The Mall Group, the country's second largest retail group, will spend more than 2 billion baht to stimulate consumer spending and boost sales to reach 53 billion baht this year.
The Mall Group executives led by Chamnarn Maytaprechakul (4th left) at a press conference to announce the marketing campaign to celebrate Chinese New Year at its stores, including The Mall, The Emporium and Siam Paragon.
Executive vice-president Chamnarn Maytaprechakul said that even though the economic and political outlooks had improved since last year, people remained cautious about spending.
The group will therefore put more focus on its media spending this year, relocating some advertising and promotional budgets to direct media that have an immediate impact on customer spending, and slashing the budget for mass media.
"The retail atmosphere so far is similar to the situation during the heavy floods in late 2011. People are not really in the mood to shop even though they have money in their pockets due to the falling oil price," he said.
However, sales of The Mall Group in January increased by 6% from the same period last year, higher than average sales growth last year. The growth was driven by sales at Siam Paragon, which rose at a double-digit rate.
Phaibul Kanokvatanawan, The Mall Group's chief executive, said sales at Siam Paragon grew sharply on the back of a resurgence in tourism. Many foreign travellers have returned to Thailand after the political situation stabilised.
However, the number of tourists would rise further if martial law is revoked, he said.
Currently, tourists from Western countries cannot buy travel insurance for their trip to Thailand as foreign insurers cannot provide insurance coverage as martial law is still in place.
Moreover, he said the government should speed up the construction of terminal 2 at Suvarnabhumi airport to handle more tourist arrivals in the future.
However, Mr Chamnarn was worried about shopping sentiment after the recent bomb attack in front of Siam Paragon, the group's flagship department store.
"We hope consumer purchasing power will improve in the second and third quarters of this year after the government starts allocating money for major infrastructure projects," he said.
The group will use digital media to draw more lifestyle customers to its stores. And it will continue marketing activities this year and earmark more money for customised campaigns and apply customer relationship management to understand consumer demand.
This year's marketing budget will also be used to refresh its brand positioning, augmented by two new shopping venues — EmQuartier and EmSphere, which will open in the next couple of years. Space and zoning at each branch of The Mall will be adjusted and more fashion and food brands will be added.
"2015 will be another difficult year for retailers if there is deflation because shopping demand will then decline," said Mr Chamnarn.
The group plans to allocate 100 million baht for its Chinese New Year campaign from Feb 12-25 at The Mall, The Emporium and Siam Paragon.
Kasien Wattanachaowisut, president of the Thai-Chinese Tourism Alliance Association (TCTA), is optimistic that 15,000 to 20,000 Chinese tourists will travel to Thailand every day to celebrate Chinese New Year during Feb 17-26.
It is estimated that Chinese visitors will generate 8 billion to 10 billion baht over the Chinese New Year period.
TCTA said that the Chinese tourism market this year would improve from the year before, especially during the Lunar New Year, which falls on Feb 19. In the festive month alone, some 500,000-600,000 Chinese travellers will visit Thailand and the number for the entire year could be as high as 6 million and generate some 200 billion baht in tourism income, 25% higher than in 2014.
The Mall Group will bring 60 statues of Chinese gods to display at its celebrations. It expects sales of 2.2 billion baht from the Chinese New Year campaign.
Sales of The Mall Group last year grew 2% to 50 billion baht and are expected to rise by 6% to 53 billion baht this year.