Harrison White
In an exclusive interview for CIR’s Leader Talks, Mr. Martin Darby, who oversees the operations of EFG Holdings, shared insights into the company’s recent decision to expand its Swensen’s brand in Laos. EFG Holdings, headquartered in Bangkok – Thailand, has cemented itself as a significant player in the Southeast Asian food and beverage market, with operations in Cambodia, Myanmar, and Laos. The company’s strategic expansion in Laos, marked by the opening of its sixth Swensen’s outlet in Vientiane, exemplifies its confidence in the long-term potential of the Lao market, even as the country faces economic challenges.
The new Swensen’s outlet is strategically located in Parkson Mall, Vientiane’s busiest shopping center. This location was not chosen by chance; EFG already operates other successful brands within the mall, including The Pizza Company, Dairy Queen, and Boost. According to Darby, the decision to expand Swensen’s at this location was driven by a unique opportunity to acquire the last remaining ground-floor unit in the mall, further solidifying the brand’s presence in the Lao capital. “Swensen’s has always been a favorite among Lao families and young couples,” Darby explained. “With the return of tourists to Laos, we see significant growth potential for this iconic brand, making it an opportune time for us to expand our footprint.”
Navigating Economic Challenges with Strategic Partnerships
Laos, like many countries, is navigating through a complex economic landscape. The Asian Development Outlook (ADO) April 2024 report forecasts that the Lao economy will grow by 4.0% in both 2024 and 2025. However, this growth is accompanied by substantial inflation, projected at 20.0% in 2024 and 7.0% in 2025. These economic pressures, along with currency depreciation and high public debt, have exacerbated food insecurity, particularly in rural areas where food inflation averaged 39.5% in 2023.
Read More: EFG Commits To Open 20 Boost Juice Stores In Cambodia Within Five Years
Despite these challenges, EFG Holdings remains optimistic about the long-term opportunities in Laos. The company has strategically positioned itself by partnering with key infrastructure projects, such as the Laos China Railway. This partnership has allowed EFG to introduce Dairy Queen and Boost kiosks at important train station locations in Vientiane and Luang Prabang. “The return of tourism, coupled with investments in highways and the development of Thatluang Lake City, presents significant growth opportunities for our brands,” Darby noted. “We see these developments as essential components of our long-term strategy in Laos.”
Operating in Laos does come with its set of challenges, particularly when compared to other markets like Cambodia, Vietnam, and Thailand. Large currency fluctuations and cost inflation are ongoing concerns, but Darby emphasizes that these are often short-term issues. “While these challenges are real, we believe that the strategic advantages of operating in Laos far outweigh these concerns,” he said. EFG’s longstanding presence in Laos, as the largest and longest-established food and beverage operator in the country, provides it with a significant edge. The company benefits from economies of scale and shared support services within the RMA Group, which has extensive operations in Laos.
To adapt to the current economic conditions, EFG has implemented several strategies aimed at maintaining operational efficiency. One key aspect of this strategy is the company’s focus on cost management. By keeping costs tight, EFG ensures that it remains competitive, even in challenging economic environments. The company has also leveraged its partnerships with local entities, such as the Lao Development Bank (LDB), to invest in technology solutions. These include integrated LDB payment platforms and the development of EFG’s e-commerce delivery platform, HungryApp. “Being a long-term strategic investor, we actively seek to build strong partnerships with local companies, which is crucial to our success in the Lao market,” Darby explained.
Aligning with Local Market Dynamics for Continued Success
EFG’s approach to brand strategy in Laos involves closely aligning its marketing efforts with those of neighboring Thailand. This alignment is particularly evident in the case of Swensen’s, where the company has adopted a marketing calendar similar to that used in Thailand. One of the recent promotions, Thai Tea Sundaes, has been well-received in Laos, where many Vientiane residents frequently travel across the border to Nong Khai. “Aligning our products and offers with Thailand makes both consumer and business sense, given the cross-border dynamics,” Darby remarked. This strategy has not only resonated with local consumers but also ensured that EFG’s offerings remain relevant and competitive in the Lao market.
As EFG continues to expand its presence in Laos, Darby offered valuable advice for other companies considering similar moves into the market. “Always focus on the long-term strategic outlook, which for Laos is positive in my view,” he advised. Darby also highlighted the importance of forming strong local partnerships and understanding the diverse tastes and preferences across different regions of Laos. “Partnering with local shareholders and companies is key, as is keeping costs tight. It’s important to remember that Laos is geographically large and diverse, with varying taste profiles and logistical challenges. Embrace the local culture, enjoy the warm hospitality of the Lao people, and appreciate the beauty of their stunning countryside.”
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EFG Holdings’ expansion in Laos underscores the company’s strategic vision and its commitment to long-term growth in Southeast Asia. Despite the economic challenges that Laos currently faces, EFG remains focused on leveraging the opportunities presented by infrastructure developments and the return of tourism, positioning itself as a leading player in the country’s evolving food and beverage industry.
