Slowdown leads TV Direct to shutter 8 shops by year-end
SET-listed TV Direct, a home shopping operator, plans to close down eight of its 33 retail shops nationwide by year-end and another five by June 2020 because of the country's economic slowdown and it is the right time to improve organisational effectiveness.
The company wants the remaining shops to improve their revenue next year via more sales strategies.
Songpol Shanmatkit, chief executive of TV Direct, said the company's sales in the first nine months this year rose 9% from the same period a year earlier.
In 2018, sales grew 16% year-on-year.
Mr Songpol said the consumer-to-consumer format is popular now.
The domestic market's purchasing power has diminished as people are struggling with large debts, both the formal and informal variety, he said.
"The future is hard to predict even though we have confidence in our adopted technology, practical business models and marketing channels," said Mr Songpol.
The company decided to cull some retail shops though many are still performing well because now is the right time to upgrade the organisational structure and management in preparation for upcoming challenges, he said.
"In the era of digital disruption, organisations must be lean and agile to adjust for sustainable growth," said Mr Songpol.
From next year, the TV shopping business is likely to face tougher challenges, including the economic slowdown and new innovative marketing channels driven by artificial intelligence (AI) and data analytics that will accommodate personalisation in the customer experience, he said.
TV Direct now engages in omni-channel or offline-online mixed channels, including digital TV, satellite TV, call centres, direct mail, catalogues, shops, websites, social media and pop-up spaces.
The omni-channel strategy is expected to help TV Direct find the right customer approach and suitable time to launch products, said Mr Songpol.
He said a new business model, called direct-to-consumer (DTC), is expected to gather steam from next year.
The DTC model sees brands approach customers to sell products or services directly, bypassing retailers or e-marketplaces.
The move to DTC could help address existing pain points shouldered by brands or retailers who have to pay for rental space, said Mr Songpol.
Over-reliance on e-marketplaces makes it hard for brands to gain necessary data from their customers, he said.
Businesses are looking to a new, "harmonised" strategy, in which AI and data analytics are used to offer products or content that meet consumer demand, said Mr Songpol.
Some 55% of the Thai population of 69.3 million still shop offline, while another 30% favour shopping online and search for everything they buy on the internet before they purchase.
Another 15% are in between and appear to have the biggest purchasing power.