The high level of household debt won't significantly impact Villa Market, according to Villa Market JP Co, the operator of the supermarket chain, as the company targets the high-income segment.
Thailand's household debt-to-GDP ratio stood at 91.3% in the fourth quarter of 2023, according to the National Economic and Social Development Council.
Pisit Poosanakhom, the company's chief executive, said the company believes the high-income segment remains resilient despite the soaring rate of household debt.
Moreover, the increasing number of foreign tourists visiting the country since the end of the pandemic has also boosted the country's economy, he noted.
Referring to the government's planned 10,000-baht digital wallet handout scheme, Mr Pisit said the private sector would await further clarity on the eligibility criteria of the scheme to assess the potential impact on the economy.
The digital wallet scheme targets roughly 50 million Thais aged 16 and above earning no more than 840,000 baht per year or 70,000 baht per month, or those who have less than 500,000 baht in their combined bank accounts, including accounts held with commercial banks and state financial institutions, according to the caretaker Deputy Finance Minister Paopoom Rojanasakul.
Even though Villa Market focuses on the top-tier customer segment, Mr Pisit believes the digital wallet scheme will also slightly improve the company's bottom line.
"The company aspires to participate in the scheme. However, the current eligibility criteria remain unclear for us," Mr Pisit said.
Mr Pisit said the company plans to open three new branches, raising the number of stores this year to 41 from 38.
Two of the new branches will be located in Phuket's Kamala and Choeng Thale sub districts, while another will be located in the Rattanathibet area of Bangkok, he said.
"The investment for the new branches will range from 50-100 million baht per store," he said.
"The company plans to open 4-5 new stores in 2025," Mr Pisit said.
At present, retailers are already struggling in a highly competitive market. One reason for this has been the entry of Chinese online retailer Temu, which has sparked concerns over the influx of cheap Chinese goods.
Mr Pisit said the company would not be affected by the emergence of this platform, as it targets different customer segments
He said the key to survival for the retail industry today is not just online or offline strategies, but the adaptiveness and agility of operators, which plays a vital role in responding to a greater degree of customer sophistication.
Mr Pisit said the company is likely to focus more on market segmentation rather than the nationality of its customers, as some Thai customers may have a similar level of demand as foreign ones.
Moreover, the company is also developing its online platform, and is embracing artificial intelligence capabilities to analyse shoppers' demands, he said.
"The company is trying to integrate both online and offline sales channels, aiming to achieve a seamless shopping experience, and draw younger generations of customers," Mr Pisit said.
Currently, the online channel contributes around 10% of overall transactions, he said.
Amid the competitive retail business landscape, Mr Pisit said the path to the company's success includes agility to adapt to a fast-changing market, knowing the customer and understanding customer preferences.
"My dad always tells me to look at every single detail from the bottom to the top, and all our executives -- including me -- must explore our stores to identify customer needs and get to know them," said Mr Pisit.
He said there is no need for the company to be listed at the moment. And the company is also opting look at other businesses such as food.
The company is considering opening a restaurant or food counter inside branches of Villa Market.
Mr Pisit said the company aims to attract around 1,500-2,000 customers per store per day, which would be similar to last year's performance.
Furthermore, the company aims to achieve 7-8 billion baht in sales this year, up by 10% from 2023, he said.