As part of our look at Thailand's top brands of 2018, under the Asia's Top 1000 Brands report, we asked Thai consumers to identify their top home-grown brands. It comes as a no-brainer that Thai consumers picked CP as the strongest local brand, followed by oil and gas conglomerate PTT and Siam Cement Group. Here, four in-market observers discuss what’s behind the success of CP, and what it will take up uphold that status.
There are currently 10,760 7-Eleven outlets in Thailand, the highest outside of Japan (which has double the number), according to Seven-Eleven Japan, the operator of its eponymous convenience store chain that actually only owns 7-Eleven stores in Japan, Hawaii, Beijing and Chengdu.
The Charoen Pokphand Group, otherwise known as CP, is the operator of 7-Eleven in Thailand under its subsidiary CP All, besides owning stakes in a chain of high profile entities such as the telco operator True, as well as joint venture stakes in Tesco Lotus and Meiji. 7-Eleven stores are inseparable from the daily life of most Thai consumers where they can pay utility bills, purchase snacks and various CP-branded food items including fresh eggs, sausages and ready-to-eat meals. The operator has even received the green light from Thai regulators to offer simple banking services in the future.
Nielsen’s research points to CP as the most popular local brand in Thailand. What’s behind its appeal to Thais?
Jongkoch Dusittanakarin, strategic planning manager, GREYnJ United: CP is the largest conglomerate that owns many famous Thai brands that Thais know and use every day. The most well-known is 7-Eleven, which is also the biggest CVS (consumer value stores) in Thailand. We have seen many food ads from 7-Eleven and Thais go there daily so they are familiar with the brand and what it offers. Another notable point is CP Foods, which is also the monopoly supplier of chicken and eggs, the most common protein source for many Thais.
Phasit Nidchay, senior planning director, Dentsu Thailand: CP provides the complete loop of products and services that goes all the way from the supplier to the end consumers.
It is also a media owner and partners with many publishers, besides being a main sponsor for several national events, so its brand image is strong among Thais. From the food we eat to the convenience store we visit, to the internet service we use and the media we consume, CP covers many touchpoints, leaving a strong influence on Thai consumers.
Besides, unlike other big brands, CP is very well-perceived as a successful family business. Its legacy makes a good appeal for Thai consumers.
Edgar Salmeron, business and creative director, Neat Interactive: CP is ubiquitous and has a long history in Thailand. It is extremely entrenched in the people’s consumption patterns.
Preetanjali Kukreja, strategy director, Brand New Day Asia: CP seems to have a blanketed reach, across many industries. They have businesses that answer consumer needs (7-Eleven), to businesses that appeal to niche audiences (high-end real estate products). I think they know and deeply understand each of the markets they work in, and are able to answer current needs, while also being able to lead the market by pre-empting future needs and wants.
Besides the obvious market monopoly of CP, what are they doing that other local brands—or brands from elsewhere—are not doing?
Dusittanakarin: CP has conquered the market by adopting a multi-segment strategy. It is hard for other local brands to compete with them due to its sheer size. Their competitors instead compete with each other in every category by providing an alternative option to consumers.
Nidchay: What makes CP stand out is how it provides services throughout the supply chain and takes care of every stakeholder. As a conglomerate, it successfully communicates its social responsibility by providing quality products and a systematic process that contributes to the overall well-being of every stakeholder it is in touch with. For example, CP produces environmental-friendly fertilizers for farms and high-quality feed for live-stock animals that eventually helps it to cement its place as a well-regarded supplier of processed food items.
Salmeron: From a marketing standpoint, I don’t see it doing anything that other large Thai brands are not doing. They have the marketing budget to be ubiquitous, whether on TV, print, in-store or online.
Do you see CP’s future coming under threat from encroaching global or non-global players?
Dusittanakarin: CP has been in the leader position in the Thai food industry for a very long time. It keeps expanding its business units to sustain its position, through building a support system among the units so there has been no real threat as yet.
Its key position can be attributed to various factors: very strong products that fits the taste of Thai consumers, variety of choices, good pricing and communication strategy that keeps it being the “top of mind” of consumers by using the #1-star celebrity hashtag. Finally, CP has its own distributor network through the 7-Eleven stores which are located on every corner of the streets in Thailand.
All in all, CP is such a strong leader that any new players who want to join in the Thai market have to think carefully. In my opinion, they need to have a strategy that will meet a niche market offering new food items that have not been introduced by CP.
Nidchay: Considering its strength and mastery of the Thai market, I don’t see any major threat from non-local players. Its performance on segmentation is very efficient that each of the brand it owns can create product lines that caters to the different needs of the highly segment consumers.
CP is also leading in R&D, besides being active in its global expansion to the Chinese market especially. Therefore, its business will continue to grow and evolve in accordance to the changing needs of local consumers and any competitor in the future.
Salmeron: No, CP is a huge conglomerate with a growing international presence of its own.