India appears to top the list for Thai retailers who have begun focusing on the international market to expand their businesses.
Though Indian retailers have been facing opposition from small shop owners forcing leading conglomerate Reliance Fresh to close shop in several states, but, the huge market is what is attracting foreign retailers.
“You cannot get a more Greenfield market than India today in this part of the region and we sure are interested in setting up a department store there,” said Tis Chirathivat, Chief Executive of Central Retail Corporation of Thailand.
Central Group, Thailand’s largest retailing business, has already announced plans to enter markets such as India and Vietnam, and at one point was contending to buy Robinson Department store in Singapore.
Meanwhile, the company is seeking Thai government assistance to negotiate with India to open its service sector, which the Delhi government has been vigorously defending against foreign investors.
Commerce Minister Kamal Nath had said that services were a very sensitive area and it would be difficult to open up to foreign retailers.
“Look at your country,” he said. “There have been protests across the nation against hypermarkets, and that is when a majority of retailing is controlled by the modern trade in Thailand. But in India 97% of retailing is controlled by small retailers. Can you imagine what will happen if we opened our markets for retail?
“We have to make sure that we do not replace or displace these small retailers, but we have allowed freedom in the cash-and-carry type of stores,” Nath said.
Despite this, the two countries have been working on a free trade agreement that would open up various sectors in each country, and discussions about retailing have been considered.
Thai Commerce Minister Krirk-krai Jirapaet has admitted that such talks have taken place and that many retailers have strategic partners ready to invest in India.
“They want to know the progress of the Thailand-India free trade agreement and whether it involves liberalising the retail sector,” he had said.
Suthichart Chirathivat, executive director of the Central Retail Group, said Central needed more details on the liberalisation of India’s service sector to conduct a feasibility study on overseas investment.
Although it is too early to estimate the size of the group’s investment in India, markets with potential are Mumbai, Chennai and Calcutta, where demand for Thai goods is high, he had said.