Thailand’s digital and ecommerce landscape could experience 20x growth over the next ten years as the online ecosystem becomes available to the majority of shoppers.
With social channels and new means of communication, methods of targeting consumers and a more holistic understanding of shoppers in a digital age, ecommerce is becoming a true staple in driving business growth in the country.
The integration of social channels in all platforms has also increased. Facebook has become a viable platform for buying and selling among online Thai shoppers, with 44 million active users in the country and reaching 7% yearly growth. Instagram is another important platform that has almost 10 million users in Thailand.
Meanwhile, the tech industry’s most talked about mobile app, Snapchat (that recently filed its IPO), remains a less popular social platform in the country. The app, however, is testing social commerce functions to potentially strengthen its positioning in the market.
Priceza: Predicting 20x growth in the next ten years
According to Tanawat Mahabupha, co-founder of Priceza, Thai consumers are not necessarily seeking out the cheapest deals. The quality of products and credibility of brands are becoming integral to the decision making process.
“This year, Thailand will have a strengthened infrastructure. Both payment and logistics will become crucial drivers of progress. It can be said that if e-payment takes off, so will ecommerce.”
The shopping behavior of Thais is a mix between going onto marketplaces to browse and/or shopping directly from brand.com. This is especially the case for more premium products, such as cosmetics.
Currently, Southeast Asia is experiencing the most rapid growth in ecommerce and Thailand has the highest gross merchandise value (GMV) in its group. This means that retailers and brands need to be quick in adopting digital strategies. Aside from competing over the speed of launching a product, brands also need to act swiftly in logistics and customer service. The importance of a speedy delivery service is crucial to the success of an ecommerce strategy.
Lnw Shop: Great consolidated ecosystem by sellers
Nuttawit Polwattanakul, CEO of Lnw plc, or Lnw Shop says that this year, social commerce will experience even more robust growth. A lot of brands will be turning to channels that do not require them to pay a fee, such as Instagram or Facebook.
According to Nattawit, e-payment may take approximately 3-4 years to fully take off and calm the fears of consumers. It’s important to ensure that marketplaces accommodate the incoming new comers in payment in order to accommodate the country’s diversifying payments landscape.
The government is currently pushing initiatives for SMEs, educating the market about different marketing channels and how to use them. Most recently, the Thai government announced an official partnership with ecommerce giant Alibaba to boost growth for small and medium sized players. SMEs are also recommended to integrate Facebook Live into online strategies.
Aside from the development of payment, logistics and marketing, more sellers will want to join forces to target consumers. It is a challenge to construct and operate a website, which is why Thais prefer to join forces and provide customers with collaborative platform, especially in the area of logistics and last mile.
Ascend Group: Promotions are not enough
Thananan Arunrukchai from Ascend Group has pointed out that for e-payment to take off, it must be a no hassle, one step process, otherwise, the complications will drive consumers to resume shopping via chat apps and bank transfers.
He also notes that it’s vital for brands to understand what their customers want and identify the appropriate marketplaces. This is more important than dishing out promotions in the long run. Some brands often overlook the importance of a customer experience, and instead focus on giving away promotions without much brand engagement.
COL Plc: It’s not easy to go online
According to Worawut Oonjai, chief executive of COL Plc., ecommerce only makes up 2-3% of total retail, hence the growth potential. According to him, it is not easy to go online. Brands should use marketplaces as a platform to test the waters and diversify their online presence.
Brands should widen their marketplace selection in order to collect enough data and the know-how to launch a brand.com.
However, if a brand truly wishes to pursue a brand.com strategy, they need to be strong enough; factors such as funding and a niche market would be necessary for a successful direct-to-consumer strategy.
TNS, global market research company, reports that Thai people have the highest use of social media platforms – 92% of users on a daily basis. Bain & Co also released findings that the Thailand online market is estimated to make up 15% of total retail by 2024.
For companies realizing the importance of ecommerce, are they too late to the game? Not really. Convenience store chain MaxValu recently announced that they are in the middle of executing an online strategy after witnessing a rise in online demand from when they sold new year gift baskets via online distributors. For companies with large offline footprints and strong customer base, they actually have an advantage.
So there we have it, the thoughts of some of Thailand’s ecommerce influencers. The country is undeniably undergoing fast internet adoption and with the increasing popularity of social commerce and marketplaces, brands are under pressure to seize the ten year growth potential. It’s important to use marketplace visibility to tread into ecommerce and as a stepping stone to a brand.com strategy, but brands should be wary of following the herd and without fully establishing a footprint in the ecosystem first.