Tanachira PLC's history begins with a personal passion for entrepreneurship, rooted in a family tradition of business ownership. My personal educational journey revealed a deep interest in retail, which became the focus of my career. The opportunity to collaborate with Kate Spade in Thailand marked a significant turning point. Initially advising the local distributor, we eventually formed a partnership to take over the Kate Spade distributorship. This venture became the foundation for Tanachira's entry into the retail market.
From the beginning, the vision for Tanachira was to go beyond the traditional "buy low, sell high" retail model. The goal was to create a meaningful and lifestyle-driven retail concept, where customers would find products that truly fit and enhance their everyday lives. This approach has shaped the company's growth and direction, focusing on building a brand that resonates with the values and needs of its customers.
We are achieving this with brands such as Marimekko, HARNN, Pandora, Cath Kidston and several others in Thailand and throughout the Asia-Pacific region.
How does the company manage customers?
Tanachira's journey in managing customer expectations began with its introduction of Pandora, a customizable jewelry brand. Customers initially questioned the value of these pieces, asking if they could be resold or pawned, and why they cost more than a standard gold item. It was challenging to educate customers that the true value of Pandora jewelry lies not in its material worth but in the memories and emotions it represents. A gift from a spouse or a memento from a special occasion isn't something one would typically pawn or sell.
As a retailer, Tanachira's focus has always been on creating a lifestyle brand, emphasizing the sentimental value of their products rather than a mere transactional approach. Building on this foundation, Tanachira expanded by acquiring additional brands and bringing new ones to the market. Over the past 14 years, this strategy has shaped the company into what it is today.
Why do brands decide to partner with Tanachira?To convince brands to partner with Tanachira, it starts with offering something unique that isn't immediately apparent. We focus on brands that are not already well-established in the market; if they were, they would likely choose a larger company with a broader portfolio. As a smaller player, Tanachira stands out by delivering a deep understanding of how to develop and position a brand effectively.
For instance, our partnership with Marimekko began after I noticed the brand's store in New York City and found it intriguing. I pursued the opportunity by connecting through the Finnish Embassy, which led to an introduction to Marimekko's CEO in Finland. After exchanging ideas and discussing our vision, this became the first phase of our partnership.
In the later stages, what truly sets us apart is our ability to showcase the growth trajectory and performance of the brands we manage. Our portfolio is diverse?ranging from Pandora and HARNN to Marimekko, GANNI, Cath Kidston and Gordon Ramsay group of restaurants?spanning various categories like fashion, jewelry, spa products and food & beverage. There isn't a single thread that connects all these brands; instead, each brand stands on its unique qualities and identity. This diversity allows us to cater to different customer needs while maintaining the integrity of each brand's essence.
Our strength lies in combining a strategic understanding of brand management with proven results, making Tanachira a sought-after partner in the retail industry. We don't see ourselves as mere distributors but as true partners who help brands grow and thrive in new markets.
Who are Tanachira's customers?
The key customer segments for Tanachira are those above the middle-income level, although this can vary based on how it is defined. We focus on three primary demographics: youth, women, and netizens.
By "youth," we refer to individuals who are actively engaged in their lives and well-being. They are neither too young to be indifferent nor in the later stages of life. They are aware of what is relevant, use technology effectively, and stay informed about what is happening around them. Women are, of course, a crucial segment, as they are often the key purchasers of our products. "Netizens" are those who actively search for information online, compare new products, and stay updated on the latest trends.
Our segmentation approach is unique because these groups are relatively insensitive to economic cycles. They represent individuals and families who, despite economic downturns, maintain their lifestyle, take vacations, and continue to spend on products that enhance their lives.
Has there been a permanent change in consumer behaviour since the COVID pandemic and has the shift to online been permanent?
The shift in customer behavior during COVID-19 was significant but initially perceived as a short-term change. As the pandemic acted as a catalyst, customers moved from offline to online shopping, forcing retailers to adapt quickly to capture this new demand since physical stores could not operate normally.
