Office warns SMEs of tougher competition
The Office of Trade Competition Commission (OTCC) has sounded the alarm on escalating risks of trade competition, especially for small and medium-sized enterprises (SMEs) reeling from the Covid-19 crisis.
Sakon Varunyuwatana, chairperson of the OTCC, said SMEs are likely to see tougher competition brought about by a changing business environment such as the proliferation of e-platforms and high tech, as well as an increase in mergers and acquisitions (M&As), particularly by big players.
"Traditional businesses that can't adapt to the changing environment will definitely encounter higher trade competition and have their market snatched by online retailers and wholesalers," said Mr Sakon.
"With anticipated M&As, both by cash-rich domestic and international operators to increase their business efficiency, SMEs and micro-SMEs are expected to be less competitive because of low or insufficient trading power. This may eventually result in a market monopoly by big businesses in the future."
He said entrepreneurs at all levels need to adapt to survive in preparation for this changing environment.
"SMEs need to be aware of new skills and imagine how their businesses will change in the future because of such risks," said Mr Sakon.
"They need to analyse the weaknesses in their products or services to find a connection point to address the problems."
He said SMEs should also learn about the laws related to trade competition and unfair trade practices.
"The commission is closely monitoring changes in the overall business structure driven by the pandemic, especially for SMEs, which face a serious lack of liquidity," said Mr Sakon.
Thailand has roughly 3 million SMEs and startups, including community enterprises. Tourism SMEs make up half of the total.
SMEs contributed 36% of GDP in 2018 before dropping to 35% in 2019 and 2020.
He said the commission pledges to continue working to create a fair trade environment and introduce guidelines to supervise the business operations of entrepreneurs to prevent any unfair trade practices.