Central eyes e-commerce top spot
The group's head of retail aims to beat Alibaba, Lazada and Shopee at their own game, writes Pitsinee Jitpleecheep
published : 17 Jan 2019 at 04:00
newspaper section: Business
writer: Pitsinee Jitpleecheep
Central Retail Corporation is ready for the e-commerce race, aiming to double its online sales to 10 billion baht this year.
Nicolo Galante, chief executive of Central Group's retail business, said the company is investing billions of baht in technology, teams and new services in order to take the lead in the e-commerce business by 2021.
"Non-food businesses globally have been disrupted by digital transformation and are struggling against the likes of Amazon and Alibaba," he said. "As the biggest non-food player in Thailand, Central Retail pledges to move aggressively this year to tap into digital transformation. We can be for Thailand what Amazon is in Western countries and Alibaba is in China. Everywhere in the world, the No.1 player in e-commerce and digital is always a new-economy company, but in Thailand it could be a company that is 71 years old."
In the US, Amazon is 3-4 times bigger than the second e-commerce player. In China, Alibaba is three times bigger than its closest competitor.
Mr Galante wants to be No.1 in omni-channel e-commerce business, topping Shopee.
To achieve its goal, Central will launch an omni-channel platform of services that differs from those operated by Lazada, Alibaba and Shopee.
Under the new platform, the company will offer products and services both at the store and online. It also invites brands that are present in each business unit's stores to join its marketplace so that they can have a direct relationship with the customers through the marketplace.
If the brand doesn't have the skills to build their presence in the marketplace, Central will help do it for them through the company's experts.
"We will launch our omni-channel marketplaces for our retail business," Mr Galante said. "If there are some problems with the products, the customer can return the products to the store, get advice and other services at the store."
The company expects to be able to launch the first omni-channel marketplaces for Central Department Store, PowerBuy and SuperSports in the first half of the year.
Moreover, customers who buy products online will be allowed to pick up their products on the same day from stores.
Mr Galante said the company is going to launch "Reserve and Collect", a service that allows potential buyers to reserve two or more sizes or colours of the products online for them to try, choose and pay for the product they like the most at the store. This will help encourage customers to shop for apparel online, as many customers remain uneasy about paying online buying online products that may not fit.
"These will be some of the new things we offer our customers in 2019 and hope to double our online sales this year," Mr Galante said.
He said 2018 was a good year for Central Retail e-commerce, hitting 5 billion baht in sales.
"We were positively surprised about the sales," he said. "We achieved our target on what we hoped for both sales and profit amid a lot of transformation. 2019 is the first year of the real race to become No.1 in Thailand's e-commerce in 2021."
Customers can buy online at PowerBuy, SuperSports, CDS, Robinson, Looksi, MEB and Office Mate, and from the Digital Personal Shopper service using Line and Chat & Shop with a digital assistant.
Thailand's e-commerce market is estimated at 150 billion baht this year, 20-25% higher than in 2018. Central Retail said its online business grew by an average of 80% last year, with sales of some units such as Central Department Store and PowerBuy posting double growth and those of SuperSports and Robinson reaping triple growth.
According to Mr Galante, online business for food and housing materials is relatively small in Thailand, and in most countries around the world, because people buy multiple products together for their grocery shopping or for their house projects. It then becomes much more complicated for logistics.
"But I am convinced that what we are doing for Tops online and for Thai Watsadu online is going to be a killer model for the industry," he said. "No one else will be able to offer these services. It takes a little bit more time, but we expect the growth of Tops and Thai Watsadu online to see the same growth as PowerBuy and SuperSports, Central and Robinson in the future."
Mr Galante said Thais still don't buy food online because they don't think they will get fresh, quality products.
With food as one of the biggest market opportunities, the company has built a new unique model to offer the best online grocery service to Thai customers. The model will enable keeping the products at the right temperature until they reach the customer's door.
"If it is frozen, it stays frozen, if it is fish, it stays cold and not frozen," Mr Galante said. "Through the new model, we can offer perfect fresh quality, even better than a normal supermarket."
Apart from new services, another key issue for Mr Galante is people. There were only 150 people working on e-commerce and big data at Central when he arrived in Thailand three years ago. Today the number has risen to 550 people working exclusively on e-commerce and omni-channel, plus 150 working on customer data and customer-relationship management.
By the end of this year, the number of people working in Central's e-commerce unit will reach 1,000, allowing the company to launch better and more efficient services and prepare for future innovation.
"This is the challenge," Mr Galante said. "It's funny because when you talk about retail transformation, a lot of CEOs talk about the various challenges they face with the technology, but the challenges for me are all about the people, the new experts that we need to attract and our current staff of thousands that we need to train and empower to use new technology. It's challenging but very exciting."