thailand important survey

8/13/2019 Thailand Important Survey

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Table of contentsPage

1 Matching Profile 2

1.1 The Trade Environment 2

1.2 The Seafood Sector 3

1.3 Consumer Trends 4

1.4 UK Share and Export Opportunities 5

2 Doing Business Profile 7

2.1 The Supply Structure 7

2.2 The Retail Channel 8

2.3 The Foodser vice Channel 11

2.4 Key Regulations andTar iffs 12

2.5 Tips and Useful Links 13

Seafood Export Profiles

THAILAND


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Seafood Export Profiles THAILAND 2

SECTION 1 MATCHING PROFILE1.1THETRADE ENVIRONMENT

Thailand is South East Asias second

largest economy and has experienced

strong annual economic growth inrecent years.

Approximately 6.5 million people are

registered in the Bangkok region.

Most medium- and high-income

people live in the major cities, including

Bangkok, Phuket, Chiang Mai,

Prachuapkhirikhan, Chonburi, Hat Yai,

Nong Khai, Nakorn Ratchasima, Samui

Island, SuratThani, Ubon Ratchatahni

and Udon Thani.

The number of expatriates registered

in Thailand stands at 250,000. British

expatriates comprise around 10% of

this figure. However 40,000 expatriates,

including British, are resident in Thailand

for just six months per year.

TheThai economy grew 4.2 % in thelast quarter of 2006. Overall, 2006

registered a 5% growth, compared to

4.5% in 2005.The economy is forecast

to grow at 4-5%. GDP per capita is

forecast at around 3,638 ($US per

year) for 2007.

Supportive factors for growth in 2007

include the fact that average oil prices

are to stabilise in 2007 and the rate ofinflation is also forecast to remain

stable. As a result, purchasing power

and consumer confidence will improve.

Interest rates have declined and will

continue to decrease over 2007.

The government budget and investment

from state enterprises are set to

support economic growth.

Tourism is growing continuously in

Thailand.The Tourism Authority of

Thailand (TAT)www.tourismthailand.org

has set a target of around 8% growth for

the number of tourists visiting Thailand,

based on 13.78 million international

tourists in 2006. Income from exports

and tourism will increase and help

support economic growth despite

both showing a slower growth rate

than in 2006.

During 2006, the average

unemployment rate was 1.5 %

compared to 1.9 % in 2005.

Fast facts Source: Euromonitor International

Population 65.2 million

Land area sq. km 513,120

Inhabitants per km 126

No. of households 19.6 million

Capital Bangkok

Other main cities Chiang Mai, N akorn Ratchasima

Languages Thai

Religion Buddhism

Currency Thai Baht (THB)

Exchange rate (2006 average) THB: = 70Total GDP (2006) 1.12 billion

Real GDP growth rate (2006) 5%

GDP per capita (2006) 1,718

Inflation (2006) 4.7 %

Unemployment (2006) 1.5%

International status Member of Asia-Pacific Economic

Cooperation (APEC) and the Association

of South-East Asian Nations (ASEAN)

Government type Democracy

Unemployment (2006) 1.5%

Total food and drink imports (2006) 2,719.21 million

Total food and drink exports (2006) 8,302.15 million

Top 3 import countries Indonesia,Taiwan,Japan
http://www.tourismthailand.org/http://www.tourismthailand.org/


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The market for high quality imported

seafood has been expanding over the

past few years in Thailand. However,seafood, especially imported product,

is a luxury for average income families.

Thailand is a large exporter of seafood

both in terms of fresh and processed

food such as canned tuna and snacks.

Most imports are frozen fish and are

mainly for re-export.

