Businessmen are meddling in the realm of the king of convenient stores..

Some of the richest Thai tycoons are seeking to enter the convenience store market, betting that changing consumer preferences, which favor buying less but more frequently, will stimulate demand for many years to come. Leading this attack is Thailand's richest man, Charoen Sirivadhanabhakdi. The owner of an alcohol business with a net worth of around $11.5 billion, he plans to aggressively promote his "dang chai" business model, with the goal of having30,000 small shops adopt it by2027..

Under this program, his company Berli Jucker Public Company Limited provides logistics, marketing, and data management in exchange for the store's commitment to purchase a minimum level of goods from his companies, including Big C Retail Corporation and Thai Beverage Pcl - effectively turning independent corner stores into convenience stores.

Other wealthy individuals seeking to gain their share of the market are iconic names from the Thai business elite. Among them are mass transit baron Kiri Kanjanapas and the Chirathivat family, who built their fortune on department stores and shopping centers around the world.

However, everyone looking to expand their business faces serious competition from the current king of convenience in Thailand - CP All Pcl. The company, which is the most valuable asset of the Chirathivat family at $28 billion, operates over 14,000 7-Eleven stores. This accounts for nearly three-quarters of the total number of convenience stores in the country, according to data from CBRE Group Incorporated, which specializes in real estate services.

The rivalry among billionaires highlights optimistic expectations for this sector, as the new Prime Minister and Finance Minister Srettha Thavisin begins a program to distribute around 560 billion baht ($15 billion) in cash to stimulate the declining economy. Growth expectations are also based on the revival of tourism.

The foundation of this growth, however, is the increasing popularity of convenience stores, which are found on every corner in Bangkok and other major cities, offering everything from ready-made meals to everyday goods and bill payments for electricity. The sector is expected to expand by 5.4% this year to 428 billion baht, following an 18% growth in 2022, driven by the easing of Covid restrictions, according to data from Euromonitor International. Annual growth could reach 5.5% by 2025, with more than two-thirds of convenience store revenue expected to come from food and beverages, according to estimates from Bank of Ayudhya Pcl.

“We are very optimistic about the retail sector, as the new government has taken active steps by allocating huge amounts to stimulate consumption and the economy,” said Varorit Chirachon, CEO of SCB Asset Management Co, which manages assets worth about $51 billion, including shares of CP All and Central Retail Corp Pcl. “Many new players are trying to get their share of this market with enormous potential before it’s too late.”

Some attempts to secure their share are being postponed. Despite earlier successes of Charoen in his ambitious small business store expansion program - having already added about 1,400 stores in just three months ending June 30, bringing the total to around 2,600 - the planned initial public offering of Big C Retail, which was expected to raise $1 billion, was postponed in August.

Meanwhile, the Chirachivat family, which earned most of its wealth from department stores, shopping malls, and hotels, is reevaluating its convenience store strategy after the coronavirus pandemic harmed business in key tourist destinations. The group, which already holds the FamilyMart franchise from Japan, saw the number of such stores drop to about 400 by March from 900 in 2020. In August, Central Retail announced that it would completely abandon the FamilyMart brand and transition to Tops Daily to help promote its brand. In addition to FamilyMart, they already have around 300 Tops stores, ranging from supermarkets to convenience stores. According to Bloomberg Intelligence (BI) analysts Lisa Lee and Siti Nur Fairuz Khalil, these two divisions together generated 43 billion baht last year.

Finally, billionaire entrepreneur Kiri Kanjanapas plans to utilize the Bangkok subway, which he has led for over three decades, as well as his investments in smart cards, financial, and consumer companies. His company, BTS Group Holdings Pcl, opened its first Turtle stores this year on popular platforms at some stations serving 10 million residents of the metropolis. It is also installing vending machines near the station exits.

But regardless of the brand, each of their ambitions must compete with CP All's plans to strengthen its already huge dominance. The company intends to expand its network in anticipation of a recovery in consumer spending and an influx of foreign tourists after the Covid-19 pandemic, says head of investor relations Jiraphan Thongtan. CP All is investing up to 13 billion baht in its expansion plans for 2023, including the opening of at least 700 7-Eleven stores, Jiraphan says.

The revenue of convenience store CP All grew by 22% in 2022, reaching 354 billion baht, with food and beverages accounting for 74% of sales, according to BI analysts. The company, which is part of a large business group that includes Thailand's largest food manufacturer, expects double-digit growth in group revenue and operating profit in 2023, increasing its focus on premium products and non-food items, as well as implementing new cost control mechanisms and economies of scale, BI analysts say.

“The competition is fierce; only the strongest will survive,” says Yariya Tumtrongkitkul, head of retail for Thailand at CBRE Group. “Convenience stores need to rethink how they will compete and expand.”