International analysis: Casino hopes to take top spot in Thailand with new stores

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French retailer Casino has ambitious plans to triple its number of locations in Thailand by 2016, when it hopes to operate 1,250 stores.

The French retailer aims to triple its store network in Thailand by 2016

Within the next three years, Casino expects to run 300 Big C hypermarkets and 950 smaller shops, primarily under the Mini Big C banner.

The push is being driven by the growth opportunities available thanks to the market’s recovery from the 2011 flood crisis, and the Thai Government’s economic stimulus, which includes a rise in the daily minimum wage.

Funding for this aggressive expansion is likely to come from profits generated from domestic activities. Already on a par with its nearest rival Tesco Lotus when it comes to hypermarkets, Casino is now focusing efforts on smaller stores and multichannel retailing in order to gain the top spot.

Casino has been far more proactive in exploiting the potential of ecommerce in Thailand. Online sales accounted for 5% of revenues in 2012, representing an impressive 500% year-on-year growth rate.

A mobile app enables customers to collect and pay for their purchases in more than 112 stores, or have them delivered.

Its plans to expand ecommerce activities remain well ahead of Tesco Lotus, which only introduced a website in the final quarter of 2012.

Casino has also been ahead of the game in introducing multichannel offers, opening a drive format at Big C Extra in the last quarter. Shoppers have responded so well to this initiative that the service is being expanded nationwide.

Its attention has now turned to smaller store formats, where growth remains relatively untapped for Casino.

Convenience stores at Bangchak petrol stations will offer the retailer a huge advantage over rivals as it aggressively expands other smaller-sized retail concepts. By pursuing a flexible format strategy and focusing on smaller stores providing a full grocery shop, Casino is likely to outperform Tesco in terms of growth.

Carrefour’s exit from Thailand has left Tesco Lotus and Casino to battle it out for supremacy in what is a very challenging market. Although Tesco Lotus holds the number one position and continues to grow rapidly, by flexing its formats, focusing on convenience stores and providing a true multichannel offering, Casino is starting to
nip at Tesco Lotus’ heels and could even overtake it in the next few years.