SECTION 1 MATCHING PROFILE1.2 THE SEAFOOD SECTOR

Table 1: Top 10 landed and farmed

species in Thailand, 2004Table 2: Key ports in Thailand

Rank Species 2004

million

Total 1,609.43

Sub-total fish 594.70

1 Ind o-Paci fic macker el 64 .00

2 Threadfin breams 42.85

3 Scads 36.37

4 Longtail tuna 32.49

5 King mackerel 31.53

6 Trevallies 19.74

7 Sardinellas 18.71

8 Crocker 18.19

9 Eastern little tuna 17.36

10 Indian mackerel 13.01

Value by species for whole marine fishery

sector in Thailand (including coastal

aquaculture) 2004

Source:The Department of Fisheries

Source: Port Authority of Thailand

*TEU = Twenty feet equivalent unit

*DWT = Deadweight tonnage

Rank Name

Type of

commoditis

handled

Storage/

square

metres

Maximum

size of vessel

Any

specialised

facilities

1 Bangkok All 49,000 172m/12,000

DWT* Central Port

2 Laem

Chabang Industrial

10.1 million

TEUS*

450m/70,000

DWT* Eastern Port

3 Ranong Fisheries 27,000 150m/12,000

DWT* Andaman Sea


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SECTION 1 MATCHING PROFILE1.3 CONSUMER TRENDS

Convenience is becoming increasingly

important as the packaged grocery

market grows.Thais living in urbanareas have become rather brand

conscious and their shopping styles

have moved away from the traditional

open-air wet markets to modern

supermarkets and shopping centres

which offer convenience and a wide

selection of products.

There are also an increasing number of

health-conscious consumers.This has

led to an increased demand for healthy

and functional foods. Due to growingconcern over health and wellness, and

food quality, with recent outbreaks of

the avian flu, consumption of chicken in

Thailand is declining and being

replaced largely by fish and seafood,

which are thought to be healthier.

Thai consumers are showing a growing

preference for higher quality products.

Thai eating habits are changing to

incorporate more imported food

items. Due to the increasing numberof women and young adult labour in

the work force, the introduction of

ready meals and prepared food is

expected to trigger major growth in

the convenience food market in

Thailand. Moreover, this younger

population is very open to trying new

products that fit their lifestyles.

Promotions are becoming more

frequent in retail outlets.Value

mentality is strong but manufacturersmust balance value and brand quality.

Winning customer loyalty is key to

retailer success. Existing brand loyalties

are most likely to be broken by new

products that are of good quality, well

packaged, distributed, promoted and

competitively priced, rather than

cheap products.

IncreasingThai exports of food

products is driving demand for foodingredients as well as the growing

demand for using imported ingredients

for innovative products.

There are a growing number of

companies who are paying more

attention to quality over cost forfood ingredients.

The international foodservice industry

is expanding rapidly, both in numbers

of companies entering the market and

in numbers of outlets.There has been

an increase in the number of younger

Thais, as well as working professionals,

eating out as it is more convenient and

efficient than cooking at home.

However there is still a general

tendency among Thais to cook athome rather than dine out, particularly

among residents living in rural areas.

There is also the preference towards

traditional cooking methods and

authentic styles of cuisine.

Thai consumers prefer fresh/chilled

seafood to frozen products.

Nevertheless frozen products are

slowly being introduced to retail

chains and supermarkets.The conceptof frozen fish is still very new to the

Thais and Bangkok is being targeted as

the first point of retail.

Due to the price points, imported fish

and seafood from the UK is mostly

consumed in high-end five star hotelsand restaurants. Items such as smoked

haddock and kippers are now being

introduced to bars and pubs

throughout Bangkok and tour ist spots.

The high end restaurant sector is

mostly driven by fresh products as the

Thai Food and Drug Administration

(FDA) regulations are stricter on frozen

products. Companies are often asked

to provide a certificate for products

regulated by the FDA containinginformation about a product's

regulatory or marketing status.


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SECTION 1 MATCHING PROFILE1.4 UK SHARE AND EXPORT OPPORTUNITIES

UK food and drink imports to Thailand

accounted for a total of 72.34 million

in 2006. Although seafood imports fromthe UK to Thailand have decreased over

the past year,Thai food processors

import large quantities of food

ingredients for the food processing

industry, which are not available locally.

Approximately 67% of Thai exports are

processed seafood products.Therefore

there may be an opportunity for UK

seafood imports which are not available

inThailand.

The stability and escalation of the Bahtin 2006 led to an increase in imported

consumer oriented food products from

the UK.

Market penetration for imported

products is concentrated in Bangkok

and major tourist destinations.

Despite a strong currency, there is a high

demand for food and drink from the UK.

Cereals, rice, pasta, cooking oils, biscuits,tea, snacks, drinks and other healthy

organic products are in demand. For

example,The Central Group is doing

very well with its partners Waitrose and

Marks & Spencer. Carrefour is also

interested in offering British products.

TheThai Governments policy

supports the development of value-

added production.This will boost the

demand for food ingredients.

In order to take advantage of the

opportunities available for

fresh/smoked seafood from the UK, a

high level of promotional work and

marketing would be needed.

