Page 116 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

1.2.3.3 Industry

In 2021, the epidemic situation of COVID-19 affected and tremendously slowed down the global retail industry
as it limited economic activities with control measures, lockdown measures, domestic and international travel
restriction implemented to mitigate the spread of the disease, resulting in declining consumer confidence.
In addition, COVID-19 has also been a factor that changes consumer behavior as they rely more on digital platforms
to purchase goods and engage in activities; for example, food delivery, remote meetings, or streaming movies via
applications. This cause led to retailers in the global retail industry adapting their businesses to accommodate
and mitigate the impacts of the shifting consumer behavior. Even though many businesses gradually recover,
some might not be able to fully recover to the same level of pre COVID-19.

(1) Overview of the Thai Retail Industry

The retail industry in Thailand is growing steadily as a result of economic growth, rising youth population, higher
middle-income people, coupled with developed standard of lifestyle and urbanization, expansion of investment
in the business and government investment in various infrastructures is another factor that increases the chances
of economic expansion in the region.

The middle to high income consumers remains the key target segment for many retailers, driven by a desire for
premium products and services. The increase of purchasing power and growth of young generation has also
created opportunities for channels such as online retailing, as these consumers seek novel brands and products
to cater their needs.

The National Economic and Social Development Council (NESDC) reported that Thai economy (GDP) in 2021
grew by 1.6% despite COVID-19 pandemic, recovering from a 6.2% contraction in 2020. The export of goods,
private consumption, and investments expanded by 18.8%, 0.3%, and 3.4%, respectively. In addition, the
manufacturing sector, wholesale and retail trade sector grew by 4.9%, and 1.7%, respectively. For the economic
stability, the headline inflation was at 1.2% and the current account registered a deficit of 2.2% of GDP. In
addition, the survey from Thai Retailers Association demonstrated that the COVID-19 pandemic has adversely
affected Retail Sentiment Index. The Retail Sentiment Index (RSI) gradually declined since late March which
belowed the average level of 50 and sharply declined during lockdown period in July and August. However,
Retail Sentiment Index gradually recovered after ease lockdown and many businesses have resumed their
operation. The Retail Sentiment Index in December was at level of 68 which reflected the anxiety of Omicron
(new strain) outbreak in many provinces. Nevertheless, the government stimulus package would stimulate
overall purchasing power of consumers.

Nevertheless, the online retail industry in Thailand is thriving at a faster pace as Internet access in Thailand
continues to grow while consumers demand more convenience in their daily lives. The way consumers are able
to buy products anywhere, anytime and have products directly delivered to their home, shall help boost sales
of the online retails. Rapid growth in smartphone penetration will also allow more Thais across the country to
access the internet at their convenience and at fast speeds. The COVID-19 pandemic situation in 2020 also
served as a driving factor for rapid growth in online retail.

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