Net interest income increased by 0.4 per cent while the net interest margin improved slightly to 2.36 per cent. Non-interest income fell by 1 percent as a result of lower gains on trading and foreign exchange transactions and a minimal decline in net fees and service income.

The decline in net fees and service income was caused by lower fees from securities business in line with capital market conditions, while fees from bancassurance and mutual funds rose.

As a consequence, the ratios of net interest income and non-interest income to operating income held steady at about 57 per cent and 43 per cent respectively, similar to levels in the same period last year, as a result of the Bank’s intention to diversify its sources of income. The ratio of expense to operating income stood at 45.3 per cent.

At the end of June 2019, bank loans amounted to Bt2,017,314 million, a slight drop from the previous quarter, owing to a decline in loans to businesses and loans made through the bank’s international network.

The ratio of non-performing loans (NPL) to total loans was 3.5 per cent, the same level as the previous quarter. The bank continued to focus on prudent control over credit underwriting, ensuring loan quality, and maintaining doubtful accounts at an appropriate level.

He said the target date followed changes to the company’s costs strategy and a plan to close unprofitable shops.

“We also set plans for Dean & DeLuca’s expansion in Thailand over the next three to five years, when about 100 stores will be opened, up from 11 currently. About five new Dean & DeLuca stores will be opened locally this year,” said Sorapoj.

Dean & DeLuca Inc, which manages the US operation, has been losing more than Bt40 million a month amid tough competition in the US food retail sector and higher operational costs.

“We are adjusting the Dean & DeLuca business to a more appropriate size by controlling expenditures both at its office and stores,” said Surapoj, adding that two of six stores had been closed this year after failing to meet targets. The measures had cut costs by 25 per cent and would halt overall losses by the end of this year, he said.

The company has also rejigged the structure of Dean & DeLuca by splitting its business between the US and Asia, said Surapoj, adding that the move would enable the company to better monitor its business in different regions. Dean & DeLuca Inc now makes up about 35 per cent of the business, with the remaining 65 per cent accounted for by Dean & DeLuca Asia (Thailand) Ltd. Dean & DeLuca currently operates 77 stores in 12 markets, up from 42 stores in six markets when PACE bought the business in 2014.

Dean & DeLuca Asia (Thailand) posted Bt630 million in total revenue in the last fiscal year (June 2018-May 2019) and Bt115.23 million in earnings before interest, taxes, depreciation and amortisation (Ebitda), up 13.3 per cent over the previous year. About Bt523 million of the revenue is from Thailand, with Bt79.8 million in Ebitda, and another Bt106 million from overseas (Bt35.43 million in Ebitda).

The company also plans to launch Dean & DeLuca stores in five major Asian markets in Asia over the next couple years – China, India, Indonesia, Hong Kong and Taiwan.

Group chairman Boonsithi Chokwatana said he aimed to boost the contribution from online sales from 4 per cent currently to about 10 per cent in the next three years. Total annual sales of the group has reached Bt300 billion,

ICC International, a subsidiary and the manufacturer and distributor of several local and international fashion brands, posted Bt13.37 billion in sales last year.

The fashion industry has been adversely affected by technology disruption with e-commerce playing a big role in sales and market share, said Surat Wongrattanapassorn, director at ICC International Plc.

“Some of our customers have even become entrepreneurs of the online shopping business, especially in low-cost fashion products from China,” he said, adding that ICC needs to make adjustments in view of the competition.

“Our group chairman Boonsithi said we needed to develop an ecosystem with big data for doing businesses in the future,” Surat said.

Surat said ICC had developed three major elements under the ecosystem framework: e logistics system, platform system, and a system for the expansion of offline stores connecting with online channels.

“For the logistics system, ICC is to build a new big warehouse, occupying a total space of about 74,000 square metres, near Suvarabhumi Airport. The warehouse, due for completion by the end of this year, will feature the latest software, Manhattan, for supply chain management,” he said.

ICC has also developed a platform system to connect with its clients via the His & Her Card, which has more than 2.7 million holders. Of the total, about 500,000 are active customers with 4-5 purchases a year at an average price of Bt20,000 per transaction. The cardholders have about five million followers on LINE application and about one million on Facebook. Altogether, there are nearly 20 million customers engaged in promotional activities for the group, Surat added.

He said ICC would be more open in building a relationship with its customers via CRM (Customer Relationship Management) activities in collaboration with its partners, including True Group which has more than 13 million members, Rabbit Rewards (10 million), as well as the loyal customers of Thanulux, another subsidiary of Saha Group.

“We are in negotiations with PTG Energy, the operator of PT gas stations, Max Mart convenience stores, and Pun Thai coffeehouses, for the joint launch of CRM campaigns to boost our marketing strength. We have many products to offer PTG, it is a win-win situation,” said Surat.

