Mid-sized stores reel from turmoil

Mid-sized stores reel from turmoil

At least 100 medium-sized information technology stores will close this year due to the unfavourable economic climate and political impasse.

"IT shops sized over 64 square metres are likely to shut down in the second half of this year as they will not be able to shoulder higher inventory costs due to poor sales,'' said Nath Natnithikarat, chief executive of Advice Holding Group, the operator of the Advice IT franchise.

However, larger IT retail chain stores will survive due to their strong financial health and capacity to diversify into a greater variety of mobile device products.

Mr Nath acknowledged that his eight franchised stores had been already closed down in overlapping locations.

"We posted annual revenue growth of 6% in 2013, a sharp decrease from the 20% initially targeted, due to intensifying political woes and unfavourable economic conditions,'' he said.

Mr Nath said Advice Holding aims revenue growth of 40% to 16 billion baht this year, 90% of which will come from upcountry.

"Telecoms networking equipment on top of cloud storage service platforms and new-generation routers will be our key revenue growth driver this year, thanks to the increasing awareness of data security and the growing popularity of home Wi-Fi and closed-circuit television,'' he said.

The company plans to attract more IT shops in provinces to become franchisees, increasing the number from 220 to 300 branches this year.

He said sales revenue from tablets and smartphones are expected to double to 4 billion baht this year, making up 25% of total revenue, up from 20% in 2013.

Mr Nath also said average notebook prices are projected to rise to 20,000 baht this year, up from 15,000 baht last year, as people increasingly require more functions and features.

Notebooks priced from 12,000-15,000 baht a piece are set to exit the market as tablet sales eat away at the market share of notebooks.

Budget Chinese tablets priced below 3,000 baht will also disappear.

Mr Nath said demand for hybrid tablet computers that combine the features of a tablet and a notebook looks set to become strong after June when tablet makers plan to roll out their duo-mode operating systems combining Android and Windows system in tablets.

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