Executives envision 2022 outlook
While 2021 was full of unexpected challenges from the pandemic, the Bangkok Post has turned an eye towards what 2022 might have in store for Thailand’s business sphere.
Our team of business reporters spoke with influential industry leaders across the economy, including banking, aviation, telecommunications, agriculture, hospitality, energy, online retailing and property.
Some of the highlights are the interview with the chief executive of Thailand’s largest private company Charoen Pokphand, and a discussion with tech visionary Jirayut Srupsrisopa, whose fintech company became the first of its kind to reach “unicorn” status in Thailand.
Read more about interesting business trends and outlooks that top executives in Thailand anticipate in the new year.
SUPHACHAI: TECH APPEAL
Suphachai Chearavanont, Charoen Pokphand (CP) chief executive, said the fast-changing global economic outlook means Thailand must improve capital accessibility, digital transformation and sustainability.
Mr Suphachai says the new era of Thailand 5.0 will need to place a firmer emphasis on skills development and proper startup business support.
He said the new era of Thailand 5.0 will need to place a firmer emphasis on skills development and proper startup business support. The blossoming of these areas would prop up the country’s economy and ultimately make Thai talent more attractive to international investors.
As for the public sector, the government’s efforts to become the region’s electric vehicle production hub while expanding more data centres are key strategies.
However, policymakers could step on the gas with digitalisation by lending more assistance to the software industry. This would contribute to shaping a more robust digital economy in the long run.
The Thai economy has three thriving sectors — tourism, exports and agriculture.
And while the pandemic severely affected the travel industry, Thailand could shift its focus to advance the special economic development zones of the Eastern Economic Corridor, Southern Economic Corridor and more logistics-related business.
“Businesses must adapt and assess their capabilities to compete after the pandemic. The pandemic affects Thai firms differently as some were left in bad shape while others got a boost like online business. Overall, it depends on how fast Thailand can adapt and foresee the opportunities ahead,” said Mr Suphachai.
CP is preparing to enter the new S-curve economy, and is transforming into a tech company. The company will use artificial intelligence, cloud technology, the Internet of Things (IoT) and robotic automation during this transition, including drones.
This vision aligns with the global market and economic trends, said Mr Suphachai. Hence, he said the situation presents a challenge and an opportunity because CP’s business investment encompasses eight sectors in 21 countries.
The online-to-offline model and e-commerce will be implemented for CP’s retail business, especially in Malaysia, Indonesia, the Philippines, Laos, Myanmar and Vietnam.
This will foster an inclusive environment where Thai farmers and business owners can further penetrate and succeed in the international market, showcasing “Made in Thailand” products.
Furthermore, CP’s food manufacturing sector will launch more wellness-driven food products. And for sustainability, CP aims to become a net-zero carbon organisation by 2030.
ARTHID: KEEPING A GUARD UP
Despite the global and local economic recovery trend, Siam Commercial Bank (SCB) needs to continue to closely monitor the economic situation because of several remaining uncertainties, especially new variants of the Covid-19 contagion.
SCB plans to keep traditional banking businesses at the bank, while spinning off growing subsidiaries to SCB X, says Mr Arthid.
The bank has also kept a close watch on inflation in advanced economies led by the US, and its possible impact on the Thai economy.
SCB’s chief executive Arthid Nanthawithaya said the bank would wait for a clearer situation, especially regarding the Omicron variant, before finalising an economic scenario and its 2022 business plan, which are expected to be complete in January 2022.
The bank has continued the existing business operation under its major organisational restructuring plan, he added.
SCB has been in the process of restructuring its business group and shareholding structure as well as the establishment of SCB X Plc, which will play the role of “mothership” for the SCB financial group.
SCB plans to keep traditional banking businesses at the bank, while spinning off growing subsidiaries to SCB X.
For the banking business, Mr Arthid said SCB will not concentrate on loan growth in 2022 amid a slow economic recovery. Instead, the bank will focus on supporting existing customers rather than acquiring new ones.
It will also concentrate on non-interest income, especially from wealth management, insurance and investment.
