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Thai hub for AEC operators suggested

(Source: KWANCHAI RUNGFAPAISARN, THE NATION |September 26, 2015 )

Thailand can be a hub within the Asean Economic Community (AEC) for retailers and other business operators from the Philippines and other Asean member countries to set up regional headquarters and better penetrate the market on a regional scale, especially in CLMV (Cambodia, Laos, Myanmar and Vietnam) markets, according to experts.

Samie Lim, chairman emeritus of the Philippine Retailers Association, said retailing was now the region’s leading revenue generator in the tourism sector, overtaking the contributions from airlines and hotels.

“With the AEC, Thailand can be a logistics hub for many food and fashion brands from the Philippines and other countries that want to penetrate Asean, especially the CLMV market. They can set up a regional office in Thailand to do marketing and the sorting of products,” said Lim.

There are currently about 25 local food brands and another 25 fashion brands from the Philippines looking to expand their presence to Thailand and other potential markets in Asean via franchising, he said.

“On the other hand, we [the Philippines] can be a gateway to the West. We can help our Thai franchisees to go beyond Asean to Europe or the US. We have strong marketing and networks. We have also very good ideas in creating business and innovation,” Lim explained.

“Thailand, however, is doing well in operating and expanding the business sector,” he added.

The retail expert said that in his opinion, Thailand was doing better in preparing itself for the implementation of the AEC than other Asean countries.

“I’m quite impressed that the department of trade and industry in Thailand has recently approved Bt100 billion to lend to local SMEs. The loans will be for seven years at a 4-per-cent interest rate. Thailand is the first country in Asean to provide such financial assistance, and I respect and admire your government in providing such a public service,” he said.

Lim, also chairman emeritus of Philippine Franchise Association, said that in addition to big companies, the implementation of AEC would benefit SMEs. Franchise business is undertaken by SMEs and they are better able to penetrate the AEC.

As to the Philippines, it has about 100 million people, with an average age of just 23.

It is the third-biggest English-speaking country in the world, behind the US and India.

“We are also the No 1 in back-office activities, such as business-processing outsourcing centres. We are one of the two fastest-growing economies in Asia, with average growth of 6-7 per cent over the past 10 years,” said Lim.

The Philippine government has also reduced corruption to a great extent, and all money saved from corruption is put pack into infrastructure, social services and education, he explained.

“While other Asean countries have been negatively impacted by the world’s economic problems, the Philippines’ economy is still strong,” said Lim.

He added that while Thailand was becoming an increasingly ageing society, the Philippines had a younger population overall.

However, both countries can complement each other under the AEC, with Thailand able to provide wisdom and experience, while Philippines can support Thailand in terms of dynamism and new ideas, he suggested.

The Philippines will be the host for the “17th Asia Pacific Retailers Convention & Exhibition (APRCE)”, to be held in Manila between October 28 and 30 this year. The event is expected to attract 500 exhibitors and 40,000 public visitors.

Meanwhile, Malaysia will host the 18th edition of the event in Kuala Lumpur in 2017. More than 3,000 delegates from 18 countries throughout Asia-Pacific will join the three-day event.

Benjamin Ee, council member and associate members’ representative, the Malaysia Retailers Association, said that with the implementation of the AEC, business people around the region would have more meetings in Malaysia – promoted as the host country for AEC ministerial meetings – and at the end of the day they would shop in the country.

Ee said that under AFTA (Asean Free Trade Agreement), with members agreeing to become one community, it was a good time for Malaysia to expand within the region via cross-border business activities, especially joint ventures, franchising and e-commerce.

Malaysia is quite strong in food and beverage businesses, with special products such as durian and bird’s nest, he added. Under the AEC, Malaysia will bring foreigners into the country to work and contribute to the labour force, including in the business sector, especially retail and service industries.

Malaysia has enjoyed stable growth in its retail sector, with modern-trade sales increasing 5 per cent last year, while economic growth has been maintained year after year at about 5.5 per cent on average.

“The country’s retail space is expected to increase substantially by about 10 million square feet from 2014 to 2016, driven new shopping malls and mix-used complexes,” he added.

 

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