ABSTRACT
Thailand is primarily an agrarian country with roughly 65 million inhabitants, and approximately 12 million residing in the capital, Bangkok. A democratic monarchy, the economy was considered to have the fastest growth rate in the world from the period of 1986-1997, and remains one of the fastest growing markets for food retailing in Asia. It has thus been an obvious destination for international retailers seeking global growth. However, the expansion of these firms has not been straightforward. Jusco was the first to launch a superstore format, in 1985, followed by Makro's big box cash and carry format in 1989 (partnered with CP). Lotus, by the CP Group, opened their first hypermarket in 1994, and later partnered with Tesco in 1998. Other investments into hypermarkets included Carrefour in 1996, Auchan in 1997, and Casino joining Big C in 1999. Casino ended up taking over Auchan's stores after their lack of success in the first two years. Royal Ahold (Tops) entered in 1995 but sold out to its local partner in 2004. Delhaize (Foodlion) entered in 1997 to compete with the three existing local supermarkets (Villa, Foodland and Home Fresh Mart) but quit the country in 2004. For the majority of these players, store expansion was the primary objective, leading to a rapid and massive increase in stores, as well as foreign direct investment (FDI) and a shift in the balance of traditional and modern trade. Regulation in Thailand was initially lax, allowing retailers to expand at will for several years. Many emerging markets, including Thailand, are seeing transformations in 10-20 years, which took 50-80 years in the US and Europe (Reardon 2006). Such growth eventually puts the modern trade into positions of conflict with both the traditional trade, and also their suppliers. Politicians and activists for the traditional trade have rallied repeatedly for the government to impose stricter regulations, with limited success. Regulation has not been easy to implement for various reasons, aside from slow bureaucracy: the government not wanting to affect foreign direct investment, not wanting to be perceived as unfair, and wanting to be sure that regulations actually yield benefits to both consumers and traditional traders. Thus, in the face of such rapid retail transformation, this study seeks to investigate situational factors that have come to shape the retail landscape in Thailand over the past decade, namely regulation and consumer culture.
