Monday, February 15, 2010

Makro puts grocery stores on wheels

Siam Makro Plc, the operator of Makro cash-and-carry stores, has joined with DFM Mini Truck (Thailand) Co, to roll out mobile grocery stores to attract small retailers.

Under the scheme, DFM and Makro will co-design the mini trucks and approach grocery-store owners to buy them to transport their goods or use them as mobile grocery stores, restaurants, bakery and coffee shops, said Pitaya Tanadamrongsak, managing director of DFM, the importer of DFM multi-purpose trucks from China.

DFM will organise roadshows at all 45 Makro outlets to introduce the mini-trucks to prospective investors.
The trucks will be available in two formats. The counter format allows shoppers to buy products around the truck and the walk-in format allows customers to choose products inside.

DFM charges 400,000 baht for a truck and another 100,000 baht for product inventory. Makro will have seven product groups for shop owners to buy and sell at their mobile stores.

"We expect to sell 100 trucks to shop owners and investors after ending our truck roadshows," Mr Pitaya said.

Shop owners can pay DFM for the trucks in installment at an affordable minimum rate of 160 baht a day. Based on the projected sales, the shop owners can break even within one year.

Mr Pitaya said the company had 27 dealers to provide maintenance in 22 provinces with Makro operations. It plans to open another 13 dealers this year. In the longer term, the company also plans to form a joint venture with Dongfeng Motor Corporation in China to set up a commercial truck plant in Thailand in the near future.

Prantip Akarimachayanon, associate director for marketing at Siam Makro, said the co-operation with DFM is part of its Makro Retailers' Alliance (Mit Tae Chow Huay) project launched in 2007 to help small retailers survive intense competition and the downturn.

To date, more than 2,000 grocery owners have joined the MRA project. About 600 grocery stores have already modified their store planning and product displays. After the modifications, their sales increased by at least 35% and some even saw a 250% jump to 7,000 baht per day from 2,000 baht.

"Mobile grocery stores will be a new alternative for grocery store owners who want to extend their business in remote areas not served other retailers," Ms Prantip said, adding that the grocery store owners can buy DFM mini trucks without any conditions.

Currently, Makro has more than 500,000 retailer members. Thailand has 680,000 registered grocery shops, according to Commerce Ministry data. About 60% are grocery store operators, 16% are hotels and restaurants and 24% are institutional operators.


should read about Ansoff Matrix

The Ansoff Matrix was first published in the Harvard Business Review in 1957, and has given generations of marketers and small business leaders a quick and simple way to develop a strategic approach to growth.

Sometimes called the Product/Market Expansion Grid, it shows four growth options for business formed by matching up existing and new products and services with existing and new markets.

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