Online IT sales on pace to make up 40% of market

Online IT sales on pace to make up 40% of market

"Only major local-hero dealers are likely to survive." -- Chukkrit Watcharasaksilp, Chief sales and marketing officer, Advice IT Infinite

Driven by the pandemic, IT product sales through the online channel are likely to account for 35-40% of this year's IT market, a rate that hadn't been anticipated until 2022, says Advice IT Infinite, an IT retail chain.

The growth of online sales is "faster than expected", said Chukkrit Watcharasaksilp, chief sales and marketing officer of Advice.

But online sales can't entirely replace physical stores, he said, as IT products such as computer notebooks are expensive and compel customers to touch and physically experience the items.

"Advice's online channel is ready, and the ratio of online revenue climbed from 12% in 2019 to 18% in the first six months of this year," Mr Chukkrit said.

He said the coronavirus crisis took a toll on cash-poor small and medium-sized IT dealers, many of which had to close down. The turn of events was to the benefit of major IT retail players, which gained market share in the first half of the year.

"Advice grew by double digits in sales," Mr Chukkrit said.

The growth was mainly from the online channel, with demand for all-in-one computer desktops and notebooks rising as people worked from home and learned online during the pandemic.

Advice is also developing showroom shops of 400-500 square metres in major cities that could serve as "experience" IT stores.

According to Mr Chukkrit, small and medium-sized shops are under pressure from big stores that can provide a wide variety of products and space for customers to experience IT offerings.

"Only major local-hero dealers are likely to survive," he said.

The company expects demand for IT products in the second half to decline amid the sagging economy, particularly upcountry.

IT retail sales in the second half are forecast to fall 20% year-on-year, Mr Chukkrit said.

More importantly, a notebook shortage is imminent because the supply chain of components has yet to fully recover, particularly for CPUs.

Advice must find more revenue by expanding after-sale services for IT product repair and explore new customers such as big companies and educational institutions, Mr Chukkrit said.

The company is diversifying its customer groups into corporate customers and building brand awareness among youngsters via social media app TikTok to offset the shortfall of revenue from the wholesale business.

Advice aims to list on the stock market in mid-2021 to raise money to build more new stores and expand its IT e-marketplace platform. The listing is deferred from the previously scheduled IPO this November.

Advice aims for 20 billion baht in revenue by mid-2022, one year after the IPO. The company booked 12 billion baht in revenue in 2019.


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