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Transnational Retail in Southeast Asia: Transformation and Regulation in the National Retail Markets of Malaysia and Thailand

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Transnational Retail in Southeast Asia: Transformation and Regulation in the National Retail Markets of Malaysia and Thailand TRANSNATIONAL RETAIL IN SOUTHEAST ASIA: TRANSFORMATION AND REGULATION IN THE NATIONAL RETAIL MARKETS OF MALAYSIA AND THAILAND A thesis submitted to the University of Manchester for the degree of Doctor of Philosophy in the Faculty of Humanities 2016 ALEXANDRA BUCKLAND-WRIGHT SCHOOL OF ENVIRONMENT, EDUCATION AND DEVELOPMENT 2 CONTENTS LIST OF TABLES 5 LIST OF FIGURES 7 LIST OF ABBREVIATIONS 8 ABSTRACT 11 DECLARATION 12 COPYRIGHT STATEMENT 13 DEDICATION 14 ACKNOWLEDGEMENTS 15 CHAPTER ONE INTRODUCTION: TRANSNATIONAL RETAIL IN SOUTHEAST ASIA 16 1.1 The rise of retail globalisation in Southeast Asia 16 1.2 The evolution of national retail markets 20 1.3 Thesis outline 24 CHAPTER TWO: VARIEGATED NATIONAL ECONOMIC SYSTEMS 29 2.1 Introduction 29 2.2 Conceptualising institutions, economic actors, markets and regulation 30 2.2.1 Institutions, actors and institutional change 31 2.2.2 Conceptualising markets 35 2.2.3 Formal regulation in markets 38 2.3 National varieties of capitalisms 41 2.4 East and Southeast Asian varieties of capitalisms 50 2.5 Variegated Capitalisms 60 2.6 Summary 67 CHAPTER THREE: RETAIL GLOBALISATION AND THE TRANSFORMATION OF 69 NATIONAL RETAIL MARKETS 3.1 Introduction 69 3.2 The globalisation of retailing 70 3.3 The retail transnational corporation in context 75 3.4 The host economy impacts of transnational retailers 85 3.5 Conceptualising the regulation of national retail markets 93 3.6 Synthesis: conceptualising the transformation of national retail markets 97 3 CHAPTER FOUR: UNDERTAKING COMPARATIVE CASE STUDY RESEARCH TO 104 INVESTIGATE NATIONAL RETAIL MARKETS IN SOUTHEAST ASIA 4.1 Introduction 104 4.2 Research philosophy in economic geography 104 4.3 Research design: an explanatory, cross-national comparative case study 110 4.4 Undertaking multi-method research 116 4.5 Considering analysis, data verification and coding interview data 125 4.6 Interviewing elites, the role of researcher positionality and ethical practice 128 4.7 Summary 132 CHAPTER FIVE: MALAYSIA AND THAILAND’S NATIONAL RETAIL MARKETS 134 PRIOR TO RETAIL TNC INVESTMENT 5.1 Introduction 134 5.2 Institutional and political-economic conditions in Malaysia and Thailand 137 5.2.1 Malaysia’s institutional and political-economic landscape 140 5.2.2 Thailand’s institutional and political-economic landscape 146 5.3 The evolution of Malaysia and Thailand’s national retail markets prior to 151 2000 5.3.1 The rise of domestic modern retailing in Malaysia and Thailand 152 5.3.2 State involvement in Malaysia and Thailand’s national retail markets 158 5.4 Summary 163 CHAPTER SIX: MALAYSIA’S NATIONAL RETAIL MARKET: COMPETITION AND 164 STATE SUPPORTED TRANSFORMATION 6.1 Introduction 164 6.2 Transnational retail in Malaysia 167 6.3 The response to market change: regulating the national retail market 174 6.4 Market outcomes of regulation and inter-firm competition 180 6.5 Regulatory negotiation over hypermarket expansion 187 6.6 ‘Building a more dynamic market’: government led transformation 194 6.7 Summary 203 CHAPTER SEVEN: THAILAND’S NATIONAL RETAIL MARKET: DIVERSITY DRIVEN 205 COMPETITION 7.1 Introduction 205 7.2 The modernisation of Thailand’s national retail market 207 4 7.3 Fair competition and regulatory compromise 213 7.3.1 Market disjuncture and the political and bureaucratic mediation of 214 market change 7.3.2 Regulations applied to Thailand’s national retail market 222 7.4 Market outcomes of regulation and inter-firm competition 227 7.5 Negotiating market regulation at a provincial scale 236 7.6 Market progression through private enterprise post 2010 242 7.7 Summary 246 CHAPTER EIGHT CONCLUSION: TRANSFORMATION AND REGULATION IN 249 MALAYSIA AND THAILAND’S NATIONAL RETAIL MARKETS 8.1 Introduction 249 8.2 Contrasting national retail market transformation 250 8.3 Conceptualising national retail market transformation 263 8.4 Methodological implications and recommendations for future research 269 8.5 Conclusion 273 REFERENCES 274 APPENDIX 1: LIST OF INTERVIEWEES 298 WORD COUNT: 82,797 5 LIST OF TABLES 1.1 Leading Southeast Asian national retail markets, 2015, ranked by 17 market size 2.1 Analytical frameworks of East and Southeast Asian varieties of 52 capitalisms 2.2 Asian varieties of capitalism and national modes of economic 53 governance 2.3 Political, economic, and institutional features of Southeast Asian nation 59 states 2.4 Frameworks analysing national and variegated forms of capitalism 62 3.1 Leading transnational retailers by international sales in 2002 72 3.2 Phases of expansion in retail internationalisation 1960 to mid-2010s 74 3.3 The composition and structure of firm networks 