Back in early September – well before the coup and subsequent events began reshaping Thai politics - I wrote two short posts on growing opposition to the expansion agenda of Tesco and other foreign-owned “supercentres”. Tesco is an easy and obvious target for commercial (and, to some extent, popular) resentment: for anybody who is aggrieved by a whole raft of disparate economic and social changes. The hardline anti-Tesco forces are, to the best of my knowledge, marshaled by other retail interests who can’t stomach the success of the Lotuses and Carrefours of the world.
My first post on this topic, titled “Thais Love Tesco“, garnered a number of interesting comments. They are worth reading to help plot the evolution of the ongoing backlash. For further clarification it might also be worth revisiting a related post-coup piece on “Tesco, the coup and the retail revolution“.
Back then I wrote:
But would this [organised opposition] be the death rattle for the nation’s love affair with air-conditioned mega-stores, whether foreign or locally owned?
I doubt it, I really do.
Tesco, and all the rest, have now outwitted, outplayed and outlasted both the Chuan and Thaksin governments. One would imagine they will outlive the military junta as well. Thais still love Tesco, even if Thaksin is on the nose. The retail revolution has been underway for almost a decade. It would take some unusual political will, and the risk of a popular backlash, to stand in its way.
For some time now, other events have dominated coverage of Thailand and Tesco has been largely off the news radar. Today an article in The Times brings the Tesco issue back and highlights its currency in the new legislative climate.
In part, it reports that:
The company has enjoyed huge success in Thailand where it operates 189 Express outlets mainly in Bangkok, 24 Supercentres in the capital and a further 32 in the provinces but has faced repeated criticism over “unfair” competition to local small operators.
Under the Thaksin government the Commerce Ministry had postponed a ban on Tecso’s expansion but since the coup, pressure for action has been building from groups such as the Opposition to Multinational Business Union. Co-ordinator Panthep Suleesatira, says “the invasion” by foreign retailers had destroyed communities.
Tesco’s future is expected to be considered next week when the junta-controlled government also votes on amendments to the Foreign Business Act, which could force thousands of international companies to change their shareholding structure.
A warning from the President of the Joint Foreign Chambers of Commerce in Bangkok concludes The Times‘ interesting overview.
The relatively critical tone of this report contrasts sharply with something I dug up from the archives of The Times. In an article headlined “Thailand without Tescos“, Ginny McGrath recently wrote, with indignation, that:
There’s a Tesco in Ko Samui, that palm-fringed isle in the Gulf of Thailand. In fact, there are over 200 Tescos in Thailand. In my book that’s paradise lost, but scratch the surface and the supermarket giant hasn’t completely swamped the slender south east Asian country. In fact just a few miles from Thailand’s most touristy resorts, sunburn, sarongs and supermarkets subside, makeshift cafes line the road and rural Thailand still flourishes.
Ginny proceeds to give an account of her holiday organised, my emphasis added, by “a British company that specialises in Thailand offering tailor-made holidays focussing on authentic experiences and interaction with hosts”.
…But I digress…
With increasingly pugnacious comments emanating from the junta over the past few weeks, and some uncertain responses to recent events, is Tesco just the spark to start re-uniting the people behind the military and the coup-lords?
Foreign-owned and aligned businesses are often an easy target for fearful administrations. If the junta really goes after Tesco, and all the rest, a whole new chapter of Thai social and political history may be about to begin.
Back in September, I speculated on this point:
In the context of their many other “tough love” measures, it would make sense if the military regime was to now clamp down on foreign retailers, including Tesco. Bigger, better and more extravagant shopping ”experiences” may even, in some (soldierly) eyes, symbolise the excesses and waste of the Thaksin era.
As we continue to learn more about the coup, its backers and the powerful elites that are driving political events, I wonder how much some of my original thoughts on the anti-Tesco agenda need to be revised and updated.
Your comments on this lightening rod issue are, as always, very welcome.
6 responses so far ↓
1 Jon Fernquest // Jan 6, 2007 at 2:08 am
Carrefour (at least Phra Ram Si) has made a much better effort to create an inviting eating and shopping area beneath the big store itself. It remains open late and is even a nice place to hang out and read a book. Lotus? Yuck. Except the big store itself is bigger.
Take the Maesai Lotus as an example of hypermart impact on a local economy. The people who live in the villages love the cheap prices. The owners of shop fronts who used to charge exorbitant prices for table fans and home appliances to poor people without a car to drive to Big C in Chiang Rai? They don’t like it, of course, and they know how to organise and make a big stink. But the poorer people who benefit, are they going to politically organise?
