Thailand’s duty-free powerhouse King Power has announced a sweeping restructuring plan as it seeks to diversify its business and accelerate expansion into China.
The decision comes at a crucial time, with the company awaiting the finalisation of a new airport duty-free contract with Airports of Thailand (AOT) while adjusting to major shifts in consumer behaviour and the global tourism industry.
To stabilise operations, King Power will shutter three of its downtown duty-free branches, King Power Srivaree, King Power Mahanakhon, and King Power Pattaya, on 16 September.
The company said the closures are necessary to “stop the bleeding” as part of a broader strategy to cut costs and streamline operations.
In addition to store closures, King Power is reducing its workforce and restructuring departments while pursuing new opportunities in China. CEO Nitinai Sirismatthakarn told Thansettakij that the overhaul is essential to adapt to the evolving tourism environment.
As the company awaits AOT’s decision, expected in October, it has requested that the state agency revise its payment model. King Power argues that a fairer benefits structure is vital for survival in the post-pandemic marketplace.
Nitinai described the current minimum guarantee system as a “big wound” for the airport duty-free business. He added that reducing the minimum guarantee would provide clarity and allow the company to recover.
The restructuring also involves a sharper focus on airport duty-free operations and e-commerce expansion into China, which King Power categorises as “resume” businesses with strong potential for rebound.
In contrast, downtown duty-free outlets are now labelled “reset” businesses due to fierce competition from online shopping and a collapse in group tourism, particularly from China.
King Power is working on a new business model to repurpose the three vacated sites, potentially adopting a hybrid format that blends retail with new activities and brand offerings. The company still operates three downtown branches, King Power Rangnam, King Power One Bangkok, and King Power Phuket.
As part of its overhaul, the company is also restructuring its workforce of 8,000 employees. A voluntary resignation programme has been introduced, offering compensation above legal requirements and factoring in years of service.
Staff performance will be taken into account, with the programme ending in late September.
China Expansion
King Power views China as the key to its next phase of growth. With its huge consumer base and strong purchasing power, the company is targeting younger Chinese travellers who value practicality over traditional luxury.
The shift away from tour groups towards independent travel, driven by travellers from cities such as Beijing and Shanghai using digital tools like Google Maps, has eroded revenue at downtown duty-free stores.
To capture this market, King Power has set up Shanghai King Power Commerce Co., Ltd. and launched two new brands at Shanghai Pudong International Airport: TAI HAI TAO, offering Thai snacks and ready-to-eat meals, and SOMBAT THAI, an authentic Thai dining concept.
The company is also strengthening its e-commerce presence by partnering with Chinese influencers and KOLs to connect directly with consumers.
Looking ahead, King Power is eyeing a bid for duty-free concessions at Shanghai Pudong’s new Terminal 3, scheduled to open in 2028. Success there could pave the way for further expansion into other airports in China and beyond.
