What: Central Group adds a new activity to its retail ventures: wholesale B2B business.

Why it is important: Diversification is a way to ensure dominance when it comes to final customers when a retailer becomes a cultural brand

Central Retail Corporation (CRC), a major Thai retail conglomerate, is entering the wholesale market with its new venture, Go Wholesale. This move is seen as a direct challenge to CP Axtra, the parent company of Lotus's and Makro, which is currently the dominant player in the Thai wholesale market. CRC plans to open over 40 Go Wholesale units in the next five years, starting with a large store in Srinakarin, followed by another in Chiang Mai, and more in Pattaya and Amata City.

Go Wholesale differentiates itself from Makro by being member-based (currently free membership) and primarily targets customers in the HoReCa sector (hotels, restaurants, catering) as well as food providers in institutional settings. CP Axtra, with its Makro stores, is a strong competitor, operating 164 units and generating significant revenue and profit in the Thai market.

CRC is not solely relying on wholesale for growth. The company anticipates a boost in its retail sector from recovering tourism, expecting 30 million international visitors to Thailand by year-end. However, challenges such as a downturn in tourism compared to pre-pandemic levels, a residential real estate crisis in Vietnam, and a slowdown in external trade impact CRC's diverse operations, which include fashion and hardline sales through Robinsons, Central department stores, and Nguyen Kim appliance stores.

Despite some areas of concern, such as a slight decline in food sales and the impact of rising interest rates on big-ticket purchases, CRC's problems are viewed as cyclical rather than structural. The company remains optimistic about its growth prospects, buoyed by its robust retail model, vibrant mall business, and the new wholesale venture.

In for a penny, in for a pound: Thailand’s Central bets big on wholesale