(Source: The Nation | January 28, 2016)
Index Living Mall, a top retailer of home-furnishing products, yesterday announced its 2020 vision to extend its leadership outside Thailand and into Asean.
The vision is in line with urbanisation in the region, which has shifted Asean consumers towards a more modern lifestyle, including the way they buy and use home-furnishing products, as well as the rise of middle-income earners throughout the Asean Economic Community.
Index Living Mall has franchised stores in three countries in the region, Thailand, Malaysia and Vietnam.
Managing director Kridchanok Patamasatayasonthi said the company aimed to double the contribution from AEC markets from 5 per cent of its total revenue currently to about 10 per cent by 2020. The company posted Bt9.5 billion in total revenue last year, up 5 per cent over 2014.
“Our market expansion through international franchisees is the result of growth in the home-furnishing and accessories retail sectors among Asean member countries. Other positive factors, including the bustling economic outlook, rising gross incomes, and similar customer behaviour, helped to accelerate our decision to look for investment opportunities in new markets such as our neighbouring countries within Asean,” she said.
Kridchanok said the company recently appointed VinDS, the retail investment arm of Vingroup, one of the largest commercial-property developers in Vietnam, as its franchisee to tap into the home-furnishing and accessories retail market in that country.
The first Index Living Mall there had a soft opening last month in Ho Chi Minh City, occupying 7,000 square metres of retail space. Located at Vincom Mega Mall Thao Dien, the store cost more than Bt200 million and is expected to achieve Bt350 million in sales in the first year.
The Vietnamese franchisee VinDS also expects to open 10 Index Living Mall stores in major cities in Vietnam, including Ho Chi Minh, Hanoi and Da Nang, within five years.
“Economic growth indicators show that the Vietnamese retail market is No 2 in Asia, after only China,” Kridchanok said.
“During the first half of 2015, the Vietnamese economy posted 6.28-per-cent growth, the highest since 2008. With a population of 90 million, this will continue to grow, thanks to per capita income rising more than 10 per cent over the past decade.”
She said it was expected that the number of Vietnamese earning a medium income of 15 million dong (Bt24,000) per month would increase from 12 million in 2013 to 33 million by 2020.
“The rise of middle-income earners will help propel demand for middle-to-upper-segment products and services, especially within major cities, because of higher purchasing power and metropolitan buying behaviour.”
Ekaridhi Patamasatayasonthi, director for international business development at Index Living Mall, said the company’s venture into Vietnam highlighted its marketing direction to tap into emerging CLMV (Cambodia, Laos, Myanmar and Vietnam) markets, aimed at strengthening its leadership position in the home-furnishings and accessories retail market in Asean.
“We have also underlined our strategic partnership plan to acquire more market share in the region,” he said.
Ekaridhi said the company planned to open its first Index Living Mall store in Manila in September via a joint venture with SM Retail, a Philippine business conglomerate in the shopping-mall operator, property-development, banking and retailing businesses. Index Living Mall owns a 30-per-cent stake in the joint venture, while the majority 70-per-cent stake is owned by SM Retail.
In Malaysia, the company last year opened its first home-furnishing store in Putrajaya via a joint venture with AEON Co. The company plans to open three more stores in Malaysia this year – in Kuala Lumpur in March, Kota Bharu in April, and Johor Bahru in the fourth quarter of this year.
Ekaridhi said Index Living Mall had six franchised stores in five countries, namely Malaysia, Russia, Maldives, Nepal and Vietnam. The company also has dealers in Myanmar and Laos.
In Thailand, Index Living Mall currently operates 25 stores in 17 provinces, of which nine are in Bangkok. The company plans to invest Bt470 million this year to open two new stores in Nakhon Pathom and Chachoengsao.
The company expects to post Bt10 billion in revenue this year and to grow its annual sales by 10 per cent over the next five years.
— BY KWANCHAI RUNGFAPAISARN