Chiang Rai Family Market “Thanapiriya” Success Story
CHIANG RAI – Thawatchai Phutthiphiriya, managing director of Thanapiriya Plc told reporters that they will be the first ever local “mom and pop” store in Chiang Rai to raise funds from the public for business expansion in response to a fast-growing demand for consumer products from Asean in the wake of the region’s incoming single market.
“The proceeds of the funds will be spent on the construction of a new distribution center to serve its expansion of 55 stores in the next seven to 10 years, including branching out with three new stores next year,” said Thawatchai Phutthiphiriya.
He said the target market apart from domestic consumers was tourists and foreign residents from Laos, Myanmar and southern China. The company was also able to cash in on Chiang Rai’s strategic location as a gateway to those countries.
Thanapiriya is one of only a few family-owned-and-operated traditional trade survivors after the encroachment of giant international supermarket chains over the past two decades. Had it not been for the diligence of Thawatchai, the oldest son and second generation of the “Phutthiphiriya” family, his family’s grocery store would have closed down like the other 50 stores in Chiang Rai.
More than 25 years ago, Thawatchai made the decision to keep his family business after he was faced with the threat of closure with the arrival of the new global players.
Big C super store is the first international modern trade that has entered into the retail market in Chiang Rai since 1998, followed by many more from Tesco, Tops, Makro and 7Eleven for a combined 28 stores currently.
Thawatchai decided to use the Bt300,000 in seed capital and Bt3 million bank overdraft his father had secured to change the grocery store into a mini-mart, and that was a turning point for the business.
Nowadays, Thanapiriya is a modern shop with a sizable market share and competitive prices compared to its giant retail rivals. It now has 12 retail and wholesale stores with a variety of consumer products and over 15,000 stock-keeping units covering five of 18 districts in Chiang Rai. The company employs about 700 staff in total and also has its own warehouse and logistics transport operation.
Thawatchai told the Nation that the company enjoyed a compound annual growth rate of 12.9 per cent over the past three years from 2012. Last year, the company posted Bt45 million in net profit with a net margin of 3.8 per cent on revenue of Bt1.2 billion. While, the debt-to-equity ratio is only 0.5 per cent.
He said the new distribution center with 8,000 to 10,000 square meters of space was set up to serve the Thanapiriya supermarkets, which are located in the suburbs.
Thawatchai said the key to success was learning from the mistakes of rivals and making their weak points become his company’s strong points. Now his stores look like a mix between convenience stores, supermarkets and cosmetic stores.
“Whatever is available at modern outlets, is also available at Thanapiriya,” Thawatchai said, adding that it provides customers with wholesale services via a call centre and it delivers products to the customers’ door.
“There is still room for pricing solutions, making items cheaper than those on the shelves of larger modern stores,” Thawatchai said.
He said he wanted to see Thanapiriya become a role model for other “mom and pop” stores to restore their businesses, conquer the large modern outlets, and remove obstacles in accessing capital by raising funds from the capital market.
Under the listing plan, Thanapiriya has increased its paid-up capital from Bt150 million to Bt200 million by issuing 200 million new shares at a par value of 25 satang each for the public. After the IPO share sale, the Phutthiphiriya family is expected to dilute its shares from 96.7 per cent to 72.5 per cent.
The company scheduled its subscription date for its initial public offering (IPO) shares this week and trade on the Market for Alternative Investment next week. The IPO price ranges from Bt2.20 to Bt2.50 per share given by five co-underwriters.
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