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BitesizeBKK Newsletter Edition 14 Friday 2nd February 2024 | | |
Welcome back to another week of This Week, Wrapped with Bitesize! We wished that we could start February on a more positive, uplifting note, but it seems that news of slashed GDP estimates and rising household debt is all that’s dominating the headlines. Beyond that, we’re still faced with troubling PM2.5 levels, but we should also find joy and happiness in the work that we do every day. We hope you are doing the same. As always, we wish you all a happy weekend. If possible, please forward this email to someone you like!
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| | | This is what we’re thinking about (and digesting) this week. | | | Bank of Thailand to likely slash 2023-24 GDP figures
This week, the Bank of Thailand admitted to over-estimating Thailand’s Q4 figures. The lack of economic activity and investments will likely mean that GDP estimates will be revised in the next meeting scheduled for 7th February. According to the latest press briefing, the BoT expects Q4 growth to align with Q3, which was an expansion of only 1.5%.
With Q4 numbers weaker than estimated, this will also impact the GDP estimates for 2024, as Thailand’s economic growth was more sluggish than expected in the last few months of 2023. If we also factor in the delay and potential pause of the digital wallet scheme, there will also be a lack of short-term economic stimulation.
The BoT also cited weaker demand for exports, due to a slowdown across the globe, which also contributed to rising inventory for Thailand.
🥤 Bitesize Take: Thailand’s economy has been half asleep for the last few years, and 2023 has shown just how slowly we have grown, with GDP numbers falling behind other regional peers. Although we won’t see the concrete data from the BoT until after next week's meeting, it’s safe to say that numbers will be revised downwards. The BoT’s correction comes amid rising pressure from government officials and advisors to the Prime Minister to slash rates to aid the economy, particularly struggling SMEs. Is it time to worry about the state of things yet?
Thailand’s household debt poised to surpass 91% of GDP
When it rains, it really pours nationwide. TTB Analytics, an affiliate of Thanachart Bank, predicts that by year-end, Thailand’s household debt will soar to 91.4% of the country’s GDP and rise to 16.9 trillion baht, a staggering amount. The surge in finance costs has also worsened the situation, which has affected borrowers’ debt-paying abilities, citing that many borrowers will end up relying on loan sharks and other informal routes instead.
Data from the Bank of Thailand also suggests that the total outstanding balance of household debt during Q3 2023 was 16.2 trillion baht, a rise of 3.4% yoy and accounting for 90.9% of Thailand’s GDP.
🥤 Bitesize Take: Everywhere we turn, whether it’s the news or companies’ quarterly reports, all say the same thing: Thailand’s overall economic health is poor, and we are becoming pessimistic about growth potential. There have been multiple warning signs regarding rising household debt, with the government launching debt clinics and relief programs last year aimed at helping people in need. Still, this is all part of a much larger problem at hand; economic recovery is slow, and there are no near-term solutions in sight.
Global Bites 🌎: Universal Music Group removes songs from TIkTok
A lack of compensation for its artists, including Taylor Swift and Drake, has been cited as the reason for Universal Music Group's decision to remove all of its content from TikTok, effective earlier this week. According to reports, the decision can be reversed only if TikTok can reach a new agreement with the record label.
It’s not friendly banter, either. TikTok responded with a scathing reply, accusing Universal of putting “their own greed above the interests of artists and songwriters.”
UMG said TikTok only accounts for 1% of its advertising revenue — despite its artists representing 8 out of 10 of the most popular bands and singers on the platform last year.
🥤 Bitesize Take: Constant and rapid evolvements across the modern music ecosystem, as well as social media platforms, will continue to make these negotiations challenging in an era where engagement is driven not only by paid advertisers but user-generated content that leverages these popular songs for virality, the question of who owns what will continue to dominate the conversation. The fact that UMG decided to walk away from a platform with billions of users across the globe makes their stance clear.
Bitesize Tidbits: What Else Happened This Week? Some headlines worth mentioning quickly to wrap up the week.
• On Wednesday, the Constitutional Court ruled against Move Forward Party in its lese majeste case, cautioning the political party to halt all campaigns relating to Monarchy reform. Although no further punishment was issued, analysts foresee that this could later be leveraged to dissolve the party or ban its leaders from politics. Party leader Pita Limcharoenrat is back at work this week following the court’s ruling in his favor on media share ownership.
