Thai duty-free giant King Power Group plans to spend THB10 billion (US$290.4 million) for business expansion over the next five years.
CEO Aiyawatt Srivaddhanaprabha says the budget will be used to open five branches in Thailand and overseas, bringing its total to 14 by 2021. The stores are planned for downtown in major tourist destinations, with Chiang Mai one location being considered.
The group will also join the bidding for a duty-free shop concession at U-Tapao International Airport, which serves Pattaya and Rayong.
King Power is also studying opportunities to open and manage duty-free shops at such Asean airports as Myanmar and the Philippines.
“King Power is set to become a top-five duty-free chain within five years,” says Srivaddhanaprabha. “Expansion both overseas and domestically will help grow our sales by 20 per cent to reach 130 to 140 billion baht in five years, on a par with leading duty-free brands in the US.”
The company is the world’s seventh-largest duty-free chain, with its sales of THB75 billion last year missing its target by THB11 billion because of weak spending by Thai tourists and a drop in Chinese tourists. Tourists from China, Thailand and other Asean countries contributed about 75 per cent of its total sales last year, and the group is aiming for sales of THB92 billion this year.
“Chinese tourists have rebounded, but are not back to normal yet,” says Srivaddhanaprabha.
King Power will allocate THB400-500 million to promote its business this year, and has already pegged THB100 million to place its logo on three Thai AirAsia (TAA) jets and put advertising inside more than 40 TAA aircraft. The group hopes the tactic will raise the number of shoppers at its branches by 20 per cent this year.
Meanwhile, King Power is ready to bid for a new licence to run a duty-free shop at Bangkok’s Suvarnabhumi airport when its present licence expires in 2020.
It will also allocate about THB2.5 billion to renovate its Rangnam branch in Bangkok, which will be closed for renovation from next month.