Providers consider Thailand's e-commerce market crucial

Providers consider Thailand's e-commerce market crucial

Thailand's high mobile penetration and internet use rates are a key draw for e-commerce and logistics stakeholders. ETDA
Thailand's high mobile penetration and internet use rates are a key draw for e-commerce and logistics stakeholders. ETDA

Thailand is the most important e-commerce market for key overseas players as the retail market keeps evolving, say logistics providers.

Speaking at a panel on the "Retail Business Revolution", Alex Ng, executive director of Kerry Express Thailand, said the parcel delivery segment will grow faster in next 5-10 years.

"Kerry's services will go deeper and wider in the Thai community in the next 5-10 years," he said. Kerry is the first parcel delivery service to introduce QR payment upon delivery.

Kerry delivers 1 million packages a day, up from 20,000 a day in 2006 when it was founded, with double-digit growth every month.

Mr Ng said Kerry strives for success both offline and online, as well as collaborations with partners such as Lazada and Alibaba.

Two months ago, Kerry announced a partnership with BTS Group to reach more urban dwellers by opening 12 drop-off shops in BTS stations, with the first at Phrom Phong station.

The company plans to add new payment and value-added services in the future, he said.

Mr Ng said five years ago, 99% of Kerry's business was from the business-to-business segment, but today 90% of its deliveries are consumer-to-consumer.

"E-commerce has stabilised our business."

James Dong, chief executive of Lazada Thailand, said Thailand is the most important market for Lazada in the region.

Mr Dong, who previously worked for Alibaba in Hangzhou, said online shopping in Thailand has the capacity to grow more.

Thailand is unique in the number of active internet consumers, having a large population that spends on average 10 hours a day on their smartphones, he said.

"This is a friendly environment to grow Lazada," said Mr Dong.

Thailand is key for Alibaba, not only for e-commerce, but also the travel industry, cloud computing, and more, he said.

Alibaba has worked extensively with the government on making the Eastern Economic Corridor as a platform for local and international brands.

"My duty is to bring the new ecosystem to Thailand and open collaboration. We are not competing with offline segments, but provide technology solutions to offline retailers, so consumers have a better experience. At the end, the fundamentals to run a business in Thailand are similar to China, with added digital elements," said Mr Dong.

Yol Phokasub, president of Central Group of Companies, said on Wednesday at the forum that it would be hard to forecast the domestic retail business in the next 3-5 years because of rapid changes in the industry.

"We are already disrupted. The key disrupters are consumer themselves," he said. "Businesses face a 2D situation -- digital or death. If the offline business does not change, it will die."

Therefore, collaboration between players in the industry and also with other businesses such as banking and logistics to better serve customers is the key to the survival of local retail businesses.

Synergy between offline and online businesses is the key to strategy of the Central Group.

"We want to be the central of customer life, that's how Central positioning itself," he said.

Mr Yol elaborated that Central Group will continue to construct malls in both big and small cities.

Central has also partnered with banks to offer secured payment systems to consumers for online services and also worked with suppliers to deliver greater variety of products online.

Thai retailers ranging from shopping centres and restaurants to fashion operators have already adjusted.

"Since the penetration of modern retail businesses in Thailand, we have been concerned that the traditional business model will be destroyed, but both are subsisting side-by-side in the retail market," Mr Yol said.

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