At Tanachira, we found that customers who were already happy with our brand were comfortable making the transition from offline to online shopping. This included purchasing items like dresses, where they already knew their sizes and trusted the brand. This shift was not just a temporary change; it has continued to this day, reflecting sustained customer loyalty. Unlike call centers or "chat and shop" models, which were more short-lived solutions during the pandemic, our customers continue to engage with us online, supported by their ability to research and read peer reviews.
Our efforts to build the online portion of our business have proven successful. For example, during Marimekko's one-hour advanced screenings, we achieved sales of THB 350,000 (around USD 10,000). These sales are not cash-on-delivery but prepaid before the products are received, underscoring the convenience and trust we have established. This success highlights our strong partnership with the brands we represent and our commitment to delivering a seamless and reliable online shopping experience.
Please explain the close working relationship between Tanachira and the brands that it manages
The relationship between Tanachira as a retailer and the brands it manages is built on mutual agreement and collaboration. Brand owners have their own guidelines and expectations, and we work together to determine how each brand should be sold and expanded across a region. While the brand owners focus on growth and increasing sales of their products, they benefit from the "sell-in" but also need to understand the "sell-out" performance. Tanachira provides ground-level insights that guide this expansion model, helping to meet every expectation of the brand owners.
Each brand has its own lifestyle and strategy, and our role is not to replace one brand with another but to diversify risk by managing multiple brands. Our approach starts with creating a sustainable, long-term growth strategy for each brand. For well-established brands like those under LVMH or Tiffany that have existed for over a century, our management approach would not apply as they are self-sustained. Instead, our focus is more on elongating the lifecycle of brands in the markets we manage to over 20-30 years by deeply understanding the brand's core values.
At Tanachira, we operate with a dual-brained approach: one side is scientific, systematic, and focused on cause and effect, while the other is artistic and marketing-oriented. Both are equally important for channeling the right type of communication and building the company with these attributes. The aim isn't just to grow quickly, achieve rapid sales, and then fade after a few years, nor is it to grow at a snail's pace and achieve nothing in 24 months. It requires a carefully planned commercial development strategy for each brand, envisioning the next five years of its introduction with key strategies in merchandising, marketing, and presenting these plans to the brand owner.
For example, with Marimekko, we presented a plan 10 years ago. The brand's representative questioned whether we could expand beyond five locations in Bangkok. At that time, we believed five was achievable. Today, we have 15 locations, surpassing all expectations and contract figures. The brand core values are not easy to appreciate, but the success came from developing a deep understanding of the brand's DNA, mastering the art of communication, understanding cause and effect, and comprehending the brand's economics. It's never a matter of simply copying and pasting a strategy from one market to another.
Our goal is to build long-lasting relationships with brands by creating tailored, thoughtful growth plans that ensure the brand's relevance and success in the long term in each of the markets that we manage.
What separates Tanachira from its competitors?
It is our fluidity and adaptability. Unlike other companies, we present ourselves differently by focusing on segments that align with our core strengths. If a brand or category does not fit into our target segment, we simply won't pursue it.
Our fluidity allows us to explore new categories, manage new brands, and enter entirely new ventures, provided they meet our financial metrics and align with our lifestyle concept. We started with jewelry and accessories, expanded into fashion, acquired a company in beauty and wellness, and then ventured into the food and beverage (F&B) sector. No other retailer has managed such diverse expansions, and while each step presented its own challenges, our approach has always been dynamic.
A prime example of our flexibility is when we were granted the franchise right to open an F&B establishment with Gordon Ramsay, even though we didn't have a culinary team at the time. This opportunity came about due to the success of integrating the Marimekko brand into a cafe concept, which intrigued Gordon Ramsay's leadership. The management of Gordon Ramsay wasn't only looking for a culinary expert but rather a partner who could carry brand as a lifestyle F&B venture that could thrive over a decade. It's about the complete experience?food, service, and creating a personalized environment where even the waitstaff remembers your name. This adaptability is what we refer to as "fluidity."
