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   BUSINESS NEWS

HEADLINES [click on headline to view story]:
KSC & BOA to launch new e-commerce shopping site
 
Phuket tourism jolted by Taiwan aftershocks
  
Smuggled VCD players flowing into border towns
 
Property management firms see boom in business
 
Hard times for hundreds of outbound tourism agencies
 
Distributor predicts the end of the whisky era

TV commercials ordered off the air

KSC & BOA to launch new e-commerce shopping site

Internet KSC and the Bank of Asia are to open a new Web site next month after months of experiments in connecting the site with the bank’s credit card operation unit. The new Web site, Thaicybermall, will be a shopping mall on the Net that will offer small investors the opportunity to own a cyber-shop.

KSC initially negotiated with Krung Thai Bank for the transaction deal.

According to Dr Srisak Jamornmarn, executive chairman of Internet KSC, all transactions will be made by credit cards through the BOA network. An investor will have to pay a Baht 3,000 entrance fee to open a shop, while ‘space’ rental fee will be Baht 1,800 a month, Dr Srisak said. Thaicybermall will in return provide shop owners with a domain name and a home page, he said.

More than 1,000 shops are expected to join the site, including about 300 produced by post-graduate students of Assumption University.

Internet KSC will allow foreign investors to join the plan to increase the registered capital to Baht 1 billion.

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Phuket tourism jolted by Taiwan aftershocks

Earthquakes have not only rocked Taiwan, but Phuket is feeling the aftershocks as well. Hundreds of Taiwanese tourists due to arrive in Thailand’s southern resort island in months to come have asked to cancel their trips. Tour groups from Taiwan have been among the main groups of visitors to Phuket during the low season from May to October.

Most Taiwanese tour groups, which usually stay at downtown hotels, have already canceled bookings for October and November this year, said Vichai Ruengjaruwattana, general manager of Sunshine Tour, a major tour operator.

However, Pamuk Atchariyachai, president of the tourism association in Phuket, who is also managing director of Kata Hotel Groups, said that beach side hotels will be less affected.

More Taiwanese tourists have been visiting the Kingdom this year due to the economic recovery in the island state. About 500,000 Taiwanese visited Thailand in 1998, up from a total of 448,280 entries in 1997.

It is not known yet if the quakes will lead to withdrawals of investment projects by Taiwanese investors.

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Smuggled VCD players flowing into border towns

A large number of video compact disc players from China, Hong Kong and Korea have been found in Thailand’s major border towns and are spreading fast into other provinces, including Bangkok. The cheaper devices, almost all of which are smuggled into the Kingdom through neighboring countries, have completely controlled the local electronic consumer markets, industry sources said.

A survey has found that Chinese and Korean made models, with street prices ranging between Baht 2,700 and Baht 3,300 a set, or three to four times cheaper than the Japanese brands, have been found in Haad Yai in the south, Nong Khai in the northeast, and Chonburi in the east. A southern dealer said the Chinese-made devices were smuggled through Laos to Chiang Rai and then across the Kingdom to Haad Yai.

Sales of VCD units by Sony and Panasonic have dropped by more than 50% in recent months in the border town of Mukdaharn, which is the gateway to Vietnam. However, both Siew National and Sony Thai said low quality items are only slightly affecting the sales of their two brand name products.

A VCD movie disc costs only Baht 99 in Bangkok, an important factor which is helping spur sales of the players.

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Property management firms see boom in business

Property management services are now necessary for many property developers who want to keep their asset value up in the slumping market. More foreign, as well as Thai management firms, have been seen entering into the business in recent months. A recent survey found that there are currently 19 Thai-owned companies in the property management service business, from 11 earlier.

A survey by Saen Siri Property Plus Co., the management arm of Saen Siri Group, found that First Pacific Davies has replaced CB Richard Ellis as the largest management firm. First Pacific Davies controls 15 apartments, with a total of 3,217 units, and 10 other office buildings covering 468,000 square meters. CR Richard Ellis currently manages 7 apartment buildings and 9 office buildings, covering a total of 928,00 square meters.

Newcomers to the market include Andrew Park, Chamber International and Nite Frank. A few others, which include Collier Jardine, Brookhill Park, Management Asia, and Chesterton Thai, have been keeping a low profile, as high competition has forced service rates down.

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Hard times for hundreds of outbound tourism agencies

The depreciating baht and the government policy to dissuade Thais from going abroad have been a real nightmare for hundreds of outbound tour agencies and operators, and the situation is worsening. About 80% of the agencies are now returning to the domestic tour market. About 400 others have also been adversely affected.

According to Manas Pipattanan, president of the Thai Tourism Agencies Association, which oversees outbound tourism and businesses, said the situation has reached the point of no return as Thais choose to stay home. Outbound sales increased in April this year but have continued to decline over the past 5 months.

Only sales of Australian, New Zealand and other short-range packages are surviving in the market.

Meanwhile, travelers have turned to buying tour packages directly from hotels and airlines.

Insiders feel there is no hope for outbound tour agencies during the high season this year, as the depreciating baht, which means that traveling abroad will be more expensive, has worsened the situation.

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Distributor predicts the end of the whisky era

Whiskies, which have dominated the alcoholic drink market over the past few decades, may have already entered into a slump. Sales now constitute 90% to 95% of the market billing, down from 100% in earlier years. If this trend continues, whiskies will capture only 50% of the alcoholic drink market over the next five years, as drinkers turn to milder drinks. Industry sources say that drinking behavior has been changed partly by foreign tourists and female drinkers, who prefer softer spirits.

Sales of other spirits - wine, gin, liquor, and rum - which currently share 5% to 10% of the market price, have significantly increased from almost zero in previous years, said Arthorn Sitthisomboon, marketing manager of Allied Domek Spirits and Wines (Thailand), distributor of Ballantine scotch and several other brands of spirits. Sales of gin, brandy, liquor and rum comprise 50% of Allied’s earnings.

Meanwhile, Allied is preparing a late-year sales promotional campaign for Ballantine to compete with Johnny Walker Red.

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TV commercials ordered off the air

TV commercials for two products promoted by the Siam TV Media Co., a leading direct sales company, have been banned after the company failed to prove the advertised quality of the products. The Consumer Protection Office of the Prime Minister’s Office ordered Siam TV Media to correct the wording used in their voice-overs of the commercials before they can return to the screen.

Siam TV Media has tried during the past several months to convince TV watchers that its Penalli pen is the strongest and most durable writing utensil on the market, and that the Static Duster is a magic brush.

But the company failed to prove that the pen will still be in good shape after its point is hit hard against the wall. The company admitted that the point of Penalli pen will not be the same after a hit.

The ‘magic brush’ also failed to create enough static electricity to help ‘suck’ dust while cleaning/sweeping. After rubbing it against hands for a long period of time, the Static Duster produced only a weak charge of static electricity, not enough even to draw up hair.

The Consumer Protection Office said the commercials have misled the public long enough and have banned the ads.

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Updated by Boosiri Suansuk