New marketing wars are being fought for the hearts, heads and palates of Thailand’s new affluent consumers. Rapid economic growth has catapulted millions of urban dwellers into a modern middle class keen for an international lifestyle and the products that go with it.
Take haircare – a market that barely existed in Thailand ten years ago. Today, virtually all Bangkok women use both a shampoo and conditioner. Unilever (Sunsilk, Dimension, Clinic, Lux Shampoo, Organic) and Procter & Gamble (Pantene, Rejoice, Vidal Sassoon) dominate the market, accounting for about a 70 per cent share. Colgate and Japan’s Kao Corporation share another 15 per cent.
But the market is far from sewn up by major brands. According to a study by the US embassy in Bangkok, there are good opportunities to sell imported shampoos and haircare products, even at twice the price of regular brands on sale in the UK.
Smart Thai women are snapping up brands imported directly from the US, France, Japan, Indonesia, and the rest of Asia. Smugglers of Golden Triangle fame have diversified their portfolios and are now bringing in increasing quantities of innocuous haircare products from nearby Singapore and Malaysia.
Marketing mavens say metropolitan Thais are more eager to try new products than many other nationalities. Additionally, young women share the belief that they should change shampoo brands regularly if they want their hair to look its best. And so the demand for brands accelerates quicker than products can be launched. For Unilever, the country has become one of its key centres for hair product development. Unilever’s Organic shampoo, originally developed in France, was launched in Thailand before rolling out worldwide.
According to the embassy study, imported brands accounted for about 15 per cent of the market in 1996, and this is growing. When tariffs on haircare products are halved to 20 per cent later this year, imports are expected to increase to 25 per cent of the market. The embassy reckons US brands dominate imports with a 27 per cent share, worth $11.1m (7.3m) in 1995.
Over the past two years or so, the conservative appearance of many Thais has been transformed by radical new looks. Increasing numbers of fashion-conscious Thais are colouring their hair for reasons other than simply to hide the white or grey. A palette of colours from brown to blonde to orange is not unknown, with both Thai men and women now highlighting their hair. By 1999, imports of hair colour products are expected to increase to 17 per cent of the market, worth $18.3m, according to the study.
And what happens in Thailand has an influence on consumer trends in neighbouring countries. Though generally poorer than urban Thais, the people of Laos, Cambodia, Myanmar and Vietnam are buying more consumer goods and looking to Thailand as a source for these and other lifestyle ideas.