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AUG2017 FOOD FOCUS THAILAND
SURF THE AEC
ข้อมูลเพิ่ มเติม/Additional Information
1 จากข้อมูลของสถานเอกอัครราชทูตไทยณกรุงนิวเดลี
1 Data from theRoyal Thai Embassy, NewDelhi, Republicof India
2 MitraS. (2008), Logistics Industry: Global and IndianPerspectives.
3 จากข้อมูลของ IndiaBrandEquity Foundation (IBEF)
3 Data from the IndiaBrandEquity Foundation (IBEF)
4 จากข้อมูลของศูนย์บริการข้อมูลธุรกิจไทย-อินเดียสถานเอกอัครราชทูตไทยณกรุงนิวเดลี
และประชาชาติธุรกิจ
4 Data fromThai-IndiaBusiness InformationCenter, Royal Thai Embassy, NewDelhi,
Republicof IndiaandPrachachat.
once Indiabecomesasinglemarket, thesebusinessescanbuildcentral
warehouses tobettermanagestocksandmoveaway from theprevious
model of havingmultiplesmallwarehouses invariousstates,whichwas
difficult to forecastdemandand tomanage inventory.Fromsuch factors,
theGSTsystemshould inpartsupport foreignfirms tobeable tocompete
with local firms.
• Several consumer products will be levied a lower tax rate than
previously. Under thenew systemgrainsormilk, whichwerepreviously
being charged a tax rate of 5%, will now be exempted from tax. As for
soap and toothpaste, theywill be subject to a tax rate of 18%, which is
lower from its previously level of 22-24%. The new tax system will
therefore cut prices of a range of consumer products and in turn
encouragemore household spendingon these goods.
• Processed food and beverage is a product that Thai businesses
haveexpertisemaking itapotentialproduct forThaibusinesses.Although
several large foreigncompanieshavealreadyentered the Indianmarket,
there is still a window of opportunity given its large and fast growing
consumermarketand thatup to50%of themarketshareof theprocessed
foodmarket iscurrentlyoccupiedbysmall, local players3.ThenewGST
systemwill easeentryofThai business to into themarket, allowing them
todistributeproducts tovariouscities in Indiaasa trial run, for instance.
Thai firmsmaypreviouslyhadbeenatadisadvantagecompared to local
firms as expensive logistic cost may have caused Thai imports to cost
more than local products.Moreover, Thai firmsdidnot haveasgoodan
understandingof thedifferent regulations ineach local stateas their local
competitors.ThiscausedThai firmsdeciding to invest inamanufacturing
plant in India to struggle in finding optimal location taking in to account
cost indistributingproducts tovariouscities.Under thenewGSTsystem
such obstacles are now removed and therefore bringing about new
opportunities toThai firms.
• It is necessary to adjust products to fit with Indian consumer
preference, a requirement Thai firms can easily meet. Dutchmill, for
instance, isaThai firms thathas forsome timeentered the Indianmarket
andhasbeenworkingwith local firms inbuildingamanufacturingplant.
Thecompany launchedanewyoghurt drinkbrandcalled “MistaTwista”,
factoring in local language and culture in the name. The tastewas also
adjusted by lowering sourness that is more preferred by the local
consumers. When Charoen Pokphand opened its Five Star Chicken
branch in India, the company added fried chicken masala to its menu
andadvertised inBollywood-styleMVs tobuild its presenceamong the
younger Indianconsumergroup.Srithaialsochanged itsdesign tobetter
meet with the local preferences and was well received, becoming a
popularhousehold itemamong Indian families4.Furthermore,ethnic food
preferencesof Thaisand Indiansaresimilar thereforeadjusting recipes
is easily achieved. Products made from beans and snacks, herbal
products,dried fruits, frozen foodandspicesaresomeexampleproducts
that can exported to India. Alsomany Thai firms are already compliant
toHalal standards. Althoughmany of the aforementioned products are
already being exported to India, their share only account for less than
1% of Thailand’s food exports.
Undeniably, India will become a key driver of global growth in the
decades tocome.Business involvedwith logisticsandconsumerproducts
aremere examples of businesses that canprofit from this tax reform in
India. Thus, other business groups should also keep close watch for
opportunities in India. It is now the time Thai investors need to build a
better understanding of thismarket so to not miss timely opportunities
for investment.