Com7, the Bangkok-based IT chain store under the Banana brand, has taken over 44 BKK shops from Bangkok Telecom 999 for 184 million baht in a drive to accelerate its expansion into the mid- and entry-level segments.
"This is our first acquisition for the purpose of pursuing growth," said Sura Khanittaweekul, chief executive of Com7.
The move is a reflection of how medium-sized IT retail chain stores in Thailand are trying to survive the hyper-competitive handset sales market.
Small retail chains are being forced to close their shops because they cannot compete directly with cash-rich large stores.
The process of transferring BKK's shops will begin on Dec 1 and is expected to be completed in the first quarter of 2017, Mr Sura said.
Com7 will operate the acquired 44 stores under the BKK brand, most of which are located in high-density areas. At least 10 BKK shops (out of the 44 acquired stores) compete directly with Com7.
BKK Telecom 999 sold 44 branches out of its 80 shops.
Mr Sura said the acquisition will enable Com7's expansion strategy to grow faster, as the company need not build its own stores, which takes time and planning.
The average size of a BKK shop is 30-70 square metres, while the average size of a Banana shop is 100 sq m.
He said the acquisition of the BKK shops will enable Com7 to penetrated untapped mid- and entry-level markets, with handsets priced below 10,000 baht each.
"Returns on the acquisition can be expected over the next 3-4 years," Mr Sura said.
Most Com7 branches are situated in prime locations in department stores serving premium customers with high purchasing power.
Thailand's smartphone market is quite mature. There is still an extensive demand in the mid-level handset segment in the replacement market.
Com7 aims to expand its retail shops to 500 branches by 2017, up from 365.
In August, Com7 launched bananastore.com to extend its sale channels online to capitalise on new-generation customers who lead the digital lifestyle trend.
"We aim to have 1 billion baht in total sales revenue in 2017," Mr Sura said.
Com7 expects revenue to grow 10% to 17 billion baht this year. Of the total, 35% will come from sales of mobile phones, 30% from computers, 10% from tablets and the rest from accessories.