face strong competition among European silk producers and Indian and Chinese imports. The UK is the main destination of Thai silk fabric because it is the more open market for foreign products, however, Thai silk still hold small share in the UK market (4% of total imports fabric in 2009). Italy and France have imported very few Thai silk fabric and final products. They claimed that this is mainly because Thai silk is very expensive compared with the others (this is also true in the UK), and Thai silk characteristics are not compatible to industrial processing in Europe (raw Thai silk is golden or yellowish and the fibre is shorter than the one usually used in European industry). There are also other reasons such as poor business relationships with the EU operators, low level of communications and marketing, poor packaging, etc. which are important for exports as well. Furthermore, France and Italy are the main silk processors of Europe and have very high competitiveness inside their market already. Thai silk is perceived as a different and high quality product. European operators and consumers think that it has its own characteristics and can be easily differentiated from ones from other origins. However, Thai silk is very expensive in comparison to other competitors, thus, Thai silk products are not price competitiveness in the commodity market since this market is quite price sensitive in a harsh economic situation. Consequently, Thai silk is not available much in the EU market and there is low awareness and knowledge of Thai silk by both European operators and consumers. Currently there is no chance for mass or mainstream products since China, India, Vietnam and Brazil are in better position for (lower) price, supply availability and business networks. Therefore, Thailand has two main alternatives to enhance competitiveness in the market: •
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To reduce the cost, then price to compete in the commodity market – it should be noted that silk production is labour intensive and the labour cost of Thailand is much higher than in China, India or Vietnam, therefore, it is difficult to reduce the cost. Considering technological development, it will take time and high investment to develop technology to produce a high volume of raw silk according to European industry requirements. In addition, this may result in disappearance of Thai traditional silk and the consequent loss of national culture and the opportunity to differentiate Thai silk from others.