Page 162 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

The challenges of the Fourth Industrial Revolution incorporating with the future technology such as automatic robots,
Artificial Intelligence (AI), Nanotechnology, and the cashless society trend. These would lead to change of
customer behaviors. Several consumers are continuously shifting to online channels and highly competition in
online retail market with full of new technologies and new innovation-equipped players, while Central Retail has
mind experiences via online channels than those in physical stores. Competitors in the markets may include operators
who were not originally in the retail business before, for example, platform companies like social networks which already
have a large database of customers or mobile payment. Therefore, Central Retail has continuously invested in
the Omnichannel development to create seamless shopping experience that integrated either physical stores and
online channels or via mobile including the technology development for the management and employees to increase
competitiveness. However, there is a risk that the return on investment may not be consistent with or achieve its goals.

Nevertheless, Central Retail is confident in its key strength that excels its competitors in offering a wide variety of
brands and products while delivering an outstanding customer experience (whether in physical stores, through
online channels or Omnichannel platforms). Central Retail offers new shopping experiences or related products with
holistic approach to customers to create differentiation and privilege, apart from directly purchase from brand owner.
Central Retail puts a customer feedback process in place and regularly conducts customer satisfaction surveys to
gather feedback from customers of each business unit in order to keep up with the rapid changes in the retail industry.
The survey is conducted through multiple channels, for example, online surveys that allow customers to express
their own opinions and face-to-face and phone interviews with both customers and non-customers of Central Retail,
in order to analyze their expectation, satisfaction, and demand for service improvements.

Central Retail also differentiate itself from competitors by attempting to provide the superior services to customers.
On the other hand, Central Retail may suffer the negative and significant effects on its business and operating
results if it is not successful, whether wholly or partly, in such competition.

The competitive nature between Central Retail and competitors may influence Central Retail’s profitability,
including but not limited to price strategies; proactive marketing; marketing strategies which do not focus on
profit making; offering the combination of more various and attractive products; applying marketing campaigns;
type of stores and new retailing channels into the business; or creating the better shopping experiences.

Central Retail may suffer the negative effects on its business, financial position and operating results if it does not
succeed in effectively responding to the competitive pressures, changes in the buying trends, situational changes
in the market in which Central Retail is operating at present or in the future; or if Central Retail’s business strategy
driving is delayed or unproductive due to the aforementioned factors.

(2) Economic Environment Risk

Central Retail’s business suffers the impacts from the retail market situations and the overall economic situations
in Thailand, Vietnam and Italy, as well as the global and regional economic situations. Central Retail’s revenue is
significantly influenced by the level of consumptions, thus any changes in economic factors, which impact
the consumer spending in the countries in which Central Retail is operating, will directly impact its revenue as
the economic situations or events may widely lessen the consumptions or drive the consumers to buy other
optional products. The economic situations or events include but not limited to:

• Deflation in financial markets.
• Inflation or deflation.
• High unemployment rate;
• Changes in exchange rates;

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