Table 3: Imports of fish, fresh or chilled, excluding

fish fillets and other fish meat:

Table 4: Imports of frozen fish excluding fillets and other fish meat

Rank Country 2005 () 2006 () % Chg 05/06

1 Myanmar (Burma) 23,401,190 20,518,525 -12%

2 Norway 1,715,779 2,060,917 20%

3 Japan 219,905 812,108 269%

4 Australia 43,683 436,758 890%

5 India 6,379 328,971 5057%

6 Chile 460,561 308,580 -33%

7 Cambodia 285,866 260,198 -9%

8 France 48,173 127,587 165%

9 Other countries 5,225,550 4,210,484 -19%

UK 2,327 12,140 422%

Total 32,135,771 30,507,415 -5%

Country 2005 () 2006 () % Chg 05/06

Imported from the UK 1,677,243 463,754 -72%

Total frozen 631,743,733 657,144,940 4%

Source:The Custom Department of Thailand


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SECTION 1 MATCHING PROFILE1.4 UK SHARE AND EXPORT OPPORTUNITIES

(Aquatic products live and fresh, chilled

or frozen fish, shrimp, crab, squid)

Source:The Department of Fisheries

Table 5: Quantity of imports by

country and commodity, 2004

Table 6: Opportunity matrix by species

Rank Country 2004 (tonnes)

1 Indonesia 336,393

2 Taiwan 136,095

3 Japan 56,195

4 South Korea 45,034

5 China 34,823

6 Malaysia 33,059

7 USA 28,223

8 Philippines 14,438

9 India 9,753

10 Australia 9,021

11 UK 3,302

Species Potential in Potential in

Retail channel Foodservice channel

Salmon M M

Mackerel M M

Sole M M

Cod M M

Fresh or chilled trout M M

Greenland halibut M M

Haddock M M

Yellowfin tuna M M


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In Thailand importers are generally

also distributors.They are all located

in Bangkok as the airport and port

are close by. In addition 99% of the

customers for imported seafood can

be found in Bangkok.

SECTION 2 DOING BUSINESS PROFILE2.1THE SUPPLY STRUCTURE

Thailand: import supply structure, logistics and distribution

EXPORTER

SECONDARY DISTRIBUTOR

HRI FOODSERVICE/RETAILERS

EXPORTERS FOR RE-EXPORTATIONCONSUMER

LICENSED IMPORTER

WHOLESALER IMPORTERS PROCESSOR


8/13


There are 276 shopping malls

throughout Thailand. 140 shopping

malls are currently situated in Bangkokand another 26 are under

construction.

Modern retailing accounts for

approximately 63% of total retail sales.

A large proportion of consumer

expenditure is spent on grocery food

in retail compared to the foodservice

sector.The retail market share of

consumer expenditure accounts for

more than 70% of total food spending,

while consumers are allocating a lower

proportion of their expenditures to

foodservice (30%).

Wet markets are still popular due to

their convenience, freshness, price

competitiveness and availability of credit.

However, the flow of local shoppers has

been diverted from department stores,

wet markets and grocery stores tohypermarkets and supermarkets.

Hypermarkets are gaining popularity,

particularly for weekend entertainment.

Many are promoting their food safety

and hygiene standards.

Retailing in Thailand comprises of

several different formats. Modern retail

formats, such as hypermarkets,supermarkets and variety stores, are

becoming increasingly popular for their

convenience and wide product range,

especially in urban areas where about

90% of Thai shoppers visit

hypermarkets at least once a month.

Major retail developments are being

headed by international players from

the UK, France and the Netherlands.

In general all sales of imported food

and drink products are carried out in

the g reater Bangkok area, but there is

also a level of demand in major tourist

locations such Pattaya and Phuket.

Target groups include:

- expatriates;

- middle- to upper-class families;

- Thais who travel for business and

pleasure;- students from overseas;

- students in international schools in

Thailand and their parents; and

- tourists.

Central Retail Corporation is a

US$ 2 billion enterprise that has

developed Thailand's most successful

store formats and brands including

Tops Supermarket which was the

firstThai supermarket to have set upcentralised distribution centres for

fresh foods and dr y grocery products.

2.2 THE RETAIL CHANNEL

Table 7: Retailing formats and number of outlets in Thailand

Hyper mar kets 130 Tesco Lotus, Car refour, Big C .

