Page 112 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

(5) Advertising HomePro, Global House, DoHome and Boonthavorn
(for DIY decoration and home improvement products).
Central Retail utilizes a variety of media in advertising Apart from aforementioned, there are also online
and promotional activities, including social media, online marketplace competitors such as Shopee, Lazada,
advertising, SMS, direct mail, billboards, newspapers as well as brands that reach customers directly through
and magazines. Each of business units is responsible online or omnichannel. Central Retail’s main competitors
for its own advertising strategy though store clusters and in Vietnam are Mobile World JSC and Media Mart (for
may also work together and coordinate on advertising electronic products), Lotte Group and Saigon COOP
where appropriate. Certain advertising decisions are also (for hypermarkets). As for the main competitors in Italy,
subject to the agreement of suppliers where appropriate, Gruppo Coin (for fashion products). Considering fashion
and certain advertising costs may be borne by suppliers. segment, Central retail also competes with global
fashion retailers such as Uniqlo, Zara, and H&M.
1.2.3.2 Competition
(1) Business and Network Expansion
Central Retail’s competitors comprise of traditional
store-based retailers, store-based retailers moving to Central Retail has historically expanded its business
online and pure online or e-commerce players. For in-store in terms of geography, formats, and retail categories
sales, Central Retail competes with competitors in through the opening of new stores as well as through
each region that operates retail business in the same acquisitions and partnerships. Central Retail’s earliest
or similar retail categories or formats as its business retail banners, such as Central Department Store,
units. For online sales, over the past several years, expanded largely through the opening of new stores.
Central Retail has competed with pure online players However, Central Retail also has a strong record of
who lack of a physical storefront. The rapid technological successful joint ventures and acquisitions, which Central
developments have made significant advancements in Retail has used to grow its business.
E- commerce. As a result, small retailers or new entrants
can also compete with large and long-established (a) Store and Network Optimization
retailers like Central Retail. Central Retail intends to Store-based retailing is more dynamic than in the
utilize significant resources to develop and expand past, and the approach has evolved beyond simply
the omnichannel platform as a response to all forms opening stores, to also constantly adjusting the
of competition. Central Retail believes that Central store mix to optimize sales, logistics and operating
Retail’s comprehensive network and physical stores costs. Central Retail has the flexibility to increase
coverage in nationwide will be a key advantage for and decrease its selling space continuously based
omnichannel platforms compared to pure online players primarily on sales performance. Where performance
(E-Commerce operators who do not have physical stores). is declining, Central Retail can choose to swap
More details are on the topic of “Risk Management”. in new stores or new concepts, sublease, or close
a location, and where sales are strong, Central Retail
Central Retail believes that its commitment to customer can increase the selling space of existing stores,
service is the key difference from other competitors. add higher-margin stores or concepts or cluster
There is a significant strength in terms of names other retail banners to help achieve better network
recognition, offering a wide variety of brands, products efficiency.
offerings, shopping experience (either offline, online,
or omnichannel), and Central Retail’s thorough Central Retail dedicates considerable resources
understanding of fashion trend and the retail industry to identifying and securing locations for new stores
dynamic. In this regard, Central Retail does not have any that meet its selection criteria, which include but are
competitors in Thailand or Vietnam that can compete with not limited to areas with high population density,
Central Retail at the overall level both in terms of formats, customer mobility and potential for customer growth.
concepts, and stores variety. Nevertheless, considering Central Retail also considers network effects, such as
the level of business unit level, major competitors the benefits of store clustering, both for driving cross-
in Thailand are The Mall (for fashion products), selling and efficient logistics.
Lotus’s, Big C Thailand and 7-11 (for food products),

112 Annual Report 2021 (Form 56-1 One-Report)