Central Group, the country's biggest retail conglomerate, aims to spend a combined 200 billion baht over the next five years in expanding its retail, hotel, property and e-business both at home and abroad, with an aim of doubling sales to 800 billion baht.
Tos Chirathivat, the group's chief executive, announced Monday that Central is committed to maintaining its investment budget of 30-40 billion a year from 2018 to 2022 to expand its retail, hotel properties and e-business both in Thailand and the international market, especially Vietnam, a strategic country for the group.
Of the total budget, 50 billion baht has been earmarked to develop a new mixed-use project on a plot formerly owned by the British embassy, for which Central and its partner, Hong Kong Land, recently won the auction; and the co-development with Dusit Thani Hotel for a new mixed-use complex at the intersection of Rama IV and Silom roads.
A feasibility study is being conducted for a new mixed-use project on the British embassy plot, with construction expected to commence in the next two years. Construction on the new mixed-use complex being co-developed with Dusit Thani Hotel is due to begin in 2019.
Some 47.5 billion baht will be allocated to expand existing businesses both at home and abroad this year, and 103 billion will be used over a five-year period to expand retail, property and e-business, including e-logistics, e-finance, IT systems and mergers and acquisitions.
The remaining budget will be allocated to a new e-commerce platform, JD.co.th, and an e-logistics system to be launched in May.
With the expansion plan, the number of stores under the group will rise to 7,509 and span 52 provinces by 2022, up from 4,970 stores in 38 provinces, Mr Tos said.
Central Group further looks to quadruple its footprint in Vietnam. The company has 217 stores in Vietnam with more than 700,000 square metres in combined retail space in 37 provinces. In the next five years, the company aims to have 753 stores there, occupying 2.5 million square metres in 57 provinces.
With the aggressive expansion effort, Mr Tos expects the sales contribution in Vietnam to increase to more than 20% by 2022 from 13% in 2017.
Central Group reported that the business in Vietnam has grown by an average of 340% over the past five years (2013-17) and that Central is now the largest foreign retailer in Vietnam.
Central Group operates five core business units: shopping mall, food stores, fashion stores, hardline stores and online businesses.
The company operates 31 Big Cs, 59 Food Lanchi Mart food stores, 49 fashion outlets under the Robins, Delala, Supersports and Marks & Spencer brands, 79 Nguyen Kim and B2S stores, and three online platforms: NguyenKim.yn, Robins.vn and B2S.com.vn.
The company employs 17,000 people in Vietnam, serving over 175,000 customers a day.
Central Group plans to open 459 new stores in Thailand and Vietnam this year. The company will open Tops Plaza in Phayao province this quarter and complete the renovation of CentralWorld in the second quarter.
In the third quarter, the company will open new businesses including Robinson Lifestyle Amata Chonburi, Tops Plaza Singburi, Central Phuket 2 & Triphum Attraction and Centara West Bay Residences & Suites Doha in Qatar.
In the fourth quarter, it will launch Tops Plaza Amphur Phon in Khon Kaen and Pattalung, Zen Patong Phuket, Robinson Lifestyle Chaiyaphum and I-City Mall in Malaysia.
Mr Tos said the company will continue pursuing its goals of becoming a retail leader in lifestyle and services, further expanding beyond Thailand and strengthening its business through mergers and acquisitions.
Central Group has achieved average growth of 11% over the last five years. Thailand accounts for 72% of its revenue, Europe 15% and Vietnam 13%.
The company will also focus on initiating online platforms, including omnichannel, e-marketplace and big data, to transform the group into a tech company.
With the expansion, the company targets sales of 397 billion baht this year, up 14% from last year.