Taokaenoi bets on Chinese snack attack
Poor market sentiment caused by Covid-19 is leading Taokaenoi Food & Marketing Plc (TKN), a seaweed snack company, to ramp up its expansion in China to boost sales in the second half this year.
Itthipat Peeradechapan, the chief executive, said the company appointed a new Chinese distributor for its Tao Kae Noi snacks earlier this month for both the traditional and e-commerce channel.
An existing distributor, Top Orion Corporation, still handles Tao Kae Noi snacks in modern retail outlets, he said.
The name of the new Chinese distributor was not disclosed.
Jirapong Suntipiromkul, the deputy managing director, said Tao Kae Noi snacks sold well among Chinese customers even before the pandemic, which damaged the company's sales.
"Because of travel restrictions following outbreaks, we cannot send our team to provide support," Mr Jirapong said.
"The economic situation in China is starting to recover and we believe it is the right time to expand the business there in the second half this year."
Taokaenoi's sales fell to almost 4 billion baht in 2020 from 5.29 billion the year before. Of the total, 40% of sales were from the domestic market, 40% from China and 20% from other regions including Asia, Europe and the US.
With the new distributor, the company expects monthly sales of Tao Kae Noi snacks in China in the second half of this year to rebound to 130-150 containers (worth about 800,000-900,000 baht per container), on par with 2019 levels, he said.
"The spending power of Chinese customers has gradually improved because of improvements in the pandemic situation there, unlike in Thailand where the news regarding infections and fatalities keeps getting worse," Mr Jirapong said.
In addition to the new distributor, the company is considering a separate business unit of Taokaenoi in China to focus on that market, he said.
Top executives of Taokaenoi will be appointed soon to take care of Chinese operations, while new products will be launched to fit each distribution channel in China, said Mr Jirapong.
For the domestic market, he said snack sales in Thailand remain in the doldrums because of Covid-19.
"The spending power of Thai consumers has not returned to normal because people are still worried about the high number of infections," said Mr Jirapong.
"We hope the situation will improve after more people are vaccinated in the second half of this year."