Surat said the company’s ecosystem in regard to offline/online trade facilitates the merger of product launches and promotions which can be transfered online via social network channels, such as LINE. Individual shoppers can buy the company’s products online, through Lazada and Shopee, or offline at Lawson 108 stores.

“The building of an ecosystem will raise the company’s efficiency in marketing, speed up the working process, share customer base and their earning privileges with all strategic partners,” he said.

Surat said ICC had invested about Bt100 million in the ecosystem. Its key objective is utilise Big Data in analysing and understanding consumer behavior and making projection of their demands. Such data will benefit the company in managing its inventory, as well as setting plans for new store openings. It can also anticipate the overall demands for new products. Also, it will be able to conduct one-to-one marketing activities with potential customers, and able to project sales more acculately.

The Makro Digital Store is a prototype of its food-service model, delivering added value via four dimensions, namely increased efficiency, better service, saving energy and having a lower environmental impact. The new system will also cut down on recurring retail issues such as lack of stock, long queues and quality control.

Makro’s in-store advertisements will also be digitalised in line with internet of things (IoT) generation, while maintaining its position as “your trusted partner” for modern customers.

Siriporn Dechsingha, chief corporate communications officer for Siam Makro, said: “Entering the 30th year of Siam Makro, we are determined to redefine our wholesale business in correspondence to today’s business environment through the integration of new technologies such as IoT and AI in order to deliver added value to our customers. In respect to that conviction, Makro Digital Store Lat Krabang will be the first retail store in Thailand that is able to connect its operation system and store management with staff, suppliers, and customers through digital solution.

“With digitalisation, customers will experience a whole new level of retail that is not only convenient, swift and definitive, but also personalised and informative as the technology is also linked with the Makro mobile application, which will notify members of the promotions and privileges they are entitled to receive.”

The new store, covering 6,700 square metres, has fully digitalised its operations, from cashiers to shelves, stock inventory, e-commerce system and overall energy consumption. All the data and details can be immediately monitored via the operation dashboard.

Every member of staff will be trained to ensure they have thorough knowledge and understanding of the technology within the store, before they help customers familiarise themselves with the technology.

“Makro believes that the sustainability of the wholesale business relies on integrating technology with human resource development driven by digital transformation. The digital store is a pilot model and a concrete proof of the effective use of various technologies. Looking ahead, the company plans to launch similar digital stores and will pick and choose certain technologies to integrate with applicable branches.”

The partners have tested the technology on use cases and with Internet of Things (IoT) devices, using the 28GHz spectrum.

Among the use cases is mobile surveillance involving the transmission of data from video cameras in vehicles via the 5G network. The data can be used to send an alert to drivers to prevent possible accidents.

Another use case is for communications between autonomous electric vehicles via the 5G network.

Presented at the show at BITEC in Bangna, the programme allows Thai franchise operators to enter the booming workspace industry and help Regus expand its global network.

Flexible workspace, sometimes known as co-working, has become a high-growth industry in recent years. The term refers to office space, meetings rooms and co-working areas that can be rented by individual workers or companies for temporary periods – from one hour to several years. The industry is estimated to be growing by 24 per cent each year. By 2020, 50 per cent of all workers will be remote most of the time. In 2022, the global mobile workforce will be 1.87 billion people. This is why global real estate giant JLL estimates that up to 30 per cent of corporate real estate could be flexible workspace by 2030.

Matthew James Kenley, head of partnership growth at IWG, said: “Three in ten buildings on every high street around the world could offer a new franchise opportunity in the coming years. The serviced office market is one of the most exciting growth markets in the world, and the next frontier for franchise operators. We are excited to partner with new franchise operators to bring the many benefits of flexible working to more people and businesses across Thailand.”

Regus has been running workspaces for 30 years, ever since it founded the industry in 1989. It has developed its business model through many economic cycles. Its operating model can provide partners with a highly attractive return on their investment, the company said. Part of IWG, a global operator of workspace providers with a network of over 3,300 centres in more than 1,100 cities and 110 countries. Regus now wants to accelerate its global growth with franchise partners worldwide.

“Imagine being given the chance to work with previously successful franchise industries such as restaurants or gyms at the beginning of their growth explosions. A similar or even larger opportunity awaits in the serviced office market. It’s an opportunity to diversify away from traditional franchise industries, and benefit from strong cash returns and significant returns on investment,” Kenley added.

As part of its new programme, Regus offers comprehensive infrastructure to support franchisees throughout the lifecycle of their investment.

“The global Regus franchise team works closely with its franchisees to ensure they have a framework to find the right location and design; are able to grow their market footprint backed by world-class operational and marketing support; and have the quality, 24-hour customer service Regus is known for,” he said.

The third instalment is more than Bt4.3 billion (including Value Added Tax).