“Loans will not be our priority. If Thai economic growth is still in an L shape, SCB will not encourage loan growth, but will grow in line with customers’ real demand. The bank would also mainly focus on taking care of existing clients,” Mr Arthid said.
For growth businesses, which include digital assets, SCB has been involved in and explored several business areas. SCB classifies growth businesses as digital assets, which covers its existing businesses such as digital loans and digital securities.
Though the bank has been offering personal digital loans for a while, it will not expand this product aggressively in 2022, given slow growth in the economy and good risk management to control asset quality.
TASSAPON: BOLD MOVE FOR RECOVERY
While Thailand’s tourism sector is expecting 2022 to be a better year for its bruised industry, the country reopened in November before its plans were disrupted by the threat of Omicron in December.
Mr Tassapon says tourism outlook in the first half should be stable as the situation may not change abruptly from 2021.
Tassapon Bijleveld, executive chairman of Asia Aviation, the largest shareholder in Thai AirAsia, said the tourism industry still needs a bold move from the government to strengthen market opportunities for local economies, as experiences of the past two years showed that unfettered travel could not resume without reciprocal agreements with partner countries.
“The private sector in our country is quite strong and resilient, but the government still has to play a vital role in leading the negotiations with other countries to let people travel freely with fewer restrictions,” said Mr Tassapon.
The tourism outlook in the first half of this year should be stable as the situation may not change abruptly from 2021, but the situation in the second half remains unpredictable as a close eye must be kept on the travel policy of other Asian countries, which are key drivers for international tourism and air travel.
Mr Tassapon said that as Chinese tourists are unlikely to return this year, he has encouraged the government to set a recovery time frame for each quarter or every six months, laying out a clear target to let the private sector follow the same path.
For instance, he suggested the government choose the main targeted markets and ensure hassle-free travel for everyone, in order to bring about a successful recovery.
“We cannot stick to the same practices when dealing with crises, but should seize every opportunity in every possible way. If our neighbours are reluctant to reopen, the government should encourage them to see the benefits of travel resumption and how it can help improve the economy,” said Mr Tassapon.
As vaccine coverage in Thailand is in a better shape now, economic activities should be allowed to resume as normal with the government instructing the public to maintain health and safety discipline.
“I went abroad recently and was so glad to see people there live their normal lives. This can also happen in Thailand, as we cannot let the new variant draws us back like in the past two years,” said Mr Tassapon.
SUPHAJEE: LESSONS LEARNED
In the year 2022, the new variant threat, travel restrictions and vaccination rates will continue to affect the hospitality business in Thailand, said Suphajee Suthumpun, group chief executive of Dusit International.
Mrs Suphajee says clear communication and simple guidelines are the main keys to maintaining travellers’ confidence.
The country can expect new flows of international travellers from Europe, the US, the Middle East and key source markets in Asia to compensate for the lack of Chinese tourists while stringent travel restrictions remain in place.
However, the fast-spreading Omicron variant challenges the industry’s attempts to move towards recovery.
To battle the negative factors, clear communication and simple guidelines are the main keys to maintaining travellers’ confidence.
Even though the number of tourists is far smaller than that seen in the pre-pandemic years, Thailand’s reopening shows that the government has adapted lessons learned from past experiences to improve the plan.
For instance, the Thailand Pass has been introduced to replace the complicated Certificate of Entry (COE) system. Such changes could create a good foundation for the industry in 2022.
Mrs Suphajee said simplified travel rules for tourists which utilise digital solutions, and a more cost-effective testing system using rapid lateral flow devices, is vital to raise tourism arrivals in the long run.
The government has been urged to implement visa policies in a simple manner to attract growing numbers of potential travellers to support a faster recovery, including long-haul tourists in the luxury segment and digital nomads seeking longer stays in Thailand.
Mrs Suphajee said effective public health measures, alongside continuous vaccine and booster rollouts, are essential to crush the number of new cases and maintain Thailand’s reputation as a safe destination.
