Tuesday, June 24, 2008

Thai businesses urged to focus on rich Chinese

ENTREPRENEURSHIP

SOMPORN THAPANACHAI

Thai small and medium companies should aim to tap the upper-end Chinese market, which is expected to grow significantly in the next decade, said the market research firm Investment Trading Development Centre. The centre's director, Phusit Phensiri, said research done to forecast the economic structure of China in 2020 indicated that the number of rich Chinese would grow from 11% of the population to 23%, or more than 200 million people.

Another group set to expand is the ''metro-life'' population, which is 20- to 30-year-old singles in Chinese families who would normally get support from their parents and grandparents. The centre estimated growth by 10% per year to account for 21% of the total population in the next 12 years.

Mr Phusit said Thai companies should target both groups as they had high purchasing power and strong growth potential. The centre estimated that the Chinese market would be more stable in 2020 so dynamic growth would happen before that year.

''These are the clear target groups which Thai companies would be able to grow with the market,'' he said.

The completion of a highway from Kunming to Thailand would open opportunities for Thailand to explore trade, investment and tourism with China. The full liberalisation of the Thailand-China Free Trade Agreement in 2010 is likely to enhance the business opportunities along the route.

In Kunming, the Thai government has supported Kunming-Thai Cultural & Trade Centre Co to establish and manage a distribution centre, scheduled to open in September.

The centre would be developed with approximately 1.2 billion baht in investment,. Its first phase, on the first and second floors with 5,000 square metres of retail space, has been leased to Thai companies to offer farm products, gems and jewellery, home-decoration and fashion items.

The lease contract would be signed soon between Kunming-Thai and major investors including Talad Thai Market, the Thai Gems and Jewelry Association, Narai Phand Group and some traders. The spaces would be taken up by small manufacturers.

The second phase, on the third to fifth floors with 12,000 sq m, has been leased out to Chinese traders for one year. It would be converted to space for more Thai companies after the contract with Chinese tenants expire. The sixth floor would have a high-end Thai spa and a Thai pavilion to showcase heritage from Thailand.

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