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2013-08-27

FamilyMart Thailand’s New Market Strategy
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FamilyMart is literally rolling out new store locations to cover smaller communities where they have no existing presence.

Central FamilyMart Co, the main local operator of FamilyMart convenience stores, is exploring new market opportunities amid fierce competition by offering a mobile store format to boost its customer base.

Mr Nath (pictured above) shows the FamilyMart truck that will carry 300-400 products into areas without the company’s convenience stores. Other plans include fostering more of a Japanese ambience in the stores themselves to differentiate them from rivals.

Chief executive Nath Vongphanich said two FamilyMart mobile units, one each in Bangkok and Pattaya, are open now, with a new one slated for Phuket in a few months. The mobile unit will go to communities.

“The mobile unit is also a marketing weapon as it’s an efficient transit media to attract customers’ eyes,” he said.

The company has also introduced five to six FamilyMart kiosks with 20-30 square meters of space in hospitals and public parks.

The chain has nine store formats including residential projects, commercial areas, tourist destinations, schools, and the Skytrain.

It offers fruit at its stores and plans to add vegetables and some fresh foods in the near future. More Japanese-style products will be added soon, raising the proportion of its Japanese items to 30% of the total in five years, up from less than 10% now.

“We will foster more of a Japanese ambience at our stores, differentiating FamilyMart from our rivals,” said Mr Nath.

The company plans to open 240 original-size stores this year, with 101 branches already opened and 139 slated for the second half.

The majority of additional stores will be company investments, but it will focus on opening new stores via franchise next year.

The operator expects total FamilyMart stores will reach 1,000 by year-end.

Sales at FamilyMart stores are expected to rise to 14 billion baht this year. In the first half, sales grew by 18% as expected. Though consumers have higher household debt, this did not affect its business because it sells daily essential goods.

Our Thoughts

This seems like a really solid strategy FamilyMart has for one of its largest markets in Asia. Although it’s not the first time a grocer has gone mobile (the vehicle kind, not the cell phone variety), FamilyMart seems to have a stronger focus on truly covering more of the market to gain share.

With a mobile fleet of stores, FamilyMart will have, in essence, a more flexible store network to cover areas incapable of supporting a full-size store. When those areas do become capable, they can then move their mobile stores to other areas.

Peapod, a division of Ahold USA, rolled out a mobile unit in the US earlier this year. Freshmobile, another mobile grocer to hit the streets last year, sports a large air-conditioned trailer with fresh variety.

Although other grocers have launched their own mobile units, they tend to be more focused on brand recognition and the integration of technology rather than a true stab at covering more of the market. They seem rather gimmicky and non-scalable.

FamilyMart, on the other hand, with its 21 years in Thailand, has the experience and market intelligence to expose its new mobile fleet to higher potential.

Next time I’m in Thailand I really hope to come across one of these units.