UK-based supermarket Tesco is Thailand’s biggest grocery chain and is now one of four companies bidding for the Thai assets of Carrefour, after the French giant took the tough decision to pull out of a number of Asian markets. In part, Tesco’s success is a victory for market research.
Carrefour is selling 44 stores in Thailand, 23 in Malaysia and two in Singapore, with a second round of bidding now underway and a tag of $1 billion discussed, reports www.economist.com
. In addition to Tesco, potential buyers are said to include French firm Casino, Berli Jucker PCL and Thai retailer Central Group. PTT, Thailand’s largest energy firm, has this week withdrawn after pressure from the country’s government.
Carrefour was one of the first foreign grocers into South East Asia in the 1990s, but Tesco appears to have adapted its offer better to local conditions and the needs of local consumers. When it discovered that Thai shoppers travelled miles by bus to its larger stores, it opened smaller ones in more rural locations, while Carrefour stuck to its Bangkok hypermarket approach. Tesco also worked with local partners, according to Kelvin Chan of Euromonitor, initially teaming up with agri-business CP Group in Thailand and Sime Darby in Malaysia and gaining valuable local knowledge helping with both promotion and store locations.
Carrefour by contrast ‘chose to go it alone’. It will now focus on its operations in China and Taiwan, find a partner in Indonesia and queue to get through red tape and make a start in India.
Tesco - whose relationship
with data partner dunnhumby
is a key plank of its leadership of the UK grocery market, has placed emphasis on market research in a number of new country launches, notably the move into the USA. Eighteen months ago Tesco pedalled back on the US roll-out
of its ‘Fresh & Easy’ stores and admitted its pre-launch market research there had missed vital clues about purchasing decisions.
At the time Tim Mason, head of Tesco’s US business, told www.timesonline.co.uk
the firm had made assumptions about not having to ‘go down and dirty on price’ and had perhaps been mistaken. The retail giant’s much-heralded pre-launch in November 2007 had included going into people’s houses and talking to them about food and food shopping, and even ‘poking round pantries’ but had missed vital clues elsewhere, it was believed. This notwithstanding, the retail giant evidently retains its faith in research, and the Asian success appears to be another reward for a company that seeks constantly to understand its customers wherever it goes.
Web sites are at www.tescocorporate.com