Bringing the future to Central

Bringing the future to Central

Chief operating officer Nicolo Galante outlines the vision for the retail conglomerate's move to take over e-commerce

People value time differently. Some take ages to make life-changing decisions. Nicolo Galante took only five minutes to accept when he was asked to join Central Group, the retail conglomerate owned by the wealthy Chirathivat family.

Central Group chief operating officer Nicolo Galante has an ambitious three-step plan to bring the group into the digital age.

Now Central Group's chief operating officer, Mr Galante's decision has proven to have changed his own life, as well as Thailand's online landscape.

Mr Nicolo, 51, a former consultant with McKinsey & Co, is utilising over 20 years of experience with commercial strategies in the European retail market to help Central become a market leader both in Thailand and Vietnam's e-commerce sphere in terms of growth and sales.

"We want to be No.1 in terms of sales across channels, competing against giant chains, namely Lazada and Alibaba," he says.

A year before he joined Central Group, his family spent a summer holiday in Thailand for three-and-a-half weeks, driving from Bangkok to Ayutthaya, Chiang Mai and Chiang Rai, then heading south to Koh Samui and Koh Tao, stopping at many beautiful villages, and enjoying themselves thoroughly, says Mr Nicolo.

When he received the job offer last year, he immediately accepted and outlined business strategies for developing Central online through three steps.

The first step is to align everyone with the same vision and strategy and change the organisation in the retail group, which includes appointing a chief technology officer to help bring in all technology to support e-commerce and omni-channels for the group, he says.

The second step is to ensure each store and business unit integrates all omni-channels to improve the customer experience and the third step set is to accelerate and drive Central Group to be the market leader.

Central Group expects to spend more than 10 billion baht to move each of its online business units and will launch major e-commerce initiatives such as major partnerships and joint-ventures.

It will buy some small or medium-sized technology companies and e-commerce companies in Thailand and Southeast Asia to strengthen its online business.

Two years ago, the group bought two online companies under its portfolio, including Zalora, which was renamed "Looksi".

The group recently entered a joint venture with JD.com, China largest retailer and financial technology company to expand e-commerce and fintech service in Thailand with an investment of US$500 million (16.7 billion baht).

Mr Nicolo says that Central Group wants to buy more small and medium-sized enterprises in the future as it wants to progress at a fast pace.

"Instead of putting our effort into developing everything in-house, we decided to seek strong strategic partners in some areas in order to learn from people with different talents, different cultures and skills," he says.

He believes that there is huge business potential in Thailand's e-commerce market because the market is still very small compared to Western countries.

People still love to shop at malls, but this will change completely within three years, not only for Central Group but for the entire retail industry, he says.

Lazada is the largest player in e-commerce but Central Group and others will move their businesses into other channels and into e-commerce to compete directly.

Only some of business units under Central Group are online, such as the department store, PowerBuy, Tops and OfficeMate.

There are still several businesses in the group that have yet to enter the e-commerce field, such as construction materials distributor Thai Watsadu, while stationary store chain B2S started to offer online shopping this year.

However, sales of Central online business reached 3 billion baht in 2016 and the value is expected to comprise about 10% of the company's total sales in the near future.

Central Group's total sales were 332.7 billion baht last year, which the group believes indicates there is huge potential to increase sales after all business units to go online next year.

Mr Nicolo projects that the e-commerce market will have significant impact on retailers, leading to their gradual disappearance from the market.

It will start by losing sales, decline in sales per square metre, resulting in weak operation results, he says.

But he doesn't think this will happen to bigger players, who have to reinvent and redesign their stores by bringing technology into the stores.

Central Group, he says, has many advantages over Amazon or Lazada. Central has stores, customer data and customer knowledge across many different stores, locations and categories. The group employs more than 100,000 people.

"In Thailand and in Asia, people like to go to stores and shopping malls. Central has various stores and brands. I think that our brands are an asset that we can build upon, our biggest advantage," Mr Nicolo says.

"Next year will be a year of tests and learning, bringing online all of our business units. 2019 will be the year of reinvention of many store models, then a year later, we will be the clear leaders in most retail segments."

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