There are instances whereby our clients have asked us to assist them in their purchase of a retail property. We have always maintained that the retail sector is facing two main threats.
- Competition from e-commerce
- Competition from upcoming supply
“All over the world, e-commerce is challenging traditional retail stores, and Thailand is no exception,” said CBRE in a report. E-commerce has yet to take off in a huge way in Thailand but that will change eventually. Currently, retail tenants all over the world are adopting e-commerce into their business to complement their brick and mortar retails stores. In most instances, they do reduce their number of retail stores. This is an ever growing trend and is not unique just to Thailand but across the world.
Retail supply is also increasing and these new retail spaces will pose a challenge to the current ones on the market. Here is a chart by CBRE Research showing the retail supply in Bangkok by area.
We still find that the retail segment poses a lot of uncertainty. The challenge coming from e-commerce is huge and will change the way business is done. This is one of the reasons why we do not take on too many retail projects under our company and brand.
The editorial team at Invest Bangkok Property
This article is in response to https://insideretail.asia/2019/03/20/competition-increases-in-bangkok-retail-property-market/