Thai-made beverages have been successful in most overseas markets they enter, but occasionally the results can be less than fruitful if the local partner is not a "perfect match" or local regulations impede growth.
Roongchat Boonyarat, director and executive vice-president of sales and marketing, with her father, Malee Sampran chairman Chatchai Boonyarat. PHOTO: PHRAKRIT JUNTAWONG
Malee Sampran Plc, the SET-listed maker of Malee fruit juices and canned fruits, learned a hard lesson several years ago when it had to terminate a distribution contract in China, one of its top three overseas markets.
"The Chinese distributor was huge with many outlets. At that time we thought it was great to have a big partner but later we found that we were so tiny for them, like ants," said Roongchat Boonyarat, director and executive vice-president of sales and marketing.
"Since they had so many products to distribute, they couldn't concentrate [on the small Malee business] and did little to promote our product. So we broke up."
It took Malee two years to find a new partner and recover the business in China, which remains one of the company's top three markets. Altogether, the company exports to 25 countries with exports making up 20% of its annual revenue.
Given the failure with the first Chinese distribution partner, Ms Roongchat said the company learned it was very important to find the right partner to ensure the success in the business.
"We can't do everything by ourselves when it comes to doing business and taking care of the customers overseas, so we have to make sure that we get a partner who shares the same vision with us in doing business," said Ms Roongchat, 28, whose family members are the major shareholders in Malee Sampran.
"We must focus not only on the credentials of the potential partner but also on their passion to develop business together with us."
Protecting the brand is also critical, as Malee learned about 10 years ago in Pakistan, where a local producer brought out a "Meela" brand to cash in on people's familiarity with the Thai products.
"We were very successful in the Pakistan market in terms of sales and market share given the fact that we were among the foreign players pioneering that market, where some had overlooked the opportunity," she recalled.
PHOTO: MALEE SAMPRAN PLC
Unfortunately, copycats entered the picture and sold their goods at cheaper prices. As well, intellectual property rights protection in Pakistan was weak at the time.
"Our brand was registered in that market but violations still occurred because enforcement was not strong. We learned that we should study the law and run the business more carefully," she added.
The company has filed a lawsuit against the copycats for trademark violation but the case is still before the courts.
"We have remained in the Pakistan market but with limited activity and investment because we concluded that no matter how much we invested, it would only benefit those who copied our brand," said Ms Roongchat.
Look forward to the establishment of the Asean Economic Community (AEC), Ms Roongchat said Malee planned to focus more on sales in the 10 Asean markets, together with China.