Supermarkets 166 Central Food Retai ls ,The Mall Group,

Foodland,Villa,Tesco Lotus Supermarket and

Tesco Lotus Value Stores

Convenience stores 3,500 7 Eleven, Family Mart others

Convenience at gas

stations 1,327

7 Eleven,Tiger Mart,Tesco Express, Lemon

Green, Jiffy, Star Mart, Shell Select

Cash and carry 31 Makro

Department stores 51 Central Group,The Mall Group, Robinson

Group, Imperial, Merry King and anothertwo Japanese department stores, Isetan

and Tokyu


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SECTION 1 MATCHING PROFILE2.2 THE RETAIL CHANNEL

Central Retail Group

Market share 29%, N/A

and turnover

Store typ e C entr al R etai l

Corporation

Product range Premium

Best practices Imported frozen food

Consumer Medium- to high-end

demographics

Requirements Margins of 20% - 30%

(shelf life, margins)

Buying practices Self imported and from

other importers/

suppliers

Web www.centralretail.com

www.tops.co.th/

Tesco Lotus


and turnover

Store typ e J oi nt v enture

Product range Value

Best practices Everyday roll back,

express

Consumer Lower- to middle-income

demographics



Buying practices Local suppliers

Web www.tescolotus.net/

Big C (Casino)

Intermarch


and turnover

Store type Combination of discount

store and food outlet

Product range Value

Best practices Everyday low price

Consumer Middle-income

demographics



Buying practices Local suppliers

Web www.bigc.co.th

Carrefour


and turnover

Store typ e H yp er ma rk et

Product range Combination of high

and value

Best practices French influence

Consumer Middle-income plus

demographics



Buying practices Self imported and

local suppliers

Web www.carrefour.com

Makro


and turnover

Store typ e H yp er ma rk et

Product range Value

Best practices Retail and wholesale

Consumer Low- to middle-income

demographics



Buying practices Self imported and local

suppliers

Web www.makro.com

Top 5 retailers in Thailand
http://www.centralretail.com/http://www.tops.co.th/http://www.tescolotus.net/http://www.bigc.co.th/http://www.carrefour.com/http://www.makro.com/http://www.makro.com/http://www.carrefour.com/http://www.bigc.co.th/http://www.tescolotus.net/http://www.tops.co.th/http://www.centralretail.com/


10/13


The convenience sector, led by 7

Eleven is now offering more services

to their customers such as counterservice as pay points to business

associates, cable TV, telephone bills and

mobile phone bills.

Convenience stores are also trying to

offer a more exclusive range of

products especially ready meals and

frozen food.

Tesco Lotus is becoming more

aggressive in expanding more of their

smaller outlets as convenience storesnext to residential areas and at petrol

stations.At the moment they have 245

outlets at petrol stations in Bangkok.

Due to heavy traffic in Bangkok, one-

stop shopping is the solution for many

people in Bangkok.

SECTION 1 MATCHING PROFILE2.2 THE RETAIL CHANNEL


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The major players in the catering

business are hotels and restaurants.

There are also smaller caterers.

Seafood, particularly shellfish, is

considered as fine dining and is

therefore more expensive. It is not an

everyday meal. Imports of seafood are

only supplied to five star hotels and

top restaurants.

There are fast food vendors in

department store food halls that

specialise in fish, for example fish

and chips.

Pubs and restaurants also serve fish

dishes.

There is a significant market for food

and drink sales in both international

and local franchises. Franchising is stilldominated by western fast food

outlets followed by cafes and bakeries.

There is a current increasing trend in

Asian food such as Japanese and

Korean.Thai teenagers are influenced

by Japanese and Korean lifestyles,

music and movies.

Quick serve restaurants are not only

found in every shopping mall, but also

as stand alone outlets and street

vendors.

The increase in tourists will also

support the growth of the hotel and

restaurant sectors throughout 2007.

There are approximately 40 to 50

English/Irish style pubs and restaurants

which serve British food and beers.

SECTION 1 MATCHING PROFILE2.3THE FOODSERVICECHANNEL


12/13


Thailand is a signatory to the

Association of South East Asian

Nations (ASEAN) FreeTrade Area

(AFTA) and it grants preferential

treatment to the ASEAN member

countries through the Common

Effective PreferentialTariff (CEPT)

scheme for the AFTA.The products in

the CEPT Inclusion List (IL) are subject

to the stipulated preferential tariff rates.

