Thai food, cosmetic firms tap tourist boom

A man waters a snail in the process of producing cosmetics at a snail farm at Nakhon Nayok Province, Thailand on May 11, 2018.
A man waters a snail in the process of producing cosmetics at a snail farm at Nakhon Nayok Province, Thailand on May 11, 2018. PHOTO: REUTERS

Rising demand from visitors, especially from China, boosting profits, share prices of firms

BANGKOK • The label on the pink and white box of face cream sold in a Bangkok hypermarket proudly declares that it is based on a "snail secretion filtrate moisture system".

The Snail White branding - as well as some positive Internet reviews - was enough to have Chinese tourists recently lining up to buy the slime-infused product.

Ms Alice Chen, 21, a Chinese college student, says she saw the face cream reviewed online and wanted to try it out because she could not get it back home.

And a 22-year-old Chinese tourist also at the Big C Ratchadamri store, who gave her name only as Yvonne, said she bought some - it retails at about US$40 (S$54) a box - because "a blogger said it was good and inexpensive".

Meanwhile, at a dessert cafe just up the road in Bangkok's upscale Siam Paragon shopping centre, another group of Chinese tourists take pictures on their phones of whimsical treats made from durian.

About 11 million Chinese tourists are expected to come to Thailand this year, up from just over 1 million in 2010, making China by far the biggest source of tourism here. And they are spending more per head than previously, according to Thai government figures.

And it is not only the hotels, tour operators and airlines that are benefiting. A big slice of this spending is also with retailers, restaurants, and food and cosmetics makers that target the Chinese audience.

Investors have taken note, driving up the share prices of many of the companies concerned to high price-to-earnings ratios.

Do Day Dream, the company behind the skin-whitening Snail White cream, is one. Boxes of its signature cream, which it says it makes from snail slime extracted using a process done in South Korea, are stacked high at Thailand's airports and malls as it has become a must-buy item for many Chinese visitors who covet paler skin.

Sales of the product have been skyrocketing since 2014 as beauty bloggers in Hong Kong and Singapore gave it rave reviews, according to Do Day Dream chief financial officer Piyawat Ratchapolsitte.

Last year, the company's revenue ballooned 35 per cent to 1.7 billion baht (S$71 million) as it also built a strong Thai domestic market and grew online sales direct to Chinese consumers. It also sells other snail secretion-based products, including shower gel and lotions.

The sales to visitors are at risk, Mr Piyawat said, if for any reason there is a sudden drop-off in Chinese tourists. This happened briefly in 2015 and 2016, when the Thai government made it much more difficult for the tour operators offering really cheap packages - known as "zero-dollar tours" - to the Chinese.

Another Thai beauty firm that sells colour cosmetics and skincare products, Beauty Community, is also seeing substantial growth.

Chief executive Suwin Kraibhubes said he expects tourists from China and South-east Asia to account for 15 per cent of revenue, which will help him reach a 20 per cent growth target this year.

Another sweet success story is After You, which has 28 cafes throughout Bangkok, with six in tourist destinations such as shopping malls and along the Skytrain line.

The cafe, known for long queues and its Shibuya Honey Toast - a block of bread served with ice cream - was initially popular among Singaporean and Malaysian customers.

But in 2016, Chinese tourists began to pour into the cafes, said After You CEO Maetup Suwan. "Tourists see our long queues, a picture on social media or read a great review and want to try," he said.

After You has capitalised on the flow of Chinese customers to set up "durian rooms" last year, offering fresh desserts aimed at the fruit's lovers. Durian is often banned in taxis, hotels and airlines around the region because of its pungent smell.

Chinese tourists are also snapping up savoury snacks. Taokaenoi's crispy seaweed snack has been a hit for years.

About 20 per cent of Taokaenoi's domestic sales last year were to tourists, the company's head of investor relations, Mr Koosoon Rattanaporn, said, while 60 per cent came from exports, nearly half of them to China.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 19, 2018, with the headline 'Thai food, cosmetic firms tap tourist boom'. Print Edition | Subscribe