Hi-Q launches Asean expansion in Laos

Hi-Q launches Asean expansion in Laos

Food producer signs deal with distributor

Vientiane: Hi-Q Food Products Co, the Thai maker of Roza and Hi-Q products, has teamed up with distribution firm DKSH Co in a move aimed at tapping the Asean market, starting with Laos.

Developing brand awareness will be crucial, says Mr Kitinon.

Hi-Q signed an agreement on Dec 10 with DKSH, which covers not only Laos but also Myanmar, Vietnam, Cambodia and Malaysia.

"Prior to the distribution agreement, most Hi-Q products entered the Laotian market through border trade or local partners," said Hi-Q general manager Kitinon Wangpattanamongkol.

"The problem is that local partners have limited distribution capacity outside major cities and limited access to accurate sales information. With the upcoming Asean Economic Community (AEC), it is crucial to find an official partner to distribute our products."

The partnership will allows Hi-Q to access up-to-date information on sales in all countries and a logistics system that allows access to new markets not limited to major cities.

"We need to create brand awareness before the AEC starts because brand loyalty will start to play a less prominent role due to increased direct marketing from other regional companies," said Mr Kitinon.

Hi-Q products will initially focus on traditional retail outlets, which make up 90% of the market, before expanding into modern trade.

Sales revenue from the countries Myanmar, Laos, Cambodia and Vietnam this year is expected to reach 200 million baht.

"Myanmar is a new market, so whoever enters the market early will reap the most benefits. Cambodia and Laos are relatively mature markets where the majority of the competition is from other Thai brands," Mr Kitinon said.

Sukhum Jitrasawad, general manager for consumer goods at DKSH Laos, said his subsidiary will initially focus on 625 pho (Vietnamese noodle soup) kiosks in seven provinces including Vientiane and Luang Prabang.

However, Mr Kitinon said a key challenge in doing business in the neighbouring country is how to keep prices of products on a par with those in Thailand. Ideally, prices in Laos should not be more than 10% above Thai prices.

But Mr Kitinon remains confident about business prospects, citing the good reputation of Thai products and consumers' confidence. Hi-Q Sriracha chilli sauce is the current market leader in Laos.

Hi-Q achieved 2.7 billion baht in sales revenue last year, an increase of 15% from 2012.

Mr Kitinon said sales will likely register double-digit growth this year.

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