Amid expectations of a livelier retail atmosphere this year than last, retail and wholesale operators in major regions of the country are working hard to plan various activities to stimulate spending during this year’s Songkran festival.
The Tourism Authority of Thailand (TAT) said it expects this year’s holiday period to be busier and more vibrant than last year, with up to 18.5 billion baht’s worth of revenue generated and domestic trips exceeding the level recorded in 2019 based on pent-up demand.
The TAT estimates the Songkran festival could generate 13.5 billion baht from domestic tourism based on 3.81 million trips, exceeding the 11.6 billion baht from 3.3 million trips recorded in 2019, while foreign tourism is expected to generate 5.03 billion baht, or 60% of the level recorded in 2019, with 305,000 tourists expected to arrive during the Songkran holiday week.
The latest survey conducted by the University of the Thai Chamber of Commerce (UTCC) also suggests that this year’s Songkran is expected to be busier than usual, as spending among the public has been pent up for a long time and most people see the country’s economy as undergoing a recovery, helped by a rebound in tourism.
Spending during the festival is expected to increase by 17.3% to 125 billion baht, up from 107 billion in 2022, according to the UTCC’s estimates.
The TAT plans to host Songkran events in various destinations, including Songkhla, Chiang Mai, Sukhothai, Phitsanulok and Pai in Mae Hong Son.
Jumbos join tourists to celebrate the Songkran festival in Ayutthaya province in a file photo during the Songkran 2017 festival, prior to the Covid-19 pandemic. (Photo: Patipat Janthong)
Chief among them is “International Amazing Splash 2023 @ Bangkok”, which gets underway on Thursday and continues through Saturday at Chula Soi 5, near Chulalongkorn Centenary Park. Highlights include traditional caravans from five countries, including one representing India’s Holi festival.
Likewise, retailers have prepared their own marketing activities and will offer a variety of related products during the festivities. These products include food sets for camping, as well as essential items required to fully enjoy the festival, such as water guns, protective glasses, waterproof bags and colourful clothing.
As many people tend to hold family gathering and parties during this time, retailers are also offering special promotions for air-conditioners, BBQ grills, paddling pools and water guns, as well as providing various fun water-splashing activities at most retail complexes, both in Bangkok and up-country. In addition, a variety of concerts are taking place at retail malls throughout the country.
Vorawan Phianlikhitwong, chief marketing officer at Ek-Chai Distribution System, the operator of Lotus’s hypermarkets, said that thanks to the government’s economic stimulus measures and the revival of the tourism industry, this year’s Songkran festival is expected to be more active both in terms of activities taking place and consumer spending.
According to an in-house survey by Lotus’s of 500 participants aged between 18-55 years old, 60% will celebrate the Songkran festival this year. Some will have parties at home with family members and friends, while others will join in water-splashing activities. In response to this news, Lotus’s has launched its “Summer Fun Campaign” from now until April 19, 2023, with over 1,400 goods made available under the promotion.
Central Pattana Plc (CPN), a SET-listed property and retail developer, has teamed up with the Culture Ministry, the Cultural Promotion Department, and partners including the Thai Beverage Group and Suntory PepsiCo Beverage (Thailand) Co to launch “Thailand’s Songkran Festival 2023” from now until April 16, 2023, at 38 branches of Central nationwide.
CPN plans to spend 100 million baht of the 400-million-baht budget it allocated for its summer campaigns during the Songkran festival.
“This marks the first time the company has launched a full-scale marketing campaign for the Songkran festival after the years-long Covid-19 pandemic. The company aims to use the festival as a form of soft power and aims to attract both Thais and foreigners to travel in Thailand throughout April,” said Nattakit Tangpoonsinthana, executive vice-president of marketing for CPN.
He said consumer purchasing power during the festival would be better than last year, with hotels in several locations being fully booked by both Thai and foreign tourists.
The company’s full-scale marketing campaign for the Songkran festival aims to attract short-haul tourists from Japan, Singapore, South Korea, Vietnam and Hong Kong, China.
“We also aim to put forward the Songkran festival as a world-class event to attract both Thais and foreigners to travel in Thailand throughout April and expect the campaign to boost spending throughout the country,” said Mr Nattakit.
Under its Songkran campaign, shoppers can enjoy music festivals featuring T-pop and K-pop artists and participate in many special activities and promotions with the chance of winning prizes. The company expects 1.5 million people to visit its 38 branches this year, a 20% increase over the same period last year.
