Thailand's Supershoppers Get US-Style Superstores

By , Special to The Christian Science Monitor

Dense, choking traffic is nothing unusual in Bangkok, but on a recent Saturday afternoon the road to one of the city's largest shopping malls was clogged tighter than usual.

Southeast Asia's first Office Depot superstore was celebrating its grand opening.

In America, such an event would not normally generate gridlock. But as Asians become megashoppers, megamalls take center stage - soaking up land once devoted to rice fields and traditional fresh markets.

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The Asian landscape is looking more and more like suburban America.

Nowhere is that transformation more obvious than in Thailand, where economic growth has brought a robust retail culture. At 8 percent annually, Thailand's economy was the world's fastest growing from 1985 to 1995.

A financial crisis that has slammed Thailand in recent months will likely slow consumers but not stop them. A devaluation of the currency this month drove consumer prices up and put the brakes on the economy.

With the economy choked with debt, economists see virtually no growth for the rest of the year.

But the new middle class has a determined consumer appetite that prefers American-style discount superstores. Analysts expect Thailand to have 62 of Asia's 167 superstores this year, compared with 11 in 1994.

Florida-based Office Depot moved aggressively into the market and found no shortage of equally aggressive local competition. "Southeast Asia has some very good homegrown retailers," says Joseph Ellis, an international retail analyst at Goldman Sachs in New York.

Two Thai companies - Charoen Pokphand (CP), Southeast Asia's biggest conglomerate, and Central Retail, the region's biggest department store chain - have launched successful superstore chains. "They are both opening stores at a rate faster than any of the stores coming in from outside," says Mr. Ellis. The local players' success lies in their ability to blend American-style convenience and choice with local knowledge.

Among the biggest Thai contenders is CP's Lotus Supercenter, with six outlets and another six expected by year's end.

The store looks a lot like Wal-Mart. In fact, CP brought in former Wal-Mart executives to oversee its operations. Signs on the wall announce "We will not be undersold," in Thai and English. Shoppers load up oversized carts with everything from stereos to mangoes.

"Thai consumers tend to easily accept Western culture," says Yotin Tavikulwat, general manager for leasing and consignment at Lotus. Shoppers might find a saleswoman standing on a chair announcing a T-shirt sale through a megaphone, however, a scene more reminiscent of a traditional Thai market than a Wal-Mart.

All this local expertise means a wise strategy for foreign retailers may be joint ventures with Thai companies. "Foreign companies trying to enter Thailand without local partners will suffer," says Harlan Miller, chief operator of Office Depot (Thailand), a joint venture with Central. "Thai partners are invaluable in terms of navigating legal hurdles and local business customers."

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