Made in Thailand: Our golden opportunity
When travelling around Southeast Asia, especially in the countries that are our close neighbours along the Mekong, Thai people can’t help but notice the popularity of familiar Thai brands.
A large variety of Thai consumer goods are to be found on the shelves of the mom-and-pop stores spread right across the region and in some countries, such as Myanmar, they dominate the shelves, accounting for up to 70% of the goods on sale.
Laos is another country where “Made in Thailand” products are everywhere to be found and they are also very popular in countries such as Vietnam and Cambodia where Thai products are considered premium goods.
So why are Thai goods so popular? In my view, the most important reason is Thailand’s high reputation for quality (indeed many Thai producers are facing a problem of having their products copied.)
We must thank the discerning Thai shopper for the enduring quality and popularity of Thai products. The importance of having a sophisticated local market was a key factor identified by the competitiveness guru Michael Porter as to why countries have a comparative advantage in certain products.
For example, Switzerland, which isn’t a cocoa producer, has become a world leader in fine chocolate as chocolate lovers have forced producers to continually improve their products. In Thailand, not only do we have a nation of enthusiastic shoppers, but our local market is highly competitive. These have provided important stimulants to Thai entrepreneurs who must produce popular and high-quality products to compete.
Another reason for the high quality of Thai products is that our safety regulations and quality standards are well developed and this has given us a head start over our neighbours. Our more advanced stage of development has also led to the development of scale and quality in our production processes.
Furthermore, Thai television is easily accessible to people in Laos, Cambodia and Myanmar and the channels carry advertisements for Thai products which stimulates local demand.
Unfortunately, although many large Thai companies are vigorously trading with neighbouring countries, so far few Thai SMEs are doing so. A recent study by Bangkok University found that more than 90% of Thai entrepreneurs have no international customers.
How then should Thai entrepreneurs start if they want to market internationally, starting with our neighbours? The key to penetrating such markets is relationships, good partners, distributors and sales teams, supported by effective brand-building both in the mass media and at point of sale.
One Thai company that has entered the retail scene in Vietnam and other CLMV countries points out that marketing through the mass media is a very useful tool and it is much cheaper than in Thailand.
Another important factor today, which everyone needs to face up to, is the power of the internet. Some countries in Southeast Asia lag well behind in terms of industrial development but, thanks to their youthful populations, they are leapfrogging into the technology era using social media, especially with mobile devices.
People in Thailand and Vietnam, which have been active online users for many years, spend the most time online in the region; however, countries such as Laos, Myanmar and Cambodia are growing their internet usage very fast and savvy businesses are now using social media channels such as Facebook to reach new customers.
Given the popularity of Made in Thailand and the rapid economic and business development taking place in our neighbouring countries, Thai companies face the opportunity of a lifetime. I hope they take it!
Virasak Sutanthavibul is a Senior Executive Vice-president with Bangkok Bank. Questions, comments or suggestions can be sent to email@example.com. For more in this series please visit www.bangkokbank.com