Competition on Convenience

CBRE, the leading international property consultant, reported that partly as a result of changes in lifestyle due to the pandemic, convenience has become an increasingly crucial factor in daily lives. Cashless payments, grab-and-go, delivery services, click and collect, virtual viewing of properties, and many other services, are aimed at improving convenience for customers. Sitting at the top of this list are the convenience stores that seem to be on every corner of every street, providing more and more add-on services to make life easier for consumers.

Ms. Jariya Thumtrongkitkul, Head of Retail, CBRE Thailand said, “The convenience store market in Thailand is dominated by two players who are still expanding strategically to increase their coverage. According to the Office of Trade Competition Commission (OTCC), as of 2021, CP Group has most of the market share, owning both 7-Eleven, with a market share of 73.60%, and Lotus’s Go Fresh (formally known as Tesco Lotus Express), with a market share of 9.45%. This is followed by Central Group which owns Family Mart and Tops Daily, with a combined market share of 4.79%, with the remaining 12.16% belonging to others.”

To stay ahead of growing competition in the market, convenience store developers have been trying to distinguish themselves with specific product offerings. For example, Lotus's Go Fresh added 10% more fresh food and ready-to-eat products to its shelves when compared with products sold at their original Lotus Express model, in an attempt to be in line with fast-changing consumer behavior. Makro has done something similar, opening several branches of Fresh@Makro, considered a Grade A convenience store offering premium fresh food to attract medium- to high-end spenders.

“We also see standard store sizes, which used to be as small as possible, now being extended, allowing stores to offer a wider range of consumer goods. Larger branches, at the same time, come with bigger and more convenient spaces for parking and installing electric vehicle chargers. 7-Eleven, for example, plans to expedite the installation of electric vehicle charging stations to reach 100 branches in the near future. BTS Group, the newest player in the convenience store industry, has introduced Turtle Shop, an in-station (in the paid area) convenience store and coffee shop, at Saint Louis, Phloen Chit and Victory Monument BTS stations, with the largest store being in Saint Louis station at over 200 square meters,” added Ms. Jariya.

CBRE Research found that while the convenience store model remained strong during the pandemic, acting as one of the most ideal choices in terms of convenience, more traditional stores such as supermarkets continue to play an important role, as products offered at convenience stores are often priced higher and are not available in bulk. Product differentiation to attract a wider range of consumers, i.e., more variety of brands, more sophisticated products, could also be considered based on target customer locations. With intense competition at present, convenience store operators should rethink their strategies carefully, not only to adjust products and pricing, but also to provide more innovative add-on services and continue growing to fit the needs, lifestyles and behaviors of shoppers moving forward.