Central Group eyes 15% online sales

By BLOOMBERG

BANGKOK • The company with the biggest grip on Thailand’s brick-and-mortar retail market is expecting a partnership with China’s JD.com Inc to help it do the same in online sales.

Central Group, which controls Thailand’s biggest operator of shopping malls and department stores, expects online sales to account for as much as 15% of its revenue in five years, from 2% now.

The partnership with JD.com will help it compete in South-East Asia’s booming e-commerce market and also open up businesses opportunities in China, CEO Tos Chirathivat (picture) said in an interview.

With an empire that also includes hotels, supermarkets and restaurants, Central Group is counting on online growth to help drive sales.

The company first announced its US$500 million (RM2 billion) joint venture with JD.com in September, teaming up with China’s second-largest e-commerce operator.

Chirathivat estimates that online retail in Thailand could rise fivefold to 10% of the market.

“We obviously want to be the leading player in the 10% so it doesn’t really matter what kind of percent of the group it is,” Chirathivat said in the Jan 3 interview at his Bangkok office.

“The important thing is to be the leader in the market itself.”

Central Group and JD are competing in an increasingly crowded market, with Alibaba Group Holding Ltd expanding in South-East Asia through Lazada while Amazon.com Inc kicked off with a beachhead in Singapore last year.

South-East Asia is home to more than 600 million people and the region’s Internet economy, which includes e-commerce, online travel and ride-hailing, may grow fourfold by 2025 from an estimate of US$50 billion in 2017, according to a joint research report by Google Inc and Temasek Holdings Pte Ltd.

Central Group is targeting annual revenue growth of 13% in 2018 based on the company’s five-year strategy plan, said Chirathivat.