Nanyang homes in on B2B
Nanyang Marketing, the distributor of Nanyang canvas shoes, is considering focusing on business customers to offset a tepid student shoe market that is feeling the pinch from a slower-growing Thai population.
Chakrapol Chandavimol, the marketing and sales director for Nanyang, said the company is confronting a challenging climate for the canvas student shoe market in Thailand, as population growth continues to slow here in a sharp counter to the global trend, with the UN forecasting the world’s population will rise to almost 10 billion people by 2050.
Thailand’s annual population growth rate has been below 1% since 2005. This year’s growth rate is estimated at 0.21%, falling from 0.25% in 2017, 0.30% in 2016, and 0.43% in 2015.
Nanyang is a maker of canvas shoes and flip-flops in Thailand under the trademarks of Nanyang canvas shoes and Nanyang ChangDao Flip Flop.
More than 300 million pairs of footwear have been produced by Nanyang since 1953.
Mr Chakrapol said Nanyang is committed to expanding its business through existing core businesses — flip-flops and canvas shoes — but more focus will be put on the business-to-business (B2B) market for organisations.
The company established a special team to manage business customers a year ago.
Nanyang is eyeing factories and warehouses, distribution and delivery providers, and speciality operators such as hospitals as potential clients.
He said B2B sales grew by 5-10% in 2017 against only 2% growth in general canvas shoes. Each organisation normally orders between 500-1,000 pairs per order.
The sales contribution from B2B was almost 20% of the company’s total sales, with the proportion expected to gradually increase to 25% in the very near future.
“Boosted by the B2B sales, 2017 had the highest growth for our canvas student shoe sales in five years. The overall market was flat because of the continued drop in Thai population [growth],” Mr Chakrapol said.
The company also started seeing an improvement in spending power in the first two months of this year, he said.
The company expects sales to grow by 5% this year to about 1 billion baht, with 85% contributed by the domestic market and the remaining 15% from the export market.
Thailand’s student shoe market is worth 5 billion baht.
Of the total, about 60% is taken up by canvas shoes, with 35% going to black PVC shoes and the remaining 5% to other types.
Nanyang controlled some 42% of the
canvas shoe market last year.
“The Nanyang brand has survived in the market for 60 years despite many brands providing competition,” said Mr Chakrapol, who last week was honoured as Asia’s top outstanding youth marketer from Asia Marketing Federation.
“I believe in the power of marketing strategies and our winning strategy is very simple: listen to customers and empathise with them,” he said.
“Moreover, the company is bold in thinking and acts differently and dares to take calculated risk. It is because we are not dead fish swimming with the stream. We believe that fashion comes and goes, but style never dies.”
Mr Chakrapol said the company will spend about 70 million baht on its marketing budget this year.
More social media will be applied to gain greater access to the young generation, he said.