A billionaire kin who thinks differently

Vicha Tejapaiboon chooses his own way. Although his family is known as the country’s whisky giant, and some members have been banking tycoons, Vicha chooses to be as free as a bird, working as a reporter and a publisher. His idea is to be the owner of Thailand’s ‘Yellow Paper’.

The free publication, which carries classified advertisements, has been doing well in the market. Although the idea about the free publication is not new, this is the first time in the Kingdom. Vicha said he got the idea when he was studying broadcasting journalism in the US.

The whole setting is that the free publication is designed to tap into the boom of sales of second-hand items. An 800-word story about Yellow Paper and profile of Vicha can be expected from this special column.

Nearly 1,000 service stations to be closed

Although several hundred gas stations have already been closed over the past two years during the economic crisis, nearly one thousand more are likely to follow. Industry sources said increased competition in the oil retail market through 2,000 will force unprofitable service stations to close down. Owners of the stations under the Petroleum Authority of Thailand are likely to suffer the most.

PTT sources said up to 300 of about 1,500 gas stations face closure this year, in order to bring down the total number to about 1,200. Shell of Thailand is to close about 100 of its 800 gas stations, while Caltex plans to close 200 of currently 500 stations. Esso (Thailand) was to shut down 400 of its existing 900 stations, they said.

There will also be new service stations in prospective areas, and many stations in the same areas will be merged. PTT also plans to close some oil depots in the provinces, while a number will be merged. PTT plans to spend up to Baht 1 billion to spruce up new service stations between 2000 and 2002.

PC & peripheral sales will continue to grow in 2000

Sales of computer peripherals steadily grew in 1999 as PC sales shot up, and experts predict a continued growth this year. The local PC market changed rapidly last year with a total of 300,600 units sold, up from 174,000 units in 1998. The market also saw sales of inkjet printers rise to 134,000 units last year, despite a rise in sales of laser printers.

Business users made up 55% of the market and the ratio is likely to rise to 58% this year, while the number of home users, which constituted 45% in 1999, is likely to drop to around 42%. Lower-market PCs made up 81% of PC sales in 1998 but the ratio fell steeply to only 54% in 1999, against a sharp increase in upper-market PC sales - from 9% in 1998 to 36% in 1999.

The IT tax cut is expected to change sales ratios of PCs and peripherals this year. The local IT market also witnessed an increase in sales of other related software and cards in 1999. Changes were also made to PC education and training markets which last year earned about Baht 1 billion.

Competition likely to heat up as new players join local auto market

Vehicle sales will continue to increase this year despite fierce competition as new car makers are set to start production lines in Thailand. The abolishment of the local content rule by the government will be a factor to help spur sales growth, despite price increases in the market, said Ninnart Chitheeraponyo, vice executive chairman of Toyota Motor (Thailand).

Competition will heat up when General Motors (Thailand), BMW (Thailand), and DaimlerChrysler (Thailand) start production of new cars here later this year. Other car makers have also planned to start producing Audi and Volkswagen cars in the Kingdom this year. Direct selling, led by distributors of super cars - namely Porsche and Ferrari - would be introduced more into the auto market, Ninnart said.

The market also saw Primus Leasing (Thailand), which is fully owned by Ford Motor Co., play a leading role in the car leasing market in 1999. More international leasing units are likely to join the market this year. Car prices increased by 15% last year and are expected to rise further this year.

Inflation rate below IMF prediction

The Ministry of Commerce released figures showing the inflation rate in December grew only 0.7% compared to what it was a year ago, while the whole year rate changed only 0.3%, which was lower than the 0.5% to 1% levels predicted by the International Monetary Fund. The prediction by the ministry for this year’s inflation is 2.5%, as no price pressure in the market is expected.

"The 0.3% ‘mild’ rate is impressive and signals a stabilized economy," said Suchai Chaovisit, director-general of internal trade department. The rate, when compared to those of neighboring countries, would mean that Thai-made products could be more competitive in world market, Suchai said. Inflation rates in Malaysia and Indonesia rose 1.6% over the past 11 months last year, while that of the Philippines topped 3.9% in the same period, he said.

All local industries in the economy are ready to go full steam ahead this year after delays in late months last year. Inflation rates would vary to export surge.

Stores expand to tap into ‘Next Generation’

Panasonic sales increased incredibly after Amita Tata Young became their presenter in their latest series of commercials. Sales of hand sets in digital GSM by Advance Info Service Plc got the same response from the market when Nicole Terio said hello from a safari in South Africa to her dad in Bangkok a couple of years ago.

Those were not accidental, but a show of force by one of the most powerful consumer groups - the Generation Next, or teens. Sales of Panasonic audio-visual devices increased by 33.12% from 121,000 units to 164,000 units between July and October last year, since Tata Young made the show, said M Ikesaki, sales director of Siew-National Co.

Meanwhile, continuing the trend, Central Plaza is to expand its ‘Junction X’ corner from Lad Prow to other branches. Centre Point, which is one of the most dazzling fashion centers for teenagers, is now Bangkok’s Shinjuku. Leading music houses have witnessed the rise of the new generation customers.

IT stores gear up to compete for Baht 4 billion market

IT City, the country’s largest super store for information technology products, has plans to open two more branches this year. IT City believes that demand is still very high, as combined sales in this local IT market are expected to rise to around Baht 4 billion this year. Ekkachai Sirijirapattana, executive director of IT City Co., said the new branches would be in suburban areas.

IT City expects sales to increase to Baht 850 million in 2000, up 28% from Baht 660 million in 1999, Ekkachai said. IT City currently runs two IT stores at Pantip Plaza, and at Tawanna Tower. Competition is likely to heat up this year as there would be new players entering into this local market, Ekkachai said.

The market was shaken by a Singaporean IT trade chain which came to the Kingdom late last year. The Challenger IT store announced its policy to compete with ‘lowest prices’; however, demand in the market is still very high. IT City would maintain its image as the most reliable source of brand name products.

Banking: more redundancy expected this year

The new millennium may see thousands more employees in the country’s banking sector being laid off, as nearly 10,000 were dismissed in 1999. Bangkok Metropolitan bank and Siam City Bank will lead the new wave of layoffs, as the two government-owned banks will be sold to foreign investors.

The government’s Krung Thai Bank is the champion as it plans to offload 6,000 of nearly 20,000 employees between late 1999 and 2000. Only 2,327 KTB workers joined the early retirement program at the end of the year, said a KTB source.

Thai Farmers Bank and Bank of Ayudhaya have been the second and third to lead in redundancy, with 1,350 and 1,200 employees laid off, respectively.

Powel plans to produce budget PCs

Powel Computer Co., one of the leaders in the local brand PC market, said it has plans to produce low-price series PCs to compete in the lower price market. The new products, the names of which have yet to be decided on, would be sold mainly through distribution channels to cut costs.

The new tax structure on IT items under the Information Technology Agreement by the World Trade Organization is not likely to affect local brand PCs in the market, as all parts to be used will benefit from the zero rate tax, said Kasin Aramseriwong, managing director.

Powel Computer has applied for investment promotion privileges from the office of the Board of Investment, as Powel plans to increase PC exports this year. The second brand name would help create a new balance against competitors in this local market.

Copyright 1999 Pattaya Mail Publishing Co.Ltd.
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Updated by Chinnaporn Sangwanlek, assisted by Boonsiri Suansuk.