Meanwhile, The Mall Group Co, one of the country’s leading retail operators, in collaboration with the TAT and other partners, has invested 200 million baht in the “Summer-Cation Shop Dai Ruang! [Shop for memorable adventures across Thailand]” campaign.
This initiative aims to stimulate the economy and boost spending power among Thai and foreign tourists by encouraging them to shop at The Mall Department Store, M Lifestore, Emporium, EmQuartier, Paragon Department Store, and online until April 30, 2023.
The campaign is expected to increase foot traffic at these shopping centres and department stores by more than 15% during the summer.
Voralak Tulaphorn, The Mall Group’s chief marketing officer, said she feels optimistic about consumer spending power this summer, particularly during the Songkran festival.
“The shopping atmosphere during the festival will be livelier than last year’s, and the retail market will be more active this summer than last year due to the resurgence in local spending power after the easing of the Covid-19 crisis,” she said.
She noted that many shoppers have started dining out, travelling and shopping again, and the number of foreign tourists has also continuously increased.
Ms Voralak expects sales from the summer campaign to exceed 5.8 billion baht and help increase foot traffic in shopping centres and department stores by 15%, resulting in a brighter summer and Songkran period than over the past few years.
Manufacturers have enjoyed stronger sales of beverages and air-conditioners though overall manufacturing in Thailand dropped this month due to the long holidays, particularly during Songkran, said the Federation of Thai Industries (FTI).
April is usually the month with the lowest domestic manufacturing as factories close for many days, but this is not a concern, said Kriengkrai Thiennukul, chairman of the FTI.
“We are not worried because many companies planned in advance to compensate for a pause in production during Songkran,” he said.
The Thai summer not only features an almost week-long celebration, but also marks a period of higher sales for some products.
“Beverages sell like hot cakes because of the hot weather. The recovery of tourism is also driving up beer sales,” said Mr Kriengkrai.
“Air-conditioner manufacturing also keeps expanding as the hot weather results in people requiring more units.”
Although Thai exports were projected to turn sluggish in the first half of this year, sales of air-conditioners overseas remain healthy, along with strong sales domestically.
Mr Kriengkrai said manufacturers of air-conditioners who export their products to India also found a solution to deal with the impact of a new regulation that bans the import of air-conditioners into the country.
New Delhi cited concerns over the safety of some refrigerants found in imported air conditioners.
Thai manufacturers decided to invest in India by building factories producing refrigerants that have already been approved by the Indian government.
Milin Veraratanaroj, the chairman of Tang Ngee Soon Superstore, one of the biggest traditional wholesale chains in Udon Thani, said despite the country’s full reopening and economic recovery, consumer spending power has not been as high as expected. A slight increase in demand is likely due to Thais with foreign family members and workers returning to the province to celebrate the Songkran festival, he said.
“During the pandemic, many of the small mom-and-pop shops that are our clients suffered losses and paused their operations for several years. They would need to take out bank loans to resume or expand their businesses,” he said. “Our end-user customers are still burdened with household debt.”
According to Mr Milin, his store’s business during the Songkran festival is unlikely to be as good as he had expected because no government spending stimulus packages have been launched during this period.
“Can you believe that even sales of basic items such as instant noodles are relatively slow and don’t meet the monthly sales targets of many wholesalers in Udon Thani and provinces in the Northeast? This indicates weaker consumer spending power in the region,” he said.
Mr Milin said people are spending less due to higher product prices and household debt. Following the reopening of many countries, Thai labourers are returning to work overseas in countries such as Korea, Taiwan and Israel, which required them to spend more of their money to reach their destinations.
Meanwhile, Amorn Phuthipiriya, deputy managing director of Thanapiriya Plc, the operator of Thanapiriya retail stores in the provinces of Chiang Rai, Chiang Mai and Phayao, said sales at her retail stores have yet to see any significant increase on a monthly basis. However, she noted that the shopping ambience ahead of this year’s Songkran festival was busier than last year.
To adapt to the slowdown in spending power, the firm adjusted its strategy by offering new must-have products during the festival. It has collaborated with consumer goods manufacturers to provide special sets for merit-making at temples, with basket sizes and prices starting from 199 baht compared with 299 baht last year.