76 3.4 Areas of embeddedness in retail transnational corporations 78 3.5 Regulatory measures designed to constrain transnational retail 95 induced concentration in national retail markets 3.6 Inter-firm and extra-firm network actors present in national retail 102 markets 4.1 The firms, institutions and organisations represented by research 120 participants 5.1 Distribution of retail TNC investment into Southeast Asia from 1980 to 136 2005 5.2 Features of Malaysia and Thailand’s national economic systems 139 5.3 Key developments in Malaysia and Thailand’s national retail markets 153 between 1960 and 2000 6.1 Food and general merchandise retail TNC entries into Malaysia since 168 1980 6.2 Regulatory measures implemented to constrain retail FDI and enhance 178 domestic industry growth in Malaysia’s national retail market 6.3 Distribution of grocery retail formats by ownership in Malaysia in 2015 182 6 6.4 Market share growth and ranking for leading grocery retailers in 183 Malaysia 6.5 In-store environment, services, and product innovations initiated by 186 domestic and transnational retailers since 2002 6.6 MDTCC initiatives designed to promote domestic products and 196 suppliers 6.7 The thirteen entry point projects under the wholesale and retail NKEA 198 7.1 Food and general merchandise retail TNC entries into Thailand since 209 1980 7.2 Regulatory measures implemented to constrain retail FDI and create 224 fair competition in Thailand’s national retail market 7.3 Legislative progression of the Retail or Wholesale Business Operations 225 Act 7.4 Distribution of grocery retail formats by ownership in Thailand in 2015 231 7.5 Market share growth and ranking for leading grocery retailers in 232 Thailand 8.1 The impacts of transnational retail investment in Malaysia and Thailand 252 8.2 Features of Malaysia and Thailand’s national retail markets after 257 regulatory intervention during the early 2000s 8.3 Strategies employed by retail TNCs to resolve regulatory challenges 260 8.4 Institutional and political-economic features of Malaysia and Thailand’s 266 national retail markets 7 LIST OF FIGURES 1.1 Traditional and modern retail in Thailand 16 3.1 Dimensions of transnational retail firm territorial embeddedness 81 3.2 Host economy impacts of transnational retail corporations 89 3.3 The transformation of host economy national retail markets following 99 investment by large-format transnational retailers 4.1 Coding structure for the comparative analysis of interview data 126 6.1 Phases of transformation in Malaysia’s national retail market following 165 investment by large-format transnational retailers 6.2 National retail market value in Malaysia from 2001 to 2015 171 6.3 Market share of modern to traditional grocery store-based retail in 173 Malaysia between 2000 and 2014 7.1 Phases of transformation in Thailand’s national retail market following 206 investment by large-format transnational retailers 7.2 National retail market value in Thailand between 2001 and 2015 208 7.3 Market share of modern to traditional grocery store-based retail in 212 Thailand between 2000 and 2014 8.1 The transformation of host economy national retail markets following 251 investment by large-format transnational retailers 8 LIST OF ABBREVIATIONS AFC Asian Financial Crisis AEC ASEAN Economic Community ASEAN Association of Southeast Asian Nations Bhd. Berhad (public company) BN Barisan Nasional BOI Board Of Investment BPA Bumiputera Participation Unit CEO Chief Executive Officer CME Coordinated Market Economy COO Chief Operational Officer CRDC Co-operative Regional Distribution Centre CSR Corporate Social Responsibility DC Distribution Centre DFI Dairy Farm International DITP Department of Internal Trade Promotion DTC Distributive Trade Committee DTCRA Development of Thai Capital Retailers Association EPP Entry Point Project ETP Economic Transformation Programme FBA Foreign Business Act FDI Foreign Direct Investment FFV Fresh Fruit and Vegetable FSCE Formally State-Controlled Economy GAP Good Agricultural Practice GDP Gross Domestic Product GNI Gross National Income GPN Global Production Network GLC Government Linked Company HKTDC Hong Kong Trade Development Council 9 HoReCa Hotel, Restaurant and Catering IMF International Monetary Fund IMO Interior Ministry Ordinances IT Information Technology JPPCC Joint Public-Private Consultative Committee KL Kuala Lumpur KLCC Kuala Lumpur City Centre KLIA Kuala Lumpur International Airport KOJARIS Koperasi Jaringan Sepadu Malaysia Berhad (Co-operative Integrated Network Malaysia) LME Liberal Market Economy MCA Malaysian Chinese Association MCSC Malaysia Co-operative Societies Commission MDTCA Ministry of Domestic Trade and Consumer Affairs MDTCC Ministry of Domestic Trade Co-operatives and Consumerism MIC Malaysian Indian Congress MOC Ministry Of Commerce MOAC Ministry Of Agriculture And Co-operatives MOU Memorandum Of Understanding MRA Malaysian
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