SET-listed FN Factory Outlet is beefing up its consumer goods distribution business to offset a drop in sales in its outlet business caused by the Covid-19 pandemic.
Thammasak Jittimaporn, the company's chief executive, said the company needs to rejig its business strategy to focus more on consumer goods after customer traffic at FN outlets has dropped by 50% since 2020.
Shortly after the outbreak, Mr Thammasak said the company scaled down the size of 11 FN outlets to 200 square metres from the original 7,000-8,000 sq m. Since the end of last year, it is also selling its products online and via drive-thru as well as offering a cash van service that sells not only FN products but also products from small and medium-sized enterprises.
FN has 15 cash vans and is planning to raise the number to 50 by year-end. The company also plans to have a total of 300-500 cash vans in the next 3-5 years.
In a related development, the company signed a memorandum of understanding last Wednesday with DOD Biotech Plc (DOD), the manufacturer of beauty products, food supplements and beverages, to form a strategic business partnership.
Under the strategic partnership, FN and DOD will co-develop a formula, research and make products based on hemp as the key ingredient to sell both to the domestic market and abroad. The firm is interested in producing three potential product categories comprising skincare, food supplements and beverages.
These three products will be sold via various channels from Facebook, e-commerce, Line, FN application and vans. The product price range is set between 100-1,000 baht per item.
The first skincare product will be launched on the market in the third or fourth quarter of this year. FN Outlet expects its skincare product will generate 10% of the firm's total sales next year.
The company is also interested in food supplements and beverages with hemp ingredients.
"The business value of products that use hemp is relatively large and we aim to gain a 5-10% market share of products related to hemp in the next five years or 500 million-1 billion baht," said Mr Thammasak.