If you are a lifestyle retailer and you want to open a store in Thailand, you could do worse than to follow the real estate footprint of Moshi Moshi, and as Moshi Moshi itself prepares to step out of its native country and expand overseas for the first time, you might want to monitor where they go pretty closely.
Thailand’s mashup of Smiggle, Daiso and Miniso now has a foothold in 158 locations in 59 of Thailand’s 76 provinces plus Greater Bangkok. It is a familiar sight in most of Thailand’s quality malls, but unless it starts to drill deeper into less desirable mall locations, then its domestic growth prospects lie in standalone stores in unconventional locations such as adjacent to university campuses.
Indeed, 2025’s business plan includes piloting large-format stores in such locations. It’s not a bad ploy and it fits well with the broader expansion strategy, but even so, this is a company with much greater ambition than selling pens to students.
Currently, of the total portfolio of 158 units, 59 are in the Bangkok metro area and the rest are sprinkled liberally over the national map in strategically favorable locations. Despite strong competition in each of its 12 merchandise segments ― home accessories, bags, stationery, cosmetics, fashion accessories, beauty, apparel (primarily t-shirts and hoodies), snacks, toys, plush toys, IT gadgets, and ‘Etc’, as well as seasonal product lines – Moshi Moshi believes it holds significant competitive advantages in the frantic pace of its new product development that keeps stores fresh and revisitable. In the third quarter, Moshi Moshi introduced another 3,000 SKUs and unveiled two special collections. It also has significant differentiation through licensed products and through the design-intensiveness of everyday functional items.
Moshi Moshi has three main target customer groups: 13-17-year-old teens, 18-25-year-old students and working professionals, and working adults aged 26-34. Cutting across each of these segments are Chinese tourists, whose return in bigger numbers to Thailand is giving Moshi Moshi some extra lift. The beauty of the merchandise and format is that it sits comfortably inside several different high-quality real estate platforms: principally regional malls, lifestyle malls and hypermarket-anchored centres ― hence its nearly 160 stores.
For 2025, the company’s business plan is to end the year with about 200 stores. The plan includes a “presence in other countries in Southeast Asia” but it is unclear whether the 40 incremental stores in 2025 include units outside Thailand, or are in addition to overseas branches. The market for Moshi Moshi’s products and price points in neighbouring countries would seem to be substantial and the company has not been at all reluctant to open shops at a rapid pace.
Total operating revenue for the third quarter was 735.8 million Thai baht (US$23.7 million), up nearly 26 per cent on the third quarter of 2023. This brought revenue for the first nine months of the year to 2.1 billion baht ($66.6 million), up 19.0 per cent on the base period. The company’s leadership has previously stated the objective of maintaining revenue growth at around 20 per cent so they are pretty much right on target after something of a setback in the previous quarter. Supply chain issues that had caused product shortages in the first half of the year were resolved. New licensed merchandise hit the stores too.
Same-store sales growth was 5.7 per cent but store growth weighed in heavily in achieving the broader growth goal: another eight were opened in the third quarter bringing the total increase to 37 over the course of 12 months. That represents a 30 per cent growth in the store fleet. Along with the new store openings, the company is also busy with renovations to existing units to elevate the in-store experience: product-specific furniture is being introduced for perfumes and diffusers, and for hair accessories, jewelry and stationery.
The gross margin percentage of revenues in the third quarter was 52.8 per cent, a decline from 53.1 per cent in the corresponding period a year ago. However, better control of selling and administrative expenses helped deliver an increase in net profit for the quarter of 108.1 million baht ($3.5 million), up a shade under 30 per cent from the third quarter in 2023. Net profit for the first nine months of the year is up 24 per cent.
The percentage of sales attributable to wholesale distribution points (a gift and stationary store called OK Station and an outlet in Platinum Wholesale Mall in Bangkok), declined to 15 per cent, which is predictable in view of the expansion of the retail store fleet.
Moshi Moshi’s merchandise is at very accessible prices and can flourish in low-income demographics and in economic downdrafts. Nonetheless, the company’s leadership takes further encouragement from Thailand’s economic situation, which has shown signs of improvement in the back half of the year. Domestic consumption has held up decently despite the high level of household debt and the tourism sector has rebounded.
According to the company, Thailand’s retail sales increased by 8.9 per cent in the first 9 months of 2024, on top of 11.7 per cent growth in 2023. The retail sector is being supported by the government’s economic stimulus measures that include the 10,000-baht digital wallet program, and no small amount of arm-twisting to extract a cut in interest rates from the country’s central bank, which relented in October and shaved a quarter-point off its benchmark rate.
Also, the government has relaxed visa requirements for key tourism source countries like China. Speaking of China, Moshi Moshi is closely monitoring the situation there, since weak domestic consumption is forcing the country to rely more heavily on exports just at a time when the incoming US administration is threatening trade barriers. This is a double-edged sword since it should lower the price of goods in Asian countries sourcing from China, while at the same time potentially creating more price competition in Moshi Moshi’s retail segment.
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