As an APEC and ASEAN member,

Thailand relies heavily on its association

partners as import sources, making the

country a much more challenging

market for UK firms and exporters topenetrate.

Thailand has also signed four free trade

agreements with Australia, New

Zealand, India and Japan and is

currently in negotiations with Bahrain

and the United States pursuing similar

agreements. However, with the

implementation of many policies

designed to support export and

import growth and newly signedbilateral trade agreements,Thailand is

increasingly making its presence known

on the international trade stage.

Thailand is already in agreement with

four countries within the Free Trade

Area which include:

- Australia Free Trade Agreement:

TAFTA was first signed 1 January

2005, import quota set in 2007.

- New Zealand Closer Economic

Partnership first signed on 1st July

2005, quota in 2007.

- ASEAN China Free Trade

Agreement:ACFTA first signed on

1st January 2004.

- India FreeTrade Agreement first

signed on 1st September 2004.

Source: Department of Foreign Trade,

Ministry of Commerce.

Thailands principal agrifood import

sources, the United States (18.3%),

Brazil (12.1%),Australia (10.1%),

China (8.7%) and Singapore (7.5%),represent top competition for the

UK in the Thai export market.

With the recent political situation and

the governments push for buying locally,

UK exporters may find it more

challenging to enter theThai market.

Nevertheless,Thailand remains an

excellent location for exporters looking

to enter the South East Asian market.

Thailand is part of Free Trade Area

agreements with Australia and New

Zealand and both of these countries

have brands similar to those in the UK.

Thailands high tariff structure remains

a major market entry barrier. Duties onmany high-value fresh and processed

food products are especially high

compared to other countries in South

East Asia.The import duties have risen

to 25% or 30% per kilogram for food

and 60% - 428% for alcohol beverages.

Please see above.

Imports from non-ASEAN countries

are subject to customs, tariffs and a

value added tax (VAT) of 7%.

Import duty - Duty Rate AdValorem is

up to 60% per kilogramme.

Labelling

Labelling and registration procedures

are strict in Thailand. Products must beregistered and approved by theThai

Food and Drug Administration which is

similar to the US system.The process is

quite complicated and requires

extensive documentation.Timing for

approval ranges from 3 18 months.

The importation of processed and/or

preserved foods from the UK must

clearly state their recipes/ingredients.

The regulations for imported organic

products depend on the origin of the

products.

Labels must be approved by theThai

Food and Drug Administration and

affixed to imported food products.

Specific information is required to be

placed on the label and must be

printed in theThai language.

In practice the importer is the one

who does the registration and get FDAapproval.

Many multinational retailers inThailand

charge listing fees.

2.4 KEY REGULATIONS ANDTARIFFS


13/13


The best method for UK exporters isto contact impor ters and distribut ors

in order to sell to supermarkets,hypermarkets or to the cash and

carry channel.

Usually all local retailers source

from distributors within Thailand.Companies looking to access the

market should appoint a localdistributor who will assist in the

complicated process of registering

products and ensuring labellingrequirements are met.

British attendance at exhibitions, trade

support and PR material will all assistin driving British seafood in Thailand.

Key regulations and potential barriersto imports of seafood can be found at

the following sites:

- Department of Fisheries:Web: www.fisheries.go.th

- Customs Department:

Web: www.customs.go.th

Labelling/packaging regulations:

- Food and Drug Administration:

Web: www.fda.moph.go.th

For further market information,

contact:

EmmaWalters

Development Markets Manager

Food from Britain

4th Floor, Manning House

22 Carlisle Place

London SW1P 1JA

Tel: 0207 233 5111

Fax: 0207 233 9515

Email: [email protected]

Web: www.foodfrombritain.com

For further business advice on entering

the expor t mar ket, contact:

Marketing

Seafish

18 Logie Mill

Logie Green Road

Edinburgh

EH7 4HS

Tel: 0131 558 3331

Fax: 0131 558 1442

Email: [email protected]

Web: www.seafish.org

SECTION 1 MATCHING PROFILE2.5TIPSAND USEFUL LINKS
http://www.fisheries.go.th/http://www.customs.go.th/http://www.fda.moph.go.th/mailto:[email protected]://www.foodfrombritain.com/mailto:[email protected]://www.seafish.org/http://www.seafish.org/mailto:[email protected]://www.foodfrombritain.com/mailto:[email protected]://www.fda.moph.go.th/http://www.customs.go.th/http://www.fisheries.go.th/

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