Department Stores in Thailand

2021 DEVELOPMENTS

Lockdowns, reduced opening hours and economic shock of pandemic hit department stores particularly hard

The retail current value sales of department stores plunged by around a fifth during both 2020 and 2021. Department stores operators were particularly hit hard by COVID-19, particularly during the lockdowns, when they were forced to temporary close their stores.

Department stores seek to assuage consumer concerns regarding COVID-19 contagion

Department stores players worked hard to provide customers with a bio-secure environment and allay concerns about exposure to COVID-19 once stores were allowed to reopen at the end of the initial lockdown in May 2020. They measured customers’ temperatures when visiting stores and provided hand sanitisers around their outlets.

Leader Central Retail Corp seek to compensate for pandemic disruption by driving e-commerce growth

Central Retail Corp (Central and Department Store and Robinson Department Store) and The Mall Group Co Ltd (The Mall, Siam Parago, The EmQuartier, The Emporium and Marks & Spencer) are the leading players, accounting for almost half of retail value sales of department stores between them in 2021.

PROSPECTS AND OPPORTUNITIES

Post-pandemic recovery will be sluggish, as many consumers continue to focus on necessities

The retail current value sales of department stores will only begin to recover in 2023 and remain below their pre-pandemic (2019) level even at the end of the forecast period. While consumers are expected to return to more familiar lifestyles as the immediate threat from COVID-19 wanes, the recovery of department stores is likely to be constrained by the challenging economic environment resulting from measures introduced to contain the pandemic.

Struggling to compete on price, department stores will continue to lose value share to specialists

The retail current value sales of department stores were under pressure even before the onset of the pandemic, and their business model will continue to come under pressure from other retailing channels during the forecast period. Prices in department stores are often higher than those available online, while the rise of fast fashion retailers such as H&M has intensified competition in apparel and footwear.

With e-commerce here to stay, department stores will adopt a more omnichannel approach

The rise in e-commerce resulting from the closure of physical stores during lockdown, concerns about viral transmission through social contact and consumers’ increased digital engagement is set to have a lasting impact on consumer behaviour in the Thai market. The COVID-19 crisis has seen the consumer base for e-commerce expand significantly, while established online shoppers have increased the range and frequency of their purchases.