“The government must also work closely with hotel and tourism operators to build a recovery roadmap that benefits all relevant sectors and destinations,” Mrs Suphajee said.
She added that infrastructure investment, tourism stimulus and support should be active, in order to enhance the country’s competitiveness and appeal to international tourists.
JIRAYUT: CUTTING EDGE
Jirayut Srupsrisopa, founder and chief executive of Bitkub Capital Group Holdings, urged businesses and the Thai economy to continue adopting cutting-edge technologies as the trend towards digitalisation will continue in 2022.
Mr Jirayut has seen rapid growth in digital assets’ trading volume and value as more investors became interested in cryptocurrencies.
Mr Jirayut said he had seen rapid growth in digital assets’ trading volume and value as more investors became interested in cryptocurrencies.
The acceptance of digital assets as a form of payment is evident in a growing number of department stores and companies. The practice serves as a strong indication that the digital economy is thriving.
Looking ahead, this heralds the emerging trends of decentralised finance (Defi), game Defi (GameFi), non-fungible tokens and the metaverse, in the New Year.
As for the post-Covid-era, Mr Jirayut said that 5G technology, big data, artificial intelligence, cloud computing, Internet of Things, augmented reality, virtual reality and the metaverse are among the important factors that will greatly contribute to the digital transformation.
The 5G era will see high-speed data collection and deeper analysis of changes surrounding all aspects of customers’ lifestyles.
Workplaces will have a proper technology infrastructure that allows the continuation of the remote working model. Such a shift in the work culture will produce a boon for the tourism industry because more international travellers will embark on long “workation” journeys, especially in popular destinations such as Bangkok, Phuket and Chiang Mai.
Thailand’s digital asset exchange operator Bitkub viewed the “workation” trend as an opportunity to attract crypto-holding travellers to the country.
The ambitious vision can be realised by expanding financial infrastructure that facilitates cryptocurrencies’ exchange into Thai baht and low-cost cross-border remittances. He concluded that it would ultimately help Thailand’s tourism industry to recover.
AUTTAPOL: A CLEANER FUTURE
The year 2022 will continue to see a shift towards cleaner energy consumption, driven by global concerns over climate change, said Auttapol Rerkpiboon, president and chief executive of PTT Plc.
The year 2022 will continue to see a shift towards cleaner energy consumption, says Mr Auttapol.
While continuing to add value to its oil and gas products, the national oil and gas conglomerate will emphasise its business diversification plans, including renewable energy and electric vehicle (EV) projects.
PTT has already achieved its goal of becoming a multinational energy company and intends to go further by matching its businesses with new global trends.
“It’s time for a new version of our businesses,” said Mr Auttapol, referring to PTT’s Future Energy and Beyond campaign, which includes clean energy and EV development.
The company, through its subsidiaries, aims to increase electricity generation capacity, based on clean energy sources, to 12 gigawatts within 2030, up from 0.4GW.
PTT also joined forces with Taiwan-based multinational electronics manufacturer Hon Hai Precision Industry Co, also known as Foxconn, to jointly develop an EV production facility worth US$1-2 billion in the Eastern Economic Corridor.
To familiarise motorists with EV technology, PTT set up EV ME Co to operate a new digital platform aimed at EV sharing, said Mr Auttapol.
PTT Group is eager to be part of the EV ecosystem in Thailand after it entered this business by installing EV charging outlets at its petrol stations.
Good working performance, together with care for the environment and society, will be behind PTT’s business success, said Mr Auttapol.
BOON: JOYLESS START TO THE YEAR
The Thai economy will go through more tough times during the first six months of this year but authorities are hopeful about putting the economy back on track in 2022, says Boon Vanasin, chairman of SET-listed Thonburi Healthcare Group.
Thai exports and tourism will play a key role in the increase or decrease of GDP, says Dr Boon.
“The government expects 2022 GDP to grow by about 4%, but I am confident economic growth will not reach this target,” he said when asked to look into the future after New Year.
Dr Boon based his opinion on various factors inside and outside the country.
