It may not be apparent to most Thai people, but Sahapat Group’s products are probably entwined with their everyday lives. Mama noodles, Mont Fleur bottled water and Pao laundry detergent are all examples of the 70 year old Thai conglomerate’s most popular products.
These brands, including many famous others, all fall under the umbrella of Saha Group, making it Thailand’s leading FMCG company. In 2016, the company made approximately $965 million, bypassing expectations and recording 13% growth in sales from the previous year.
As Thailand’s FMCG market slows offline but presents opportunities online, international brands such as Unilever and P&G are pushing Sahapat to innovate.
In Thailand, it is well known that Sahapat’s core customers are practical, price conscious shoppers. Their necessity products are sold at every supermarket, hypermarket and convenience stores across Thailand.
Sahapat relies heavily on offline marketing, and most notably, special promotions such as giving customers the chance to win gold by buying water at 7-11.
But times are changing and Sahapat is using data to understand behavior patterns across consumer groups and areas across Thailand.
Prior to Sahapat’s newly inked MOU with Lazada Thailand in June, the company was selling in bulk online through Sahapatdelivery.com. It generated over $1 million in revenue, a small fraction of the company’s total earnings.
The website succeeds in showcasing an understanding of its key demographic; discount driven, working-middle class consumers who prioritize practicality and value when shopping for household items such as fabric softeners, through its bundle deals exclusively online.
The manufacturing and trading conglomerate believes that through its MOU with Lazada Thailand, sales contribution from ecommerce will enter double digits within three years from less than its current 1 percent.
The company is also planning to invest $29.5 million to build a new inventory warehouse dedicated to ecommerce.
The Nation reports that Saha Group concedes “it had been mishandling its online shopping business for almost 10 years.”
“If we do this online shopping further on our own, it will be quite difficult for me to provide good service to our online customers,” Boonsithi told newspaper.
By working with Lazada, Saha could export its products beyond Thailand to other markets in Southeast Asia as well as China, he said.
In 2016, the company made an aggressive push in logistics by implementing a more technologically advanced system through upgrade IT software systems and a team of logistics specialists to overhaul its operations. This was a layer on top of the 71 smaller distribution centers and 240 vehicles across the country.
The purpose? To know right away what stock needs replenishment, and what products are under performing in which provinces.
Sahapat has long been a leading player in FMCG, but with intensified competition from global players, they cannot enjoy staying idle or relying on the same offline strategy to remain top of mind.
With shifting consumer preferences, Sahapat is slowly but surely acknowledging the importance of a wider distribution network, localized marketing campaigns and partnering with one of the region’s biggest ecommerce marketplaces to accelerate growth.
But as Sahapat makes its way to becoming a company of the future, they must also be mindful of maintaining its main bulk of revenue.
“Thai shoppers still prefer to buy goods offline, especially elderly consumers who are not familiar with ecommerce. They need to look at|and try out products physically before buying.”