There are successful traditional clusters with typical products, such as Pratunam for clothes, Worrachak for spare parts and Baan Mor for electronic devices. They were founded more than 70 years ago and their entrepreneurs started up their business more than 30 years ago.

However, in the past three to five years, many developers have focused on turning traditional retail-store clusters into modern-trade shopping malls – some of which have not been as successful as the enterprises they replaced.

The research was unveiled by the college along with the Said Business School at Oxford University and the Thailand Sustainable Development Foundation.

Assistant Professor Randall Shannon from the college’s International Marketing Programme said Thais had long been familiar with the retail industry, starting with the traditional trade.

Later on, the retail industry was reconsidered to suit customer behaviour in the modern era.

Modern trade outlets – shopping centres, community malls and hypermarkets – were introduced, containing multi-brand shops covering various types of products, and became hubs for one-stop shopping.

In Bangkok, 14,468 retail shops were surveyed that had same-product stores within 5 metres in 299 clusters.

One of the interesting outcomes is that the stores in those clusters were sometimes more sustainable than the same stores in modern trade formats.

Other famous traditional clusters in Bangkok are Bang Lamphu, Sampeng and Bo Bae. In some cases, entrepreneurs do not own the land, so they may be forced to move out.

The formation of same-product retail store clusters is beneficial to entrepreneurs, as a magnetic force drawing potential customers is created.

Even though those stores have to challenge each other to attract customers, the cluster itself causes organic growth.

One of the important success factors for the clusters is consumer behaviour.

‘Destination venue’

Many Thais choose to go to the “destination venue” or cluster with a specific product. These clusters can stimulate a lot of money circulation.

On the other hand, department-store customers may spend more time hanging out than buying things.

However, in recent years, modern-trade malls have popped up in such cluster areas as Chatuchak, Worrachak and Bo Bae.

Some of the modern projects are not successful. For this reason, shopping-mall developers should think carefully, as each project may require capital of Bt500 million to Bt2 billion.

Professor Richard Cuthbertson, senior research fellow and director of OXIRM (Oxford Institute of Retail Management) Said Business School, said the theories of urban planning and development were dominated by a concept of linearity that does not easily accommodate adaptation, innovation and risk, especially in the current commercial environment.