July 24, 2014 12:00 am JST

Thailand outlets blend into the scenery

YUKAKO ONO, Nikkei staff writer

Some 7-Elevens in Thailand offer pastries baked inside the stores themselves or just off-site.

BANGKOK -- Tourists coming to the city's center are usually surprised at how urbanized it is. There are no elephants strolling along the streets. In fact, the streets are packed with cars, trucks and buses. In many places, skyscrapers tower over them. In others, large shopping malls stand beside them.

     And there are a lot of 7-Elevens.

     Thailand in fact, boasts the world's third largest network of 7-Eleven stores, after Japan and the U.S. Along Silom, a main street running through the business district here, there is an outlet practically every 100 meters.

     The country has more than 7,600 7-Elevens -- 45% of them in greater Bangkok. CP All, the chain's operator in Thailand, is shooting for 10,000 shops by 2017. It is especially eyeing more upcountry openings.

     CP All, part of the huge Charoen Pokphand Group, operates stores under an area license granted by 7-Eleven Inc., a wholly owned U.S. subsidiary of Seven-Eleven Japan. Since opening its first store in 1989, CP All has made 7-Eleven the dominant convenience chain in the kingdom, cobbling together a unique business model along the way.

     There are plenty of food and beverage items, but there are also services. Customers can pay their bills and accept parcel deliveries at 7-Elevens in Thailand. While Japanese 7-Elevens offer these extras too, Thailand shops also let their customers book airline seats.

     Like in other countries, 7-Elevens in Thailand are now reaching out to caffeine fiends, offering brewed coffee and lattes at about one-third the prices Starbucks charges. About 200 shops are equipped with coffee machines, and some are also selling pastries that come from ovens inside or near the shops themselves -- treats not even available in Japan.

     Seven-Eleven has become a lifeline for many urbanites. But forget all those services and baked goods. Younger Thais seem to have glommed onto 7-Eleven for the simple reasons that its prices are stated and its stores are clean -- unlike the many mom-and-pops that still exist in the country.

     CP All seems to have a symbiotic relationship with Thailand's traditional sidewalk businesses. There are even food stalls on 7-Eleven doorsteps. Assistant Vice President Banyat Kamnoonwatana welcomes these vendors. "It's a friendly relationship," he said. "Food stalls are a part of Thai peoples' lives. We don't want to be invaders."

     The grilled-chicken, fried-rice and other vendors also double as security guards of sorts, keeping would-be robbers at bay, he added.

     Issues lie ahead. While Japanese 7-Eleven shops have products delivered a few times a day, most Thai 7-Elevens get only one. Logistics in the country are not as developed as in Japan, and Bangkok traffic makes prompt deliveries difficult. Toward the end of the day, there are often empty shelves, especially in the deli section.

     "Our management shares the philosophy that items running out of stock lowers customer loyalty," CEO Tanin Buranamanit said in April, referring to the words of Toshifumi Suzuki, chairman and CEO of Seven & i Holdings.

     CP All is now setting up regional distribution centers for chilled deli products. Each center will cover 200-300 stores. The operator hopes to double the number of these centers to 14 by the end of 2017.