Thai consumers upend brand choices as they seek comfort in year two of Covid

As Thai consumers have gotten used to living, working and playing from their homes in the second year of the Covid pandemic, they are making sweeping changes to the brands they patronise. With comfort and convenience now getting top billing, Thai consumers are backing brands that can pivot their offerings to suit these rapidly changing requirements and rejecting those that can't keep pace, an analysis of the Thailand top 100 brands reveals. 

For the record, Samsung, Apple and Panasonic were the top three brands in Thailand this year, the same as 2020. Below them, LG jumped seven places to occupy fourth in the listing, and there were single-place moves up and down between fifth and eighth place, while Nestle slipped three places to ninth and Google held strong in 10th. 

The serious shifts then, were at the other end of the table, where brands jostled to get into the top 100 and keep their place there. Among the losers at the bottom, American International Assurance (AIA) fell by 42 places and just kept its place at No. 100, as did Meiji, which slipped to 96th. Other steep falls were seen for KFC, Louis Vuitton and obviously with travel hammered, Air Asia and Thai Air. 

Biggest drops

In contrast, this year's listing also saw several brands markedly improve their ranking. Take for example a look at the top risers. Shooting into the top 100 this year are delivery brands GrabFood and Foodpanda (despite a controversy that cost it a couple million users), which landed at 26th and 30th place in this year's listing. Elsewhere, tech brand Epson went up 202 places, SK-II was up 163, Electrolux rose 151 and Muang Thai 122. Just outside the top 100, Guess went up 143 places to rise from 246 to 103 and could be jostling for a top 100 place soon.

Biggest gainers 

In terms of the delivery and food brands' rapid rise, Thailand is known for its street food and had a strong culture of eating out, pre-pandemic. Nielsen Thailand, in fact, found an average of 56 food trips monthly per person, and often all three meals were bought from vendors, points out Kanaporn Hutcheson, CEO of GreyNJ United.

A Foodpands campaign announcing the service's availability across Thailand

"Even pre-covid, the food delivery sector has been in fierce competition, with market leader GrabFood having to deal with aggressive expansion nationwide by Foodpanda, " she says. "With both delivery platforms undertaking strategies such as partnering with local food vendors, it is a win-win for consumers as they get convenience and availability of a wide variety of foods."

Nuttavena Thepchatri, UM Thailand's chief operating officer, adds that heightened competition doesn’t come from only key players like Grab and Foodpanda but also local brands including Robinhood from Siam Commercial Bank, one of the biggest banks in Thailand and newcomer Airasia which took over Gojek and launched recently.

Thais' love for food is visible beyond these delivery apps too. In this year's listing, brands such as Sizzler (166 to 80) and Oreo (131 to 75) have risen fast, as consumers have opted to patronise comfort food offerings when locked down.

"Oreo would have no trouble at all adapting to consumers going online rapidly since every online grocery in Thailand from Big C to Tesco Lotus to Tops Market will deliver Oreos in multiple sizes, flavours or formats at the click of a mouse," explains Thomas Sutton, general manager, SEA, Landor & Fitch. "Sizzler is almost as easy to access online. The brand now has 40 restaurants throughout Thailand and can be ordered via Grab Food, Foodpanda or Line Man."

The drop in Coca-Cola (24 to 59) and Pepsi (50 to 83) is most likely due to continued reduction in consumption by Thai consumers of cola-like fizzy drinks. "This has been a trend over the last several years as consumers have switched to energy drinks, fruit drinks and ready-to-drink teas, partly for reasons that these are perceived as healthier and partly because Thailand’s aggressive taxes on sugar content have increased cola prices," Sutton says. "I suspect the pandemic and its tendency to focus the mind of the consumer on health has accelerated this decline."

However, it isn't only food and delivery apps that have been red-hot in Thailand in the past month. Over much of the past 12 to 18 months,  as consumers focused on upgrading their homes, other brands also saw their equity rise.

