pendent grocery shops in Thailand, many of them without inventory management systems and occupying spaces that are distinctly lacking in glamour and décor. Enter the Donjai concept. For an investment reported to be in the area of 250,000 Thai baht, roughly split between Big C and the shop owner, the shop gets an upgrade that often includes a modern POS system or alternative improvement opportunity depending on its size, location and specific requirements. In return for its part of the investment, the Donjai operator is required to purchase about 50 per cent of its inventory from Big C. Big C wants to have 30,000 mom-and-pops signed up within the next few years and it would also like to raise that 50 per cent of inventory to a higher level. It’s an innovative arrangement because it effectively makes the independent shops formal distribution points for Big C, with an obligation to channel a minimum amount of inventory from it. And of course in formalising this distribution arrangement, Big C can build a closer advisory connection with the small shop owner that is likely to result in even more Big C merchandise being funnelled into the shop. There is also another advantage for Big C: it gives the company an opportunity to collect consumer information that can be employed for marketing and other business purposes. Of course, Donjai doesn’t please everyone. Some believe it is the beginning of the end of independent retail in the country, despite the fact that the concept does not confer store ownership on Big C – that stays with the shopkeeper. Ambitions abroad Big C has more ambition than just to throw a loving arm around the country’s independent retailers. In the third quarter, it entered the Hong Kong market by acquiring the 24 stores of the AbouThai grocery chain, which sells mostly products from Thailand, as the name suggests.  The company’s footprint, apart from the aforementioned Donjai stores that are not part of its owned portfolio, now consists of 1733 stores, ranging from 155 hypermarkets reaching a size of 12,000sqm, down to a small format numbering almost 1,500 called Big C Mini, which have limited assortments and are basically convenience stores. The company also operates 60 Asia Books stores and a 98-unit coffee chain called Wawee. Only 45 of the company’s stores are not in Thailand – the 24 in Hong Kong and 21 in Cambodia. (Funnily enough, Big C is also in Vietnam, but there the business is operated by Central Retail, which is a fierce competitor of Big C in Thailand itself.) Big C’s sales: is the glass half-empty or half-full? In the third quarter, Big C’s sales increased by 5.8 per cent on the same quarter a year ago, with the help of the addition of 70 new stores over the course of the last 12 months. While 5.8 per cent is nothing to sneeze at, indications are that same-store sales growth across the chain is wobbling. Comp sales were up 2.1 per cent year-over-year in the third quarter, after averaging 5.6 per cent growth over the preceding nine months. Moreover, the 2.1 per cent came off a base number of -0.5 per cent in the third quarter of last year, so the two-year ‘stack’ is only +1.6 per cent. Rental business  Only part of Big C’s retail business is its own retail operations, it rents out more than a million square metres of space to other retailers and service providers. The total is roughly the same amount of floorspace as its own direct retail operations. Big C hypermarkets typically anchor self-owned medium-sized shopping centres. So part of the rental space is lining the front of the hypermarket outside the checkouts, and another part of it is leasable area in the shopping centre. Rental and service income rose 3.4 per cent year-over-year in the third quarter, with more leasable space, better occupancy and rental abatements easing. The company had been hoping to go public this year but that is now postponed until 2024, when it hopes for better economic conditions and a more favourable investment environment. Omnichannel: early days Big C’s omnichannel efforts are still in the early innings, with online penetration now 5.5 per cent of total sales, compared with 5.3 per cent a year ago. This is very low penetration compared with some of Big C’s competitors: CP Axtra, which operates the Makro and Lotus’s chains, reported 14 per cent omnichannel penetration in the latest quarter, and Central Retail, which bills itself as the number one omnichannel retailer in the whole of Southeast Asia, says its online penetration is a lofty 18 per cent. Clearly, Big C has upside in this regard, particularly with such a huge real-estate platform that can be harnessed as a distribution network. Still, the priority is building out the store network itself – in Thailand and in Cambodia and Hong Kong, where it has a toehold. It also wants to do a lot of renovations and a better job of rejigging the mix in existing stores to take advantage of opportunities. For example, the company is now in hot pursuit of the growing number of tourists, reconfiguring some of its hypermarkets in tourist locations to make a direct appeal to international visitors. Some of Big C’s highest-profile stores, including its monstrous Big C Rajdamri in downtown Bangkok and similar leviathans in Phuket, Pattaya, Koh Samui and Chiang Mai, are getting fitted out with zones where tourists can purchase made-in-Thailand souvenirs, foods and practical travel items. Far away from the glamour of Rajdamri though, Big C’s bread and butter is still the average Thai consumer, many of them in low- and middle-income locations around the country. Many are still loyal to the local grocery stores that are already, or are destined to become, Donjai shops. If Big C succeeds in modernising and leveraging off a big chunk of that mom-and-pop fleet, it will change the face of Thai retail.