual growth of US$34.5 billion (1.1 trillion baht) or 37.6% from 2013 to 2018.

The Electronic Transactions Development Agency (ETDA) supports this claim. It says that e-commerce sales in 2015 is expected to reach US$57.3 billion (2 trillion baht), a growth of 3.65% on the previous year.

“Although the offline economy has declined, e-commerce has never declined,” says Professor Dr. Jinjuta Issariyapat, Special Advisor for e-commerce. “In contrast, it has increased continually.”

Dr. Issariyapat explains that the nature of e-commerce is developing rapidly.

“It’s not only online shopping, but it is also a tool to combine online and offline trading together (‘omni-commerce’),” she says. “This helps traditional offline trading be more convenient and efficient. Moreover, social media or social commerce is also used to boost sales.”

According to Dr. Issariyapat, e-commerce in ASEAN is most developed in Singapore and Malaysia where customers buy products and pay online via credit card.

“Some other [ASEAN] countries mostly use e-commerce to view products as online catalogues, then return to use offline trade channels to buy products,” she says. “Overall, ASEAN people are starting to buy items online more and more.”

Currently in ASEAN, IT equipment, fashion items, cosmetics and dietary supplements are popular online goods, however Dr. Issariyapat believes there is great scope for expansion.

“The future for the ASEAN market lies in service businesses such as Grab Taxi, as well as outsourcing for technicians, housekeepers or healthcare staff because ASEAN countries are facing a problem with getting service staff,” she says. “Start-up companies play a significant role in this type of business.”

Despite closer regional cooperation in cross-border e-commerce, Dr. Issariyapat believes that cross-border taxation, laws and regulations present obstacles to e-commerce that need to be resolved.

“If these limitations can be solved, I believe that e-commerce in this region will grow,” she says. “Products from Thailand that CLMV (Cambodia, Laos, Myanmar and Vietnam) countries consider as premium will certainly go well. It will not only add value to our country, but also give an opportunity for Thai SMEs to enter international markets.”

For more information, please visit: www.etda.or.th, www.frost.com

Words by: Patcharee Taedangpetch

 

 

Issue 56

A Thai pioneer reveals the secret to business success in this fast growing ASEAN economy.

Myanmar may be a budding potential market for many foreign investors, but it is a second home for Kich Aungvitulsatit, the managing director of Excellent United International, the exclusive distributor of 14 popular Thai and Japanese consumer product brands in this developing country.

Aungvitulsatit entered the Myanmar market in 1990 by distributing Red Bull energy drink and the canned fish in tomato sauceThree Lady Cooks. Now his company distributes 14 brands in total such as Thai energy drinkSponsor, Singhasoda water, Japanese mosquito repellentARS, and Thai herbal toothpaste and personal care productsTwin Lotus.

“Thai products are popular among Myanmar people because of their high quality at an affordable price,” he says. “However, Thai businesses should not be overconfident because competitors are also improving their product quality, and now some of their products are a similar quality to Thai products.”

Currently, the company has offices in Yangon, Mandalay and Myawaddy with about 150 staff including 12 Thais. The company directly distributes products through supermarkets, convenience stores and shops in Yangon and nearby towns, and it appoints sub-distributors to do likewise in other provinces. Aungvitulsatit targets having 30 sub-distributors and more than 300 supermarkets and convenience stores within his distribution network by 2017.

“Myanmar has a high demand for consumer products, construction materials, machinery for the agricultural sector, fertilisers, insecticides and seeds,” he adds. “Although Myanmar is a land of great opportunities, some factors including the poor logistics infrastructure, costly land and shortage of skilled labour are big challenges for doing business in the country.”

Data from Thailand’s Ministry of Commerce shows that Myanmar is Thailand’s 18th largest trading partner. In 2015, trade between the two countries was registered at US$7.74 billion, of which US$4.17 billion was in exports from Thailand to Myanmar. Major export products include fuel, beverages, machinery, cement, steel and steel products, chemicals, automotives and automotive parts, and consumer products.

To tap this frontier market, Aungvitulsatit advises companies comply with the country’s rules and regulations, and learn the Myanmar culture to understand consumers’ behaviour and lifestyles. “Product demonstration is the best method to create brand awareness in Myanmar. Marketers should focus on below the line marketing activities.” he suggests.

Aungvitulsatit believes that in the next 10 years, Myanmar will have a better business environment, with effective laws and more affordable land, making it the perfect time to enter the market. However, he advises caution for anyone planning to enter the market now.

“You must be determined, patient, work hard and never give up before achieving your goal,” he says. “Moreover, you should help develop the areas where you are doing business. When you have any doubts, seek advice from existing foreign investors in the market.”

For more information, please visit www.euithailand.com

Words by Somhatai Mosika 

 

Issue 54

With its vast business expertise and strong regional network, V-Serve aims to become a leader in the logistics market.

The establishment of the ASEAN Economic Community (AEC) as a single market at the end of 2015 has benefited many companies in the region, especially those involved in logistics. Tanit Sorat believes that V-Serve is ideally situated to benefit from this growth.

“V-Serve is going to become a leading cross-border logistics provider in ASEAN,” says the president of V-Serve Group.

Since its inception in 1980, V-Serve has developed from a single shipping company into a group providing integrated logistics services from warehousing, to product distribution, customs clearance and transportation.

According to Sorat, the company has around 700 clients, mainly in the automotive, electronics, chemical and steel industries, most of whom are Japanese. The company has both a Japanese and Myanmar desk with native speakers that provide customers with advice on trade, investment and logistics.

“We have native speakers to serve our foreign customers because we believe they know how to offer the best service to meet Japanese requirements,” he says, adding that the company also has a 24-hour call centre service in Thai and English so that customers can contact the company at any time.

Sorat believes the AEC has created both opportunities and challenges for logistics companies, but that V-Serve is ready to compete in this expanding market.

Global consulting firm Frost & Sullivan, forecasts Thailand’s logistics industry to grow by 7.5% to US$85.9 billion in 2016. Overall the Asia Pacific region has expanded on average by 7.6% annually from 2011-2016 with a total value of just over US$4 trillion in 2016.

“We are going to see fiercer competition in this industry as many capable foreign logistics providers penetrate the region to acquire a share of this fast growing market,” Sorat says.

However, he is confident that V-Serve’s strengths in innovation, flexibility and providing tailored-made quality services, allied to the expertise of its staff will make it the preferred choice for many clients.

“We offer international standard services at Thai prices,” he says. “V-Serve has strong local partners in ASEAN countries, and we have offices in Myanmar and Penang, Malaysia, as well as in the border areas such as Sadao district in Songkhla to facilitate services between Thailand and neighbouring countries.

For more information, please visit www.v-servelogistics.com

Words by Somhatai Mosika

 

 

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