Aeon plans B6bn Bangkok complex

Aeon plans B6bn Bangkok complex

Aeon expects its planned Bangkok mega shopping complex will compete with Siam Paragon, CentralWorld and The Emporium, says managing director Masamitsu Ikuta.
Aeon expects its planned Bangkok mega shopping complex will compete with Siam Paragon, CentralWorld and The Emporium, says managing director Masamitsu Ikuta.

Aeon (Thailand) is set to compete head on with Central Group and The Mall Group, vowing to develop its first megaproject in central Bangkok as part of a 10-billion-baht investment over the next five years.

Managing director Masamitsu Ikuta said the company would allocate 10 billion baht for new retail development from 2016-20.

Most of it will be used for developing three major retail models in central Bangkok -- MaxValu supermarkets, a megaproject and speciality stores.

Aeon will open 10 MaxValu stores in each of the next five years, taking the number of MaxValu stores in all formats to 130 by 2020.

It will open three MaxValu supermarkets this year with an investment of 50 million baht, while it will spend about 10 million baht to open five MaxValu Tanjai stores.

The company will build its megaproject in Bangkok in the next few years to cash in on the Asean Economic Community, which will draw more foreign tourists to Thailand.

The project will have retail space of 200,000 to 300,000 square metres and require an investment of 6 billion baht.

"The new retail megaproject will have the same image as Aeon in Japan," Mr Ikuta said.

"We want this shopping complex to be able to complete with inner-city retail megaprojects such as Siam Paragon, CentralWorld and The Emporium."

The project is expected to open in 2018. Aeon is looking for a suitable plot of land. It plans to develop about 20 mega shopping complexes in the next 15 years.

The move towards huge projects in Thailand comes after its Japanese parent company recently set a plan to expand its retail business in Asean aggressively between now and 2020.

Aeon plans to open speciality stores for drugs, bicycles, cosmetics and pet food in Thailand. Two speciality store brands will be launched next year.

Three or four branches will be opened for each brand. If it receives a positive response from Thai consumers, the company will open about 20 branches per brand each year.

Some funds for business expansion will come from listing the company on the Stock Exchange of Thailand in 2020.

For its MaxValu supermarkets, the company plans to add more TopValu items, its house brand, to its range to differentiate its stores from other supermarket chains.

TopValu products include shampoo, soap, toothbrushes and canned fish produced by original-equipment manufacturers in Thailand to serve MaxValu stores in this country and for export to Aeon stores in Japan.

The Japanese parent recently chose Thailand as its production base for house brands of T-shirts and socks to serve Thailand and Aeon networks in Cambodia and other Asean members.

Sales from house brands in Thailand are worth 3.45 billion baht, with 150 million generated in Thailand and 3.3 billion from exports.

Mr Ikuta said house brands accounted for up to 3% of the company's sales but would contribute 15% by 2020.

Sales of TopValu brands worldwide are forecast to total ¥5 trillion (1.52 trillion baht) in 2020, up from ¥80 billion annually now.

With its aggressive plans in Thailand, the company expects supermarket sales of Aeon in this country will reach 20 billion baht in 2020, nearly triple last year's sales of 7 billion.

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