The collapse of Thailand’s tourism market in the wake of Covid-19 and falling consumer sentiment have left retailers in the nation eyeing smaller footprints next year.
But on a more positive note, the boom in online shopping – fuelled by necessity and delivering convenience – has provided some relief to struggling store owners.
Consumer confidence fell to its lowest point in 20 years in April at just 47.2 and even though the confidence improved in subsequent months, it remains a long way from pre-Covid-19 levels.
“The retail trend highlight this year has been the remarkable growth of the e-commerce industry in Thailand and how retailers adapted to online retail sales after social distancing measures were implemented,” explained Jariya Thumtrongkitkul, head of advisory & transaction service – retail at CBRE Thailand.
“We had been talking about the necessity of omni-channel sales in the changing retail landscape and Covid-19 has acted as the catalyst to speed up the process,” she said in a part of a review by the company of the state of the commercial property market in Thailand.
CBRE Research reports that the Bangkok retail supply totalled 7.8 million sqm at the end of the September quarter, up 2.4 per cent year on year. Twelve new retail developments opened this year adding a combined 100,000sqm of new retail space to the country, the largest of those being the Siam Premium Outlet.
While occupancy across the market remained strong at 96 per cent, Thumtrongkitkul said CBRE Research was starting to see a drop in retail developments in downtown Bangkok due to the absence of tourists.
Some retailers – especially in the food & beverage sector – are considering using less space per store and focusing more on delivery services following the growth of online food ordering in the country.
“How fast the retail industry can recover from Covid-19 will largely depend on how effective the stimuli from the government such as “Kon-La-Khrueng” (Let’s Go Halves) and “Rao-Tiew-Duay-Gun” (We Travel Together) campaigns are as well as when international travel restrictions will be lifted,” she said.
“The amount of retail space in the market, especially in Bangkok, cannot be sustained only by domestic demand in the long run.”