Small Petroleum Retailers Increase Share in Thai Market.

Nov. 6--Large petrol retailers are struggling to regain market share from smaller rivals that now claim about 33 percent of the market, up from 8 percent a decade ago.

Four operators -- the corporatised Petroleum Authority of Thailand, now PTT Plc, Shell, Esso and Caltex -- dominated the market until 1992 when the trade was opened to new competitors.

The market share of the Big Four fell to 89 percent in 1993. Last year, their share was 67 percent with the rest taken by 29 local and foreign retail operators, according to the Commercial Registration Department of the Commerce Ministry.

The loss of market share by the large concerns is attributed mainly to much stiffer competition in the past four years, according to an analysis of the National Energy Policy Office (Nepo). The demand for crude fell sharply during the recession but the number of operators remained unchanged.

Under the circumstances, service station operators have no choice but to try all marketing strategies to stay in the game. In particular, new operators led by Jet and Q8, both foreign-owned, have built their businesses through keen pricing, service station decoration and facilities, as well as promotions.

Pricing seems to be the most popular strategy for the battle given the high volatility of oil prices. In the past two years, Pak Tai, MP Petroleum and TPI have adopted this approach to build their market shares.

Nepo says in a report that Thailand is among the top five countries for fierce competition in oil retailing. Any service station chain could increase its financial returns by 50 percent if it undercut all its competitors by just 50 satang per litre.