The retail landscape today is very different from the past. Customers no longer simply walk into a department store; they often search online and go directly to a specific shop or destination. People have less time, and everything must be more meaningful. I don't just collect brands; each decision is thoughtful and aligned with our vision. The evolution of retail will continue to dictate how we maneuver each year.
Our aim is not to rely solely on Thailand. We've already expanded into Vietnam, Singapore, Japan, and China, and we continue to build a larger and more meaningful regional presence. This approach helps us navigate the changing retail environment and positions us to grow sustainably across diverse markets.
How does Tanachira manage the online and offline differences in each of the countries that it operates in?
Consumer behavior varies significantly across countries, and understanding these differences is key to managing successful online operations. Tanachira's success online would not have been possible without first building a strong, loyal customer base and fan club for the brands we manage. During the COVID-19 pandemic, we had to quickly develop the necessary infrastructure and build a dedicated online team. Today, we have a team of up to 40 people handling our online business in Thailand, which now contributes 12% of our revenues.
In the past, managing an online presence was simply updating the website and answering customer queries. Now, it's about understanding why a brand works and how to represent it online effectively. Consumers browse websites in a 2D format, unlike the 3D experience of a physical store, so visual merchandising online must be just as compelling as it is offline. Customers need to understand the collection, not just see isolated images; it's about displaying products online with the same care as we would in a store. We bring our expertise in offline visual merchandising to the web, ensuring a seamless and attractive online shopping experience.
Our team works together to package and present the brand consistently in the eyes of the consumer. A large part of this is the responsiveness of our customer service team. Customers get frustrated when they don't receive accurate information or consistent answers. Therefore, we maintain consistency from offline to online, understanding the product inside and out, and offering the same product knowledge and engagement as if the customer was standing in front of us. Pricing and promotions must also be consistent across channels. We enforce a zero-complaint policy, ensuring high customer satisfaction.
What is/are the main challenge(s) facing your business?
The single most difficult challenge for Tanachira has been building a team that fully understands and aligns with the company's vision. It requires a lot of evidence and proof to convey that we are not a typical company focused solely on buying low, selling high, and representing multiple brands. Our philosophy is about laying strong foundations and building for the long term?not just seeking quick returns. We emphasize the concept of "Customer Must Have" rather than "Customer Should Have," focusing on creating a lifestyle retail experience that isn't just about following trends but about fostering demand for the brand's longevity.
Developing this understanding within our team involves creating the right structure, policies, and systems to ensure the company grows stronger and healthier over time. These things take years to develop; we are only 14 years in. Today, we have 700 employees, which is a clear testament to our progress. From day one to now, we have seen significant growth, including being listed on the SET (Stock Exchange of Thailand) and achieving the highest sales in our history.
Building this kind of team takes character, dedication, and a commitment to invest effort and life into our vision. We are creating a culture where people are part of this journey for the long haul, contributing to a sustainable and meaningful future for both the company and the brands we manage.
Why did Tanachira decide to list on the SET?
First, it was about increasing our visibility and reputation, embracing the notion of transparency and being known in the public domain. Listing on the SET also enables us to attract talent and bring in the right people to help take the company to the next level. Second, remaining a private company would limit our resources compared to what could be achieved with public visibility and a stronger balance sheet, now as a public company, we have a solid foundation for future growth.
Where do you see Tanachira in the future?
In the next five years, the vision for Tanachira is to elevate it to a level where no other retailer has been before. This involves a combination of strong brands, excellent services, and products that satisfy a growing customer base, while expanding our reach to regional customers. The plan includes enhancing our offerings in areas such as health and well-being, food and beverage, and possibly even sports, integrating these with the products we provide. We may also venture into hospitality, merging it with our retail platform.
While it is hard to predict the exact form this will take, the idea is to build a flexible and dynamic foundation that allows us to adapt to changing consumer demands. This adaptability will be key to our growth and survival in the ever-evolving retail landscape.
