Endo Gen. Diversifying Retail and Distribution in Thailand. Chiang Mai: Silkworm Books, 2013, xii+275p.

Abstract

Diversifying Retail and Distribution in Thailand Endo Gen Chiang Mai: Silkworm Books, 2013, xii+275p.Once again, Thai studies need a determined Japanese researcher to unearth the puzzling research areas that are plagued by limited data, poor statistics, and mistaken presumptions. A comprehensive account of the retail and wholesale industry has been rare, despite this industry being Thailand's second largest sector by constituent ratio of GDP and employment.This book by Endo Gen provides a thorough understanding of Thailand's retail, wholesale, and distribution systems. It gives a historical background of the business with a focus on the dynamics since the 1990s-the period that has unleashed the trade, such as cash- andcarry, hypermarkets, supermarkets, and convenience stores, throughout the country.Chapters 1 and 2 present the historical background and characteristics of Thai retailing, which, until the 1980s, had been overwhelmed by small-scale grocery stores (cho huai) or the so-called shophouse, a one-story shop with a dwelling over the top. While there is no strong argument within these two chapters, I find them insightful for those who want to understand the evolution of the sector. In addition to the general structure, the author traces today's major players, such as the Central Group and Saha Pat, back to their origins. Competition and coordination among them are addressed and put into contextual settings extremely well. The investment and consumption booms of the late 1980s led to the advent of new retail formats and fiercer competition. The succeeding chapters develop the arguments of the book, capturing the contemporary and situation of the industry.Chapter 3 discusses the 1997 financial crisis and the massive influx of new retail formats introduced by multinational companies. The author conceptualizes post-1980s Thailand's consumer market as a structure that possesses significant disparities among geographical areas and income strata. He then argues that this mosaic is the main explanation for why retail and distribution firms in Thailand must adopt diversification strategies (pp. 38-46) and why Bangkok-based and provincial department stores competed to open new stores in provincial cities, which led to excessive competition (p. 63).Chapter 4 poses an important question: Have new retail formats really heralded a distribution revolution? As the 1997 financial crisis created the opportunities for new, foreign-led retailers, particularly hypermarkets which sell daily foods and necessities at lower prices, the change in the retail and distribution sector looks so immense that most observers would call it a revolution. Nonetheless, Endo argues that the revolution has yet to come. Things have been changed, for sure. From a long and complicated chain of distribution networks, the modern retail formats now deal directly with manufacturers, with an increased relative bargaining power of the former. The distribution and logistics systems have been improved, have greater efficiency, and are equipped with better information technology. Commercial practices, such as the payment systems, have been considerably modified, too.Yet, given all the above changes, the author argues that we should not call it a revolution, for a number of reasons (pp. 128-129). To begin with, the biggest players in the market, that is, hypermarkets and cash-and-carry stores, have achieved growth mainly from expanding their number of stores. However, doing so is becoming increasingly difficult over time. The active expansion into provinces via smaller-size stores of these modern retailers has caused managerial problems in their logistics management. Another modern retail format, the supermarket, has also struggled to develop its own unique competitive advantage and has suffered managerial problems, low profitability, and high operating costs. Likewise, convenience stores have not succeeded in establishing themselves as an important retail format and have had no significant impact on the distribution system, as initially expected. …