Can Grab, Singha's rise inspire more local Thai labels to break out in brand-conscious Thailand?

The $60 billion conglomerate CP (Charoen Pokphand) Group has held firm atop Thailand's local brand rankings for years now. Easily recognised by Thai consumers for its businesses ranging from agriculture to telecom, the giant has dominated this listing, with few companies or brands able to compete. In 2021 too, this trend continues and compared to last year, even fewer local players are visible. 

Across southeast Asia and even APAC, Thailand is a bit of an oddity as far as this part of Campaign's Top 1,000 Brands listing goes. While the pandemic struck, consumers in markets as diverse as The Philippines to Japan voted with their wallets and strongly backed local brands. However, in Thailand, we have seen the reverse happening; few homegrown names emerged when the survey asked consumers to name the "strongest local brands". 

Amidst these shifts, CP has continued to be a standout local brand. "Not only is the brand ubiquitously known, CP has played a significant role in driving Covid-19 relief efforts, including building a mask factory in five weeks to provide 3 million masks to doctors and nurses monthly since March 2020, and currently building a herbal drug factory that would provide and process herbs that could treat mild symptoms of Covid-19, amongst others," says Jacqueline Alexis Thng, partner and Asean lead, Prophet.  

Thailand's top local brands

• CP 
• PTT
• AIS
• Singha
• Siam Cement Group 
• Grab
• 7 Eleven

"While Thai consumers are increasingly supportive of local brands, there is still an underlying desire for global brands, as the country of origin and brand reputation could give consumers a sense of status and superior quality that local brands cannot adequately provide," Thng of Prophet adds. "Not only are products important, engaging consumers using the right channel is also key.  Nike, Michael Kors, and Under Armour have become some of the best-selling global brands in Thailand, by telling a compelling brand story and building strong emotional connections with their target consumers through a deep understanding of Thai consumers’ lifestyle and needs."

The challenge to building strong local brands is that Thai consumers tend to be less price-sensitive and more brand-conscious than their Asean neighbours, adds Thomas Sutton, general manager, SEA, Landor & Fitch. "They choose brands less based on price and more based on perceived quality and the assurance the brand will be known and approved by their peer group," he adds. 

In this year's listing, besides CP, the other local names in the list hint at the challenge of building noticeable homespun brands in Thailand. AIS, the insurer, delivery platform Grab and beer brand Singha are the newer brands on this listing, while Siam Cement is a solid rather than sparkly 108- year old cement maker and 7 Eleven is owned by CP. 

Sora Kaitkanarat, Initiative Thailand's CEO, contends that consumers live in the world virtually (and) the melting pot of origin is arguably less of a reason for brand preference. "Trust and relevantly inspired value are the magnetic reason for such preference," he says. "For instance, KFC has developed various local flavours to fire up the preference and engages in many local cultural activities to relive Colonel Sanders’ spirit in the local cultural context."

In this market, experts say that to be noticed, Thai brands need to rethink their plans to compete in the market and be inspired by the likes of CP and Siam Cement. "Local brands like PTT and SCG win over global brands in terms of brand heritage and positioning," says Prachawan Ketavan, senior strategy director, Superunion Thailand. "They build relevancy through infrastructure and particularly on brand heritage. We are already seeing rapid change in PTT portfolio to be more diversified and go beyond fuel to focus on sustainability and offer new products and brands to fit new consumer behaviour."

According to Thipayachand Hasdin COO GreyNJ United, local brands have been increasingly focusing on and gearing themselves to serve the needs of Thai customers. Thailand Twitter Trends Report 2021, for instance, reveals that sustainability, innovation, and social issues are the top three concerns, for Thai consumers.

The study also shows a significant shift in the marketing strategies that brands should make to embrace these values to keep their customer base loyal. "We have seen big local brands like SCG, PTT and Singha pushing their communications and following this with action to show the importance they place on these values," she adds. "They are making inroads into the sustainability and social community space which will hold them in good stead."

Sutton of Landor & Fitch explains that historically Thai consumers have always preferred international brands in categories where engineering, scientific or logistical excellence are drivers. Thailand’s role as a manufacturing and assembly hub have meant that to all intents and purposes some of these brands, while perceived as global, are able to provide service and pricing as if they were local.

One area where local brands could make a mark is in the area of food and beverage, where Thai consumers tend to gravitate towards local labels, say these experts. In this year's listing, two brands Grab and Singha have moved up, as they have been able to cater to local tastes and quirks. Grab, for example, pivoted its business from ride share to a burgeoning business for food and other product delivery, while Singha has been able to launch product variations to suit local tastes. 

"Whether these local brands will remain top-of-mind for consumers will depend on how fast they are able to respond to trends and create resonance with target consumers," says Thng of Prophet. "With growing digital engagements, the lines are blurring between global and local playbooks. The preference for global or local will depend on which brands remain more relentlessly relevant with the changing of times caused by the disruptive pandemic."