• Tourist arrivals in Thailand are off to a strong start in 2024, with the country welcoming a total of 2.7 million visitors in January alone. The surge in arrivals contributed to over 132.6 billion baht in spending. Visitors from China, Malaysia, and South Korea led the pack.
• Antler, an early-stage investment fund, has committed $5.1 million to 37 very early-stage startups across Southeast Asia, with sectors spanning AI, healthcare, and fintech. The company said it expects to see more “durable businesses” in vertical AI – aka AI solutions that is designed around a specific industry.
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Grab Captured Over 55% of SEA’s Food Delivery Market
| Some Bitesized insights from a report by Momentum Works | |
We are not surprised about this. Grab does dominate Southeast Asia’s diverse delivery market, and the fact that it captured over half of the region is a testament to its sheer size and stickiness. The report, titled Food Delivery Platforms in Southeast Asia 4.0 (published this month), dives into detail and breaks down each country’s trends and more.
Lineman and ShopeeFood also saw significant growth, with Lineman seeing $1.3 billion in GMV and the latter seeing $1.5 billion, compared to Grab’s $9.4 billion.
Thailand’s total market size for food delivery is US$17.1 billion, with Grab dominating in GMV at 47%, followed by Lineman at 36%, and then Foodpanda at 8%. The takeaway from this report shows that Lineman and ShopeeFood are well-positioned to compete with Grab in Thailand but are still trailing behind.
Interestingly, the report notes that most food delivery markets in Southeast Asia experienced modest, low single-digit growth, except Vietnam, where total GMV grew almost 30% despite cost control from all major players.
What else? Momentum Works concluded that while there are billions of GMVs, the majority of Southeast Asians do not have access to food delivery platforms. There is an overwhelming number of untapped potential, which is what platforms focus on this year in Vietnam. |
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| | | | | A condensed listicle of all you need to know about the weekend ahead | | | What’s happening? Workout community event ‘CURVE LIFE–BALANCE’ on Saturday 3 February, 3-11pm at The PARQ. Under the BLA, BARRE, BAR concept, expect wellness talks & lifestyle markets (BLA), sunset and blacklight rooftop workouts (BARRE), and live DJs and a minibar (BAR). Don’t forget to book a spot in advance!
Love vintage? Check out Antnest Market Grand Opening at The Warehouse in Talat Noi on 3 February from 2pm till late, with special prices on vintage clothes and lotto tickets to try your luck at winning a rare collector’s item.
Why not try… Viennoiserie treats by world famous pastry chef Antonio Bachour for an afternoon tea collaboration with Cafe Madeleine at Four Seasons Hotel Bangkok, with signatures like the Strawberry mascarpone croissant and Camembert cheesecake. Only until 18 February.
Take a look at REVERB by Gadhouse’s ‘Repurpose Collective’, an exclusive launch for Bangkok Design Week at The Corner House. A trio collection marrying analog music with sustainability - transforming recycled milk cartons into a Mathis Reimagined record player, plastic bottle caps into a Modular Sound Crate, and recycled pineapple waste into a Fruitmat Slipmat.
For a lazy, quiet weekend… How do luxury brands stay on top when trends show increased spending from top clients despite the broader luxury market slowdown? Dive into Business of Fashion’s case study on how luxury brands sell to the 1%.
Stop by Pak Klong Talad after sunset to admire the interactive, illuminated installation art ‘I Flower You’, inviting passers-by to decorate the area with flowers and messages, dedicated to someone special or the collective community.
| | | And here’s a curated list of things we like this week, just because. | | Source: XXXYYY Instagram / Own photo / Single Lane Instagram |
✅ ‘Risobooth’ by XXXYYY x Riso.together - not your average photobooth, printing snaps using risograph technique for a fun and customisable memento. At XXXYYY Project Space from 3 February, 10am onwards.
✅ Casual tempura izakaya Obara on Sukhumvit 69 with a Japanese chef delicately frying up each piece to order, is also open for lunch on weekends with a great value tendon lunch set. If you get the chance, try his off-menu onigiri with tempura bits and bonito flakes. ✅ Tucked away in the same alley as Obara is Single Lane Specialty Coffee, a must visit for coffee enthusiasts, especially for filter coffee lovers - a tiny spot with a substantial selection of quality beans!
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See you again next Friday, 8 am. Happy Weekend!
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