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Published on November 15, 2007

Advance Agro, the paper manufacturer and stationery distributor, became the eighth partner yesterday.

Wanchai Phlaphongphanich, CEO of the 13-year-old franchisee of entertainment rental shops from Japan, said the whole VCD/DVD rental market had suffered the economic blues as many consumers turned to buying pirated copies.

Many independent movie rental stores had been forced out of business, he added. Renting VCD/DVDs was not enough to attract modern consumers. Tsutaya had to adjust by turning into a "lifestyle entertainment" provider and constantly introducing new offerings.

Its partners include those in digital technology, entertainment and stationery.

The franchiser in Japan had applied a similar concept for years with a wide range of items and services besides VCD/DVDs. Some stores there cover more than 35,000 square metres.

Tsutaya (Thailand) market research found local consumers expected many new offerings to be available in the stores and stationery was among the most wanted categories.

Advance Agro will start by supplying eight Tsutaya branches and expand to 30 stores by year-end and up to 150 units next year. The products stocked in each branch would be arranged according to local needs.

After all of Advance Agro's products are sold in each branch, the new category should generate Bt5 million of revenue in each branch, Wanchai said.

The strategy kicked off last October with TrueMoney Express payment counters at Tsutaya stores.

The ninth partner, a technology-related business, should be brought on board late this year. It would become Tsutaya's second major revenue source after VCD/DVDs. Tsutaya will also change its slogan by that time, but Wanchai declined to elaborate.

After all nine offerings are fully available next year, Tsutaya would do much better than the flat growth of this year, he said. The company's revenue during the past 10 months slid 10 per cent, in tandem with the whole market, but he still expects business to pick up during the rest of this year.

Nitida Asawanipont

 The Nation