Karmarts Plc (KAMART) is a multi-brand, multi-product company focused on the cosmetics distribution business and is listed on the Stock Exchange of Thailand. Its business includes a franchise model to distribute its cosmetic products throughout Thailand. Executive director Wongwiwat Theekhakhirikul discusses the company's strategy and outlook.What type of products does Karmarts offer to its customers?
Wongwiwat: Aiming for top 5 in Thailand
We offer a wide variety of products for our customers ranging from facial care, body care, makeup and accessories to hair care and nail care. Currently we have more than 2,000 different products of which 500 are our own house brands with the remainder coming from Korea, Taiwan, Malaysia, Vietnam, China and Japan. Our offerings are different from what is available in the market today as we aim to be first movers in each product category.
Also, what sets our products apart from the majority of the products in the market are the details: for example the ingredients that we use in each product that enhance a woman's skin, a product for women's elbows that helps to remove dead skin quickly, or a product that provides immediate results whereas competing products require 30-60 days use. It is really the minor details and the innovative products that we launch on a monthly basis that help to set Karmarts apart from the rest of the market.
Who are Karmarts' target customers?
We are focused on teenagers and first-jobbers and the age range of our customers is 15-35. We spend a lot of time understanding what a woman's needs are and we aim to complete their needs. With the successful expansion of our business we will look to expand our customer group to include products for a more mature female base from 35 years and up.
What are Karmarts' distribution channels?
Today we have four main distribution channels. First is our Karmarts franchisees of which we have 100 throughout Thailand; for our franchisees we assist in store design and product selection. Second is the traditional trade where our sales teams visit local cosmetics shops and offer our products and place orders. Third is modern trade which includes all the convenience stores throughout Thailand, the larger-scale stores such as Big C, Tesco Lotus and Makro, and finally through the internet via shopping websites.
Fourth is the export market which we just entered this year. Currently we export to six countries _ Malaysia, Laos, Cambodia, Myanmar, Vietnam and Singapore _ and next year we will have an additional three countries, the Philippines, Indonesia and China.
How does Karmarts market its products?
We employ several methods to market our products from PR to online advertising to newspaper advertisements, but we also create our own "Magalog" which is both a magazine and a catalogue for the general public and our members. It details our products and their uses and has articles that are of interest to our customers.
Also, at the beginning of next year we will launch our first TV commercial, but our best brand exposure is through our franchisees as our stores have a recognisable theme and design where existing and new customers want to visit and explore what new products we have and what new products will best suit them.
What are the biggest risks facing your business today?
Every business has a risk and it is up to us to understand the risks and resolve them. Four years ago Karmarts began with just a 25-square-metre office with three staff, and we have grown very quickly since then so we had to improve our franchise system, our inventory management and so forth, but in the end we compete with ourselves and our aim is to constantly improve.
What impact will the Asean Economic Community have on your business?
The AEC paves the way for improvements in logistics which should ensure easier delivery and shipment of our goods to our export markets. We have already been taking the necessary steps internally to ensure that our products pass the local FDA regulators in each country and that they can be easily registered in each country, so that our customers in our export markets can easily receive our products.
We hope that with the improvements in logistics combined with ourselves being fully prepared for the AEC that we can have more access to new business opportunities and customers throughout Asean.
Where do you see Karmarts in five years from now?
We have been researching the possibility of new product lines in the food industry and daily consumer products, and once we have identified what particular market opportunities exist, we will begin offering new product lines. As Karmarts has been expanding very well throughout Thailand, through the innovation of our products, our understanding of our customers and our relationship with our franchisees, we aim to be among the top five cosmetics businesses in Thailand.
The Executive Q&A Series is presented by ShareInvestor, Asia's leading financial internet media and technology company and the largest investor relations network in the region, with more than 500 listed clients. This interview was conducted by ShareInvestor. For more information, email admin.th@shareinvestor.com or visit http://www.shareinvestorthailand.com