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News Release

Udon Thani Tipped as a Retail Hotspot in the Northeast of Thailand

​​Increased supply of retail centres in provincial areas allows more opportunities for retailers to expand outside Bangkok

Many provincial modern retail markets have seen strong growth, thanks to a growing population with rising household income. Among them is Udon Thani which has emerged as one of the fastest growing retail markets in Thailand’s north-eastern region. With many retail developments mushrooming, successful retailers of leading international and local brands in Bangkok now have more options to expand to Udon Thani.

Siwanart Srisomsup, Associate Director of Retail Consultancy and Leasing at JLL, says “Among the 20 north-eastern provinces, Nakhon Ratchasima, Udon Thani and Khon Kaen have been identified as the region’s largest shopping mall markets. Out of the three, the spotlight is currently on Udon Thani where the shopping mall sector has recently become exceptionally active as many leading international and local retail operators and retailers are establishing their presence in the city.”

Strong demand fundamentals

Asides from a growing population with rising household income, the rapid growth of Udon Thani’s retail market has also been driven by tourism.

Though the province has no border connecting to a neighbouring country, it serves as a major hub for tourists visiting Laos via Nong Khai, one of the country’s most crowded ports of departure and embankments. As Nong Khai has no airport, many Thais and foreigners visiting Laos fly from Bangkok to Udon Thani and, after which, travel to Nong Khai through road for 50 minutes. Before leaving for Nong Khai or returning to Bangkok, many of these tourists spend one to two more days visiting Udon Thani’s bustling downtown area and/or visiting cultural and natural attractions that the province has to offer.

With an abundance of retail and entertainment facilities, Udon Thani also enjoys a considerable number of tourists from Laos who spend an estimated THB 5,000-10,000 per person per visit, mostly on shopping. 

Growing retail supply allows for more opportunities for retailers to expand

To capitalise on the strong potential of Udon Thani as a major retail market with a relatively wide consumer base, many leading retail operators have established their presence in the city. While the entry of discount, cash and carry, and specialty stores such as Tesco Lotus, Big C, Makro, HomePro, Global House and Index Living Mall has become a norm, aggressive expansions of the city’s two most prominent shopping centres—CentralPlaza Udon Thani and UD Town—have contributed to significant change in the province’s retail landscape.

CentralPlaza Udon Thani and UD Tower are located in the city centre within close proximity to each other, thus competing for similar retailers and customers. Both shopping centres have successfully attracted many leading international and local retail brands. With a good retail mix and efficient marketing campaigns, the two centres also attract approximately 20,000 shoppers a day.

While CentralPlaza Udon Thani doubled in size with the completion of its second phase in 2012, the operator of UD Town has recently announced a plan to revamp its 13,000-square metre mall this year and develop a new project named UD Decentia. The new 21,000-square metres lifestyle mall will be connected to UD Town by a skywalk. The developer expects their two projects to attract 30,000 shoppers a day after completion of UD Decentia in 2017.

The additional space from UD Decentia will provide new opportunities for retailers of both leading local and international brands to expand outside Bangkok. On the adverse side, it will also result in stronger competition in Udon Thani’s shopping centre market. 

“Retail operators will compete harder to attract new retailers and retain existing ones. They will also have to work harder to ensure a sufficient flow of shoppers to support their retailers within the centres,” says Siwanart. “Having said all that, we believe a growing number and affluence of shoppers in Udon Thani will ensure adequate demand to support the growing retail supply in the city,” he adds.

A bigger picture

Prospects for the retail sector in the northeast of Thailand have appeared positive. Apart from having the largest population in the country, the Northeast also benefits from its connectivity with Laos, boasting cross-border trade and tourism. All these indicators will encourage more retail developments in other north-eastern provinces, succeeding the current three largest markets -- Nakhon Ratchasima, Khon Kaen and Udon Thani.

However, Siwanart warns that opportunities usually come with risks. 

“Fundamentals in the provincial shopping mall sector can be quite different from those in Bangkok, whether they be household income levels, transportation infrastructure, people’s lifestyle, local cultures, etc. They can also vary from province to province within the same region. To minimise risk and ensure success, retail centre developers and operators as well as retailers must understand these fundamentals that will determine the groups of customers they should target and the retail mix they should offer,” Siwanart says.