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Saha Group gets ready to ride Thailand's e-commerce wave

Conglomerate is on the lookout for partners to help grow its online retail operations

We talked with executives from some of Asia's most influential companies on the sidelines of the second Nikkei Asia300 Global Business Forum, held in Bangkok on July 14. This week we wrap up our series of interviews with a look at emerging opportunities in Thailand and the Philippines.

BANGKOK Thailand's Saha Group has grown through numerous joint ventures with Japanese companies, including Lion Corp. and lingerie maker Wacoal. Now, the consumer products conglomerate is set to expand its e-commerce channels, having signed an agreement on business tie-ups with Singapore-based online retailer Lazada Group in June. Saha expects the deal to boost its online sales as a proportion of the total tenfold over the next three years from the current 1%.

Pipope Chokwatana, a member of the group's founding family and advisor to its main production and distribution arm Saha Pathanapibul, said the conglomerate will bring in "many more" partners to achieve this goal.

Why do you want to expand your e-commerce channels? Saha Group consists of over 200 companies [including those in food, household goods, clothes and cosmetics]. As a distributor, we take care of many channels.

We have our own e-commerce site, and we recently partnered with Lazada, as well as with Japanese wholesaler Paltac. There are many more [partners] that we are starting to get involved with. It's not that the traditional way [of doing business] is not growing in Thailand. But we believe that the trend toward online is coming.

How is Thailand's e-commerce environment? Thailand is missing a key piece for the online [economy] to grow, and that is the financial part of e-commerce. Digital payment in other countries is already mature, but it is still at an early stage here.

What is your view on Thailand's consumption? Consumption has been low, largely due to the high household debt, which is inflated in part because of a government policy [that offered tax incentives for first-time car buyers].

I believe it will get better in two to five years, thanks to government spending. A lot of infrastructure is being built, such as new roads. On the highly anticipated Eastern Economic Corridor [in eastern Thailand], we might soon see our first high-speed train. Thailand is placed at the center of the Association of Southeast Asian Nations, so we could attract even more consumers and new investors. These are part of the government's plan to get the country out of the so-called middle income trap. If we can get out of that, people will be able to spend even more.

What fashion trends do you expect after the mourning period for the late Thai king ends in October? There will be different demands -- we are going to switch from black to color [clothing], for example. It will likely depend on what the government asks us to do. It could drive higher demand, but I don't think it's going to be that strong.

How will your group expand abroad? We do that individually [by group companies] and in a decentralized way. One of the leading expansions abroad will be in instant noodles -- Mama noodles. Newcity [Saha Group's apparel company, which Pipope heads] has been taking our own brand of tights into Malaysia, Indonesia, Vietnam, Laos and Myanmar. Saha's group companies expand abroad on their own, based on their ability. If all the group products were centralized, there might not be that many brands that could go abroad.

Interviewed by Nikkei staff writers Tsubasa Suruga and Marimi Kishimoto

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