The spread of Omicron and the US Federal Reserve’s decision to reduce purchases of financial assets under its quantitative easing (QE) programme in response to rising inflation are not good for the global economy which Thailand depends on, said Dr Boon.
Thai exports and tourism play a key role in the increase or decrease of GDP.
Changes in QE policy are expected to affect financial markets around the world, while Omicron has caused many European countries to bring back stricter measures to contain the highly contagious variant.
Dr Boon said he is also not convinced by the government’s prediction that total investments in Thailand will reach 600 billion baht next year, fuelled by investment projects in the Eastern Economic Corridor.
He said many investors remained cautious about spending.
“Investments will take time to return to the levels seen before the pandemic,” said Dr Boon.
CHATIP: OVERCOMING OBSTACLES
Chadatip Chutrakul, chief executive of Siam Piwat Co, the operator of Siam Center, Siam Paragon, Iconsiam and Siam Discovery, said that with two years of experience of living with Covid-19, Thai people have learned to live with the virus, while retailers have also learned to manage their companies to align with the changing business environment.
Businesses should offer an experience that is beyond customer expectations not only at physical stores but also online, says Mrs Chadatip.
Despite the growing threat from Omicron, she believes local shoppers are still spending time at her company’s four shopping complexes as usual.
Local shoppers will still be the main driver of the domestic industry in 2022, as tourism is unlikely to recover yet.
“We, our country and the private sector, have confronted many kinds of crises, we believe we can overcome such obstacles. We don’t know about the potential impact of Omicron, but it is not a new thing, we already have measures in place to manage it and its possible spread,” Mrs Chadatip said.
According to Mrs Chadatip, businesses should offer an experience that is beyond customers’ expectations not only at physical stores but also online.
“If the retail industry is the ocean, it is not necessary for me to be the biggest fish in the ocean, but we should be the fish that makes the ocean grow sustainably,” she said, adding that sustainability is one of the key trends of doing business successfully, along with creating and collaborating to offer things the retail industry has never seen before. Products that tell a story will be attractive to shoppers, she said.
“SMEs and startups will be the source of innovation,” Mrs Chadatip said. “If we team up more with them, we will have products and services that customers are satisfied with. We believe in the ‘collaboration to win’ strategy. We won’t win if we’re good and smart alone. If we keep competing with one another, we also won’t win. But if we go together, we will win.”
As the world has rapidly changed thanks to technological disruption and the pandemic, Mrs Chadatip said that businesses will survive if they can manage the changes, with speed being the key.
ANUPHONG: BRACE FOR THE STORM
Recovery of the property market will be delayed to the second half of 2022 as uncertainty swirls around Omicron, said Anuphong Assavabhokhin, chief executive of SET-listed developer AP (Thailand) Plc.
Mr Anuphong predicts the property market in the first half of 2022 will remain unchanged from 2021.
Last year was a year of challenges for the property market as developers had to work in a volatile economy due to the Covid-19 crisis which had continued from 2020.
In the US, UK and New Zealand, border closures and restrictions on some business activities have been reinstated as Omicron infections rise. This suggests that no one around the world will be able to avoid this crisis.
“It’s hard to say that the market has already bottomed out,” he said. “In 2021, vaccines were our hope, but the reality today is that there are always new variants which are unpredictable,” said Mr Anuphong.
If Covid-19 is regarded as the heart of the crisis, it is comparable to the eye of the storm which will keep creating new storms. No one could have foreseen that Omicron would have such an impact on the world.
“We should always prepare for changes. Business operations in 2022 still have to maintain a cautious approach,” he suggested. “We cannot predict the impact from the pandemic this year.”
For the property market, there are three factors to watch, comprising Omicron, inflation’s impact on construction and wage costs, and greater competition in the low-rise housing market.
“One of the challenges is an amount of subcontractors or workers which may not be sufficient to take construction jobs in the growing market,” he said.
He said the condo market had bottomed out, and some segments like the middle-to-lower-end may improve in 2022 if business activities return to normal.
