From farm to tablet: Building a new business to solve an old challenge

On this page: Introduction | The opportunity | How it was done | The impact

There are more than 350,000 restaurants, cafes, and hotels across Thailand, each requiring a constant supply of fresh and staple grocery items to keep their businesses running. Many of them shop at Makro, a well-known Thai wholesaler, to meet that demand.

The global pandemic has highlighted the essential role these wholesale suppliers play in society—and the opportunity they have, to accelerate their own digital transformations, build new e-commerce capabilities, and better serve customers.

When leaders at CP AXTRA Public Company Limited decided to make a digital transformation, they partnered with McKinsey to identify the right strategy, lead with technology, and ensure their transformation would endure.

Makro was only capturing 10 percent of buyers’ share of wallet. Their customers typically went to other suppliers, from smaller vegetable producers to wet markets, to fulfill their commercial needs. “That adds a lot of operational overhead for them, causing a lack of efficiency in running their businesses,” says Tirayu Songvetkasem, chief digital officer of CP AXTRA.

The advent of the pandemic accelerated these challenges and helped create momentum to solve for this customer need.

Transforming Thailand’s food retail with Siam Makro

“Makro comes from a very classic business background,” says Paul Howe, group chief information officer of CP AXTRA . “We knew there was disruption happening and we needed help to understand how to get disruption to flow through our business using new ways of working.”

Leap by McKinsey experts partnered with CP AXTRA to build a new digital platform where business owners could access a real-time view of wholesale inventory from hundreds of suppliers in a single app. Known as Makro PRO, the platform offers streamlined goods-purchasing for hotels, restaurants, and cafes.

“Building Makro PRO from scratch was a new experience for us. For the platform to be successful, we needed a very solid and future-ready technology stack and architecture,” says Yanawee Sarotnunjeen, a product owner at Makro PRO. “We worked with McKinsey to help us accelerate the technology build and make it secure and highly scalable. McKinsey brought in expert digital talent, including product builders and strategists, software engineers, data scientists and designers—and embedded them within our team. Today the technology that supports Makro PRO has been embedded into other parts of our organization.”

After the initial build, CP AXTRA knew it had to build its own tech talent bench to sustain and scale the platform. “We worked with McKinsey to hire and build tech capabilities systematically across different roles and seniority levels,” says Yanawee. “In six months, we grew the Makro PRO team from 0 to 60 people.”

Over the project, McKinsey helped CP AXTRA to embed upskilling and professional development into the fabric of the organization’s culture, building capabilities of more than 200 colleagues who are dedicated to Makro PRO, and updating compensation and benefits for the company.

As Dymfke Kuijpers, a McKinsey senior partner who leads our retail work globally and our consumer work in Asia explains: “As impact partners, helping our clients upskill and hire talent is quintessential to their ability to sustain growth themselves. In the end, tech is never the bottleneck—a lack of people and capabilities are.”

“We were true partners across each and every part of the business build, working as one team,” says Tomas Laboutka, a McKinsey expert associate partner. “This kind of collaboration made it easy to share ideas, test and iterate quickly, and ultimately create a trust-based relationship that was critical as we worked remotely most of the time.”

Over the last two years, CP AXTRA has reskilled more than 200 employees to support its omni-channel business and Makro PRO platform, which now processes thousands of orders daily with tens of thousands of products available on the platform. Elsewhere, CP AXTRA expands the opportunity for sellers like small farmers to reach customers.

Transforming Thailand’s food retail with Siam Makro

“This impact is a result of a shared vision and excitement that we have with CP AXTRA for building a new business that can benefit many local businesses–the heartbeat of the Thai economy,” Tomas says.

As Noppamas Sivakriskul, a McKinsey senior partner and the managing partner of our Thailand office, says: “This is a brand I’ve grown up with and loved. I’ve had the chance to partner with its leadership team for nearly a decade. This is an idea that we’ve been exploring for a few years. To finally see it come to life has been so rewarding.”