"During the pandemic, the combination of increased worry over one’s health, greater isolation at home away from family and friends, and sudden changes in lifestyles as well as other challenges negatively impacted the mental and emotional health of Thai consumers," explains Jacqueline Alexis Thng, partner and Asean Lead, Prophet. "Thai consumers looked to rituals and brands that offered them a sense of trust, consistency, and safety, which is why comfort foods from Oreo to Sizzler relieve many of the emotional anxieties." 

For example, Oreo’s “Stay Playful” campaign during the Thai festival of Songkran instilled a message of optimism and encouraging consumers to bond with their family members. In addition, with health being the new focus during pandemic, consumers become more conscious in their food and beverage selections. This lack of ‘healthy living” messaging for Coca-Cola and Pepsi may have contributed to their decline in rankings, but these brands are now innovating their products to meet consumers’ growing health needs. Both brands  just unveiled new no sugar products. 

This flux in brand rankings is visible beyond food and delivery brands too. Sora Kaitkanarat, Initiative Thailand's CEO says that under successive lockdowns, the cultural meaning of home is disrupted. "The definition of ‘living’ at home has shifted from just a family and private place to a workplace, classroom, gym, leisure space, breakaway dining, and a shopping place," he adds. "The share of wallet that used to separate from travelling, shopping, dining, sport, and many other passions has been united into one, making a home multi-purpose living space."

This trend is reflected in brands across different segments seeing a spike in their ranking in this year's listing. For example, towards the bottom of the Top 100 brands, Epson, the maker of IT peripherals, has risen to 88th place from 288 last year, even as further up, home appliance maker Electrolux has climbed from 209 to 58th place. As the focus on health and wellness was accentuated, pharma brand Paramax was up sharply as was insurer Muang Thai. 

As brands have raced to fill up this demand for a multi-mode home, their stickiness with consumers has been varied. Take for example, the cosmetics segment, where Shiseido has fallen nearly 100 places from 136 to 237, even as SK-II has risen rapidly from 237 in 2020 to 74 this year. 

Prachawan Ketavan, senior strategy director at Superunion Thailand, says SK-II enjoyed greater brand loyalty due to ongoing initiatives across the entire brand mix that have kept consumers' attention and established meaningful and emotional engagement during this gloomy time. "The brand also injected design into their hero product," he adds. "Each festive season, SK-II releases limited edition Facial Treatment Essence, its signature and most-awarded bestseller. It is what all Pitera fans look forward to keeping in their collection."

Prophet's Thng adds that SK-II has been able to latch onto the changing sentiment that has prompted many brands to develop digital-first strategies to meet evolving consumer behaviours. "SK-II was quick to reinforce its digital presence to strengthen engagement with consumers, by unveiling its first online flagship store on Lazada," she says. "Within this flagship store, SK-II offers personalised beauty advice with a virtual skincare consultation through the in-app e-Beauty Consultant chat function, which in turn helps elevate a transactional process to one that gives consumers a personal experience with a human touch." In addition, purpose-driven campaigns such as its recent Change Destiny initiative likely elevated SKII’s brand image. 

If much of the story in Thailand and neighbouring markets such as The Philippines has been about consumers making their homes into multi-purpose units and focusing on greater comfort and convenience, going out into public, in a country with around 15,000 to 20,000 covid cases daily has become fraught with risk. Rather than risk public transport, Thai consumers seem to be more aware of alternate options, with taxi services (All Thai Taxi zooming into the top 100 at 81 and Grab staying steady in the top 20, even as outside the top 100, Thailand Car Rental went up from 225 to 149 this year) seeing a boost in their rankings.

"The rise in awareness of ride-hailing services during a lockdown makes sense since the use of these services has increased significantly during the last 18 months as the preferred alternative to buses, trains or subway cars crowded with people masked and unmasked," says Sutton of Landor & Fitch  "Should the sentiment towards public transportation continue to skew negatively, transportation hubs will need to adapt their facilities to be more health conscious and ingrain hygiene and sustainability messaging in their branding."