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19 Oct 2020

Econ Digest

“Shop Dee Mee Kuen” program will bolster the retail sector and stimulate spending during the year-end of 2020

The government has introduced a series of spending stimulus measures. Among them is the “Kon La Khreung” program (Let’s Go Halves or the government’s 3,000-Baht cash handout program) to help small daily necessity product retailers, such as “Blue Flag” stores, groceries and small retail shops. Another of the measures is the “Shop Dee Mee Kuen’’ program (Shop and Payback, the program offers taxpayers income tax deductions when spending up to THB30,000  for products and services) to assist retailers which have VAT registration and are able to issue tax invoices, most of which are medium-to-large retailers. Given this, KResearch expects that the “Shop Dee Mee Kuen’’ and “Kon La Khrueng” programs, which are aiming to shore up spending during the coming year-end, as well as other stimulus measures introduced earlier, will help support the overall retail sales of the year to contract at a slower pace of 6.0%YoY, compared to the 7.2%YoY contraction that may occur if there were no stimulus measures at all.

 

A survey conducted by KResearch on the spending behavior of consumers under the “Shop Dee Mee Kuen’’ program (which limits spending to no more than THB30,000 per person) shows that the top three most popular product and service categories are restaurant dining, IT devices and personal care products (namely shampoos, liquid soaps and toothpastes etc.). However, the program may not lift such spending significantly, because consumers often dine out and purchase those personal care products anyway. Nevertheless, teenagers and working-age people will likely purchase more IT devices. Meanwhile, most consumers intend to eat out at restaurants and shop at stores mainly in shopping malls because these offline channels offer complete ranges of products and services, while the e-marketplace is the preferred shopping platform for the new generation of consumers (teenagers and working-age people). In the meantime, retailers may need to put preparations into place, such as ensuring sufficient stock, offering tax invoice delivery services or issuing electronic tax invoices (so that consumers do not have to wait in long lines), concurrently with such stimulus measures in order to facilitate consumers in easily making spending decisions.

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