Lotus effectively redistributes to poorer people in small towns like Maesai, except Lotus profits leave Maesai ultimately, unlike the shop front owners who do nice things like sponsor free aerobics at the Chinese temple across from the Shell Station.
Jo Jo’s restaurant in the middle of all those shop fronts on the main street sold for, I heard, 20 million baht with knowledge that they Lotus was opening. The shop fronts are obviously going to shift to other products. Gold stores? If Lotus starts opening 7-11 like stores in the mu baans though, that will step on poorer peoples’ toes.
BTW here is a permalink to the BKK Post editorial referred to in that previous blog entry:
http://www.readbangkokpost.com/business/retail_and_consumer_credit/stop_retail_innovation.php
2 Preetam Rai // Jan 6, 2007 at 5:08 am
I did not know that there was opposition to such outlets. In India there is a discussion on to allow such outlets and I was about to post a blog entry highlighting (in my observation) the sucessful co-existance of small roadside shops and biggers superstores in Thailand.
3 Colum // Jan 6, 2007 at 11:40 am
The nature of us observing whether or not people prefer cheaper prices or local business is not relevant in the context of how the developing developed world communicates with the junta in my opinion, for the same corporate dominance situations are occurring here too.
That Tesco etc are from the West lends to our en mass identification with them and therefore, to what extent does the potential rejection by the junta and cronies for the corporate masses translate to our own cultural and idealogical rejection?
Surely perceiving what is occurring in Thailand as regressive will only isolate Thai communication with the cosmocrat further and increase ideals which have seldom resulted in a balanced, rational exchange.
4 Jon Fernquest // Jan 6, 2007 at 2:53 pm
The value of any retail business is going to be affected by the intrinsic value of the location and quite shrewdly they’ve built a night bazaar in the middle of Chiang Rai’s downtown which upped the value of all the real estate there. Edison, the old department store downtown, that you might expect to be displaced by superstores, just opened a TOPS franchise inside the store itself!
5 anon // Jan 6, 2007 at 9:33 pm
Tesco is the best, followed by Careefour, and trailing way behind is Big C. Big C allows pickles to be sold in the supermarket, stinking the whole place up! Really disgusting to shop there. And the top floor is always disorganized and messy.
Mom & pops provide no realistic competition – in terms of price, stock, and convenience, the megamarts (both local and foreign owned) are by far superior.
6 Johpa // Jan 7, 2007 at 5:21 am
As a retail store owner myself, I do not see the trend towards large transnational mega-stores being derailed, least of all in Thailand. These stores do provide significant savings to the lower economic classes who have the ability to reach them. Here in the US, I can bitch about Walmart to ny heart’s content, but the reality is that for the majority of people, Walmart signifies a lower cost of living. For the US government that implies a lowered chance of social unrest due to economic hardship and helps maintain the status quo. And if nothing else, in Thailand all parties, coup, anti-coup, and in-between, all wish to maintain the status quo above all else. In Thailand, the only time we are likely to see significant opposition to these “foreign” stores is if it is needed in the future to deflect attention away from the already non-Thai dominance of the economy and the already substantial diversion of profits, both legit and gray market, offshore. I just don’t see that happening in the near future.
Also, as a small shop owner myself, I admit that on many items I can not compete with the large mega stores. I try to avoid competeing on products, but occasionally the big stores step on my toes and begin to sell a product for just above my cost. This does not mean that I was “charging exorbitant prices” but only that my costs were exorbitantly more expensive than the mega-stores costs for selling the same item.
So there are both positive and negative aspects to the trend of the mega store. They do provide economic benefit to those most in need although they provoke angst amongst those who are often least affected by the economics and who prefer the small town “feel” of their local environment. (Nearby me in the US there is actually a local Walmart that is being prevented form opening, it is built and even partailly stocked, as a result fo a lawsuit; but the town is primarily occupied only in the summer time by vacation home residents who spend most of the year in more distant urban areas.) The downside is that these stores do hasten the inevitable exodus of capital out of the area. The negative downsides tend to be more social than economic as the traditional business districts are inevitably eviscerated and the sense of local community is weakened.
Ah, the continued corporate socialization of America and the rest of the world. I know I can sleep better knowing that all my neighbors are wiping their arse’s too with Kirkland band (Costco) toilet paper.
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