“Competent developers will be those diversifying to more segments in a larger amount and those restructuring the organisation to prep for any change. The key is to empower people in the organisation,” he added.
He said the property market in the first half of 2022 will remain unchanged from 2021.
In the second half, the global economy will improve if the world can cope with Omicron and Covid treatment is effective.
Founded in 1991, AP has run joint ventures with Japanese developer Mitsubishi Estate Group since 2013. The company recorded total presales of more than 35.8 billion baht in 2021 and expected 40 billion baht in revenue in 2021.
SOMCHAI: DIFFERENTIATION IS KEY
Somchai Lertsutiwong, chief executive of Advanced Info Service (AIS), Thailand’s largest mobile operator by subscriber base, believes the merger of True Corporation Plc and Total Access Communication (DTAC) Plc, No.2 and No.3 mobile operator, respectively, will take the country’s telecom business into uncharted territory in 2022.
Mr Somchai says AIS is gearing up for investment in digital business for strong future growth.
The telecom sector’s annual growth is normally 2% higher than GDP, but the sector will not be the same in 2022 due to the merger, which will leave only two major carriers left in the market. In addition, AIS will have a new operational strategy.
Mr Somchai said it was premature to speculate how the market landscape would change.
Over the past two years, telecom operators have faced a slight decline in profit margin due to the rollout of promotional packages to support home working and streaming services.
AIS is still committed to investing in the network to maintain a leading position and support digital transformation among enterprises.
“5G tech will be a fundamental infrastructure for innovation adoption in the new economy,” said Mr Somchai.
In December, AIS announced a new strategy to become a cognitive telco, or a smart organisation, over the next three years in order to better respond to rapidly changing customer demand in the digital era.
The move is seen as AIS making a major step ahead of rivals, particularly the new combined entity which will be formed through the merger of True and DTAC.
“Network speeds and service quality may not be enough for telecom operations from 2022, but differentiation is the most important key with the adoption of big data analytics and artificial intelligence,” said Mr Somchai.
The cognitive telco stance will focus on three primary goals, according to Mr Somchai.
First, AIS aims to boost productivity and provide the greatest benefit to customers. Secondly, it wants to continue driving business growth with home internet and corporate customers.
Finally, the company is gearing up for investment in digital business for strong future growth.
“We strongly believe AIS’s business ecosystem is more ready to pivot towards a smart organisation than other rivals,” said Mr Somchai.
DONG: ROOM FOR GROWTH
Online shopping giant Lazada is convinced that Thailand’s e-commerce industry will continue to grow even in the post-pandemic era as more users are pivoting towards online shopping, while competition in the segment will remain intense with two major players in the market.
Mr Dong says Lazada focuses on long-term and sustainable targets by providing the best experience to both sellers and buyers.
“Thailand already has high internet and e-commerce penetration. The country’s e-commerce segment has grown faster than other Asean countries due to the shift of consumer behaviour towards online amid the country’s lockdown,” said James Dong, chief executive of Lazada Thailand and Vietnam.
He said Lazada is not a public company and at this moment profitability is not the biggest pressure for the company, which is financially supported by Chinese e-commerce giant Alibaba.
Lazada, he said, is now focused on assisting small and medium-sized enterprises in running businesses and helping customers have better access to consumer goods online.
The company has a target to make sure cross-border deliveries can be completed within three days. It is gearing up efforts to provide better logistics services with a trusted assortment of products.
Lazada, which leads the country’s e-commerce market, is trying to maintain or slightly increase its market share in the online shopping sphere, Mr Dong said.
He said the company focuses on long-term and sustainable targets by providing the best experiences to both sellers and buyers.
Referring to the segment’s competition, Mr Dong said: “As long as there are two big players, the competition will be tough. But this is also a good thing that pushes us to get better, which benefits both consumers and sellers.”
He said Lazada has a strong market penetration, but customers’ spending and purchasing frequency may not increase that much.
“China’s online retail contributes more than 30% of the country’s total retail segment but in Thailand it is less than 10%, so there is still huge room to grow,” Mr Dong added.