Facebook friends spread the word

A car accessories firm has slashed its advertising budget and increased revenue by relying solely on the social networking site.

With increasing competition in the car accessories market, Decha Wattanasupong decided to shift his marketing focus to social media two-and-a-half years ago.

Back then, he never imagined that his company's Facebook page, with 94,100 likes as of last month, would become his sole advertising tool.

Like many other small and medium-sized enterprises (SMEs), the 40-year-old marketing director of Imperial Concept, which supplies car lighting, faced a problem of low returns from advertising due to tight competition.

Since the company was set up nine years ago when the lighting accessories market was still in its early stages in Thailand, Mr Decha has spent 2-3 million baht in advertising per year.

Magazine ads accounted for about 100,000 baht a month, while ads on various websites also had to be paid for.

Mr Decha also attended automotive exhibitions twice per year, each costing 800,000 to 900,000 baht.

In April, Mr Decha stopped advertising that way and instead used a budget of 100,000 baht to focus completely on Facebook ads and campaigns. This includes content promotion in the news feeds of fan pages and their friends.

In just 10 days, sales reached 2 million baht, roughly the same result as attending an exhibition for 10 days but with much less expense.

"Roughly, there are around 22 million Facebook accounts in Thailand. Let's say 17 million if you take away duplicate accounts. Out of that, 10 million are our customers," said Mr Decha.

His customers are mostly males aged 25-40, but female clients have surged to 30% from only 10% of the total before social media advertising was launched.

With lighting products from Taiwan, Japan and South Korea, drivers can easily change the look of their car from Japanese to European by using one of the company's services.

Mr Decha expects the company's marketing budget will be lowered to 500,000 baht for the second half of this year, solely through Facebook ads.

Revenue from this year is expected to rise by 30% annually, up from average growth of 20%.

Imperial Concept is among 780 companies taking part in the Enhancing SMEs' Competitiveness Through IT (ECIT) project organised by the Department of Industrial Promotion (DIP) this year.

Pronounced with a "z" so that it sounds like "easy IT", ECIT aims to equip entrepreneurs with IT knowledge to enhance their competitiveness, lower costs and boost income.

Under the Industry Ministry, the DIP this year chose 1,500 people to join the programme.

For fiscal 2013 starting in October 2012, the project had a profit value of 138 million baht, said DIP deputy director-general Kobchai Sungsitthisawas. The figure is expected to reach 200 million baht by the end of the fiscal year.

Mr Kobchai said the budget for the project in 2014 was approved by parliament last week but slashed from 35 million to 30 million baht.

An ideal figure should be 200-300 million baht for 10,000 to 20,000 businesses to take part, he said.

For 2014, the DIP expects 900 businesses to participate in the project, with a profit value of at least 200 million baht.

While Mr Decha does not see himself ever going back to his traditional marketing tools, he advises other SMEs to look at what they are accustomed to, saying social networks might not be the answer for everyone.

"Next year, no one might be using Facebook, but we already have a customer database of our own, and that is a valuable asset," he said.

Mr Decha is also looking to expand his products to seats and other accessories with the help of a friend who operates as an original equipment manufacturer.

In the long term, he would like his Facebook page to be a channel for buying and selling all types of accessories from various vendors.

"It will be like a motor exhibition on Facebook, with me as the organiser," he said.

About the author

Writer: Nanchanok Wongsamuth
Position: News Reporter