E-commerce predicted to capture 10% of Thai retail segment
published : 7 Sep 2018 at 08:07
newspaper section: Business
writer: Suchit Leesa-nguansuk
The highly competitive e-commerce market in Thailand is expected to drive growth in online retail, representing a 10% share of the overall retail market in five years from only 3% today, say leading players.
Big names such as JD Central, a joint venture between Thailand's Central Group and Chinese internet giant JD.com, are set to launch in the month ahead.
The e-commerce platform plans to work in tandem with Tencent Thailand and Pomelo, companies where JD.com is a shareholder.
Jirasak Chirathivat, head of customer strategy for JD Central, said higher competition in Thailand's e-commerce market will boost the retail business eventually.
Moreover, big data and artificial intelligence will enable the "personalised shopping experience" and efficiently integrate online and offline trends. Voice command online shopping through smart speakers will also play a role, said Mr Jirasak.
"Price is not the only factor for consumers, experience and express delivery are also key motivations," he said.
JD Central's site, www.jd.co.th, plans to launch officially next month after the soft launch in June.
"We are in the process of investing in a second logistics centre that serves countrywide delivery. We aim to achieve the standards seen in China, where JD.com delivers before 11am in the morning when users place their orders before 11pm the night before," said Mr Jirasak.
At this stage, JD Central is focused on offering more products online, with plans for 1 million items in the future, up from around 10,000 items.
JD.co.th has two revenue sources -- selling their own products and gaining margins for e-retailing and an e-marketplace that caters to other online merchants, from which JD.com earns revenue from commission fee.
While other e-markets waive commissions, JD Central focuses on helping merchants make successful sales.
Cross-selling for products found on Central's online fashion site, Looksi will also be available soon, he said.
The company plans to align the Thailand marketing strategy with Tencent, as JD.com is a shareholder of China's Tencent.
However, he said the company will focus on online channels before moving to integrate offline products and over 10 Central Group units such as Central, Robinson, SuperSports to sell in its platform.
He expects online revenue will be major revenue to Central in the future.
David Jou, chief executive of Pomelo, a Thai online fashion e-commerce site, said e-commerce will shift to integrate more transactions online, from where players will be able expand their physical presence.
Recently, Pomelo expanded its own retail shops with two branches in Bangkok and plans to have 10 shops this year, with a branch due to open in Singapore next year.
Mr Jou said e-commerce in Thailand still has room to grow, as it represents only 3-5% of total retail market compared with 30-35% in China and 15% in India.
Arisa Thavee, head of e-commerce operations at cosmetics website Konvy, said consumer behaviour is mixed.
Some shop online and pick up selected products in-store, while others opt to go in-store to try products before ordering online.
Fourth quarter peak season
Kawin Prachanukul, co-founder and country head of Singapore-based ShopBack Thailand, predicts a strong market in the final quarter this year thanks to several marketing campaigns from big online e-marketplaces, such as Sept 9 (9:9), Nov 11 (11:11), Nov 23 (Black Friday), Cyber Monday on Nov 16, and Online Fever Dec 12 (12:12).
ShopBack offers cash back for consumers under the ShopFest campaign that will run until Jan 3, 2019 for online purchases from 1,500 retailers overseas, of which 150 retailers are in Thailand.
Mr Kawin said the rebate e-commerce website has gained 600,000 customers since starting operations last year with aims to have 3 million users this year.
He said fourth-quarter sales are normally brisk. Last year sales through the channel rose five times above average, and this year the increase is expected to range 6-10 times.
- e-commerce market
- online fashion