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Tesco Lotus redefines its retail proposition to better serve Thailand's shoppers in the age of urbanisation

To cash in on the growth of urbanisation in Thailand, Tesco Lotus is redefining its proposition to better serve the needs of urban customers. It aims to do that through differentiated product offerings and an omni-channel shopping experience.
As a result, the retailer’s medium-term investment plan will see the opening of 750 Tesco Lotus Express stores over the next three years, as well as upgrading its existing Express stores to fit the new proposition, a space repurposing programme for its hypermarkets, and an expansion of its online shopping coverage.

Tesco Lotus is currently operating 400 large-scale hypermarkets, and 1,600 Express stores in Thailand.

Sompong Rungnirattisai, the chief executive officer of Tesco Lotus, said that urbanisation, along with digital technology, has transformed the way consumers live and shop. Both trends have led to a greater demand for convenience, speed, and a seamless omni-channel experience, while quality and value continue to be crucial for shoppers of any era.

Tesco Lotus has seen urbanisation as a significant trend that continues to shape the way people shop. More than 58 per cent of the Thai population is expected to live in urban areas by 2030, up from the current rate of 50 per cent.

In order to cater to the rising demands for convenience, speed and a seamless omni-channel experience, while still maintaining great offers on quality and value, Tesco Lotus is redefining its proposition to better serve the needs of urban customers. This includes differentiated product offerings and an omni-channel experience through all of our channels, online and offline.

“We plan to serve the growing urban population better through differentiated propositions that enhance both our product offerings and shopping channels. These include adding new, and refurbishing existing, Tesco Lotus Express stores into a new proposition that caters to urban lifestyles, repurposing space and creating relevant offers in large stores, as well as improving the omni-channel shopping experience,” he said.

“With growing urbanisation, shoppers want both convenience and a good shopping experience, without compromising quality and value for money. To better suit customers, we have focused on simplification, including re-arranging space in our large stores to improve shopping experience, as well as utilisation of technology and an omni-channel platform to enhance convenience. Tesco Lotus is known for offering high quality products at affordable prices and we will maintain this approach as quality and value for money continue to be important to urban shoppers. Fresh food and Tesco’s own brand products play a key role in reinforcing this unique proposition. We focus on sourcing our fresh food directly from local farmers and having capable Thai SMEs producing Tesco’s own brand products to ensure that we deliver high quality, sustainable products at affordable prices to our customers,” said Sompong.

Sompong said that for small-format Express stores, Tesco Lotus has designed a new proposition: “fresh, simple, and helpful for your daily needs”. The first 30 Tesco Lotus Express stores built around this concept have received positive responses from customers. The new Tesco Lotus Express proposition combines the company’s current core strength in groceries and fresh food “for later” consumption with more variety, and delicious ready-to-eat options or “for now” missions.

“Our plan is to open 750 new Express stores, while refreshing existing stores over the next three years into this proposition,” he said.

For large stores, a space repurposing programme with new offers is already under way, with 20 hypermarkets having been repurposed. In parallel, their online business will be expanded to cover more areas.

In terms of products, in order to serve the urban lifestyle better, the new proposition Express stores offer an extensive range of ready-to-eat options both hot and cold, such as cage-free boiled eggs, cold sandwiches, hot croissants and freshly baked goods through to heavier options such as rice dishes. In addition to ready-to-eat products, the company continues to focus on a core range of fresh food including fruits, vegetables, and meat in convenient packages and dry groceries. In addition to food, other items such as household and beauty products are offered in smaller sizes to suit the consumption behaviours of convenience store shoppers.

“In term of channels, many provincial areas outside Bangkok are becoming urban cities,” said Sompong. “Consumers living in these areas are not well served with the right proposition, hence we will add our Express stores in the new proposition to cater for this group of customers. Around two-thirds of the new Express stores will be in Bangkok and the central region, while the rest will be in urban areas in other cities across Thailand,” he said.

“Tesco Group remains committed to Thailand, currently its largest market outside the United Kingdom. The continued investment in the country will benefit the Thai economy, as well as reinforcing our commitment to making positive contributions to society, communities and environment,” he said.