Despite being spurned as a waste of time by a leading academic, the government is proceeding with plans to modernise traditional grocery stores under a proposed Show-Suay scheme.
Mr Natthawut (left), assuming the role of a shopowner, gestures as he explains the concept of the new scheme on April 2, 2013. It calls for wholesalers to act as mentors helping existing small traditional grocery shops to modernise and empowering them to provide more extensive services.
On April 2, the government through the Commerce Ministry's Business Development Department teamed up with the Thai Retailers and Wholesalers Association (TRWA), eight financial institutions, the Thai Credit Guarantee Corporation, the Metropolitan Waterworks Authority and mobile operators in a concerted effort to develop the country's retail and wholesale operations.
The scheme, initiated by Deputy Commerce Minister Natthawut Saikua, calls for wholesalers to act as mentors helping existing small traditional grocery shops to modernise and empowering them to provide more extensive services.
These could include accepting payments for water, power and telephone bills and insurance premiums and installing water vending machines.
The banks themselves are committed to extending soft loans and charging special fee rates for loans without the need for collateral. A two-year grace period will also be offered.
Ponlakrit Panau of Kasikornbank's Business Marketing Management Department said for lending of a maximum of 5 million baht without collateral, KBank's annual lending rate under the scheme will be 7-8% against the normal 11-12%.
Potential borrowers should have no record of non-performing loans for the past year and must have been in business for more than three years.
TRWA president Somchai Pornrattanacharoen hailed the initiative, saying traditional mom-and-pop shops need to speed up their upgrades and adjust themselves to comply with changing behaviours of Thai shoppers, who now prefer to shop in hypermarkets and other modern trade outlets.
"We've talked with our members, and most are willing to renovate and modernise their shops to make them cleaner and more attractive, but the key stumbling block is funding," he said.
Mr Somchai said that around 300,000 to 400,000 small groceries nationwide turn over a combined 1.4 trillion baht a year.
Mr Natthawut recently floated the idea of changing the name traditional grocery shops, show-huay, to show-suay, which has a more positive meaning in Thai.
He said the term show-huay is a borrowing from the Teochew Chinese dialect, but huay means "bad" in Thai, so the minister wants it changed to suay or "beautiful".
Mr Natthawut's initiative drew an immediate reaction, with academics saying a plan to help traditional grocery shops survive is commendable but not necessary.
Thanavath Phonvichai, vice-president for research at the University of the Thai Chamber of Commerce, suggested the deputy minister would do better to find ways of helping grocery retailers to improve their competitiveness and reduce operating costs.
Small groceries should have better management and a wider variety of products at competitive prices.
About the author
- Writer: Phusadee Arunmas
Position: Business Reporter