BANGKOK, Nov 29 (Reuters) - Thai Union Group Pcl is planning to expand its seafood empire by venturing into new markets and channels such as online sales, its chief executive said on Wednesday.
The world’s largest canned tuna producer plans to widen its reach to China, Southeast Asia and the Middle East, Thirapong Chansiri told reporters at an event to celebrate the company’s 40th anniversary.
Thai Union was still on track to achieve its $8 billion sales target by 2020, but profitability was a higher priority, he said adding the firm is eyeing gross margins of 20 percent by 2020 from current levels of slightly below 14 percent.
A key driver of its emerging markets portfolio was China where it exited a joint venture and began solo operations this year, Faisal Sheikh, Thai Union’s Managing Director of Emerging Markets, told Reuters on Monday.
Sales of $10 million after six months in China “exceeded expectations” said Sheikh, adding that Thai Union is targeting revenue in China of $85 million by 2020 through store penetration and expansion of product mix.
It is also tapping into the e-commerce boom, putting up stores on Chinese platforms Alibaba and JD.com, but was facing challenges, Sheikh said.
“We’re finding that it’s far more difficult to disrupt a customer’s journey if you’re a new brand,” he said, adding that the firm was experimenting with online and offline integration.
“Our strategy is to convince consumers that this is a good product through offline penetration and then ask them to fulfill their subsequent purchases online,” he said.
July-November online sales accounted for 10-15 percent of total revenue in China from food service customers and consumers, he said.
The U.S. and Europe are the company’s biggest markets, contributing 70 percent of sales, while emerging markets account for 2 percent.
Thai Union reported earnings of 1.74 billion baht in its third quarter that ended in September. (Reporting by Chayut Setboonsarng; Editing by Sunil Nair)