Ascend set to rise on e-commerce growth
Company aiming to become Asean player
Ascend Group, a subsidiary of CP Group, is embarking on an aggressive acquisition strategy in the digital-related service sector as it seeks to become a regional player by 2017.
The country's leading e-commerce and digital services company has already invested 100 million baht in three venture capital companies in the first four months of this year.
"We are also looking for potential strategic partners to invest in our company [Ascend] to further expand business amid fierce competition," said Punnamas Vichitkulwongsa, chief executive of Ascend Group.
Ascend expects revenue to reach 10 billion baht this year, up from 5.8 billion in 2015, he said.
E-commerce and e-money services accounted for 40% of revenue each, while the remaining 20% stemmed from digital-enabler services such as digital marketing and internet data centres.
"Our annual revenue growth is expected to rise by at least 50% over the next three years," said Mr Punnamas.
Half of Ascend's revenue is projected to come from abroad by 2019, up from an expected 20% this year, which itself would be an increase from 10% in 2015, he said.
Ascend aims to become the first Thai company to build a substantial presence in Southeast Asia, he added.
Southeast Asia is currently a very attractive market for digital services, thanks to its relatively young population -- some 32% of the 680-million-strong population is aged 15-34, compared with 30% in China and 27% in the US.
The region also has a large digital consumer base with average smartphone penetration of 35% despite the fact that 60% of people do not have a bank account or a credit card.
E-commerce accounted for only 3% of total retail sales in Southeast Asia last year, though that figure is expected to increase to 10% by 2020, said Mr Punnamas.
He said Ascend plans to spend 6 billion baht for business expansion this year. Up to 5 billion baht is slated for growth abroad in markets such as Laos, Malaysia and Singapore, on top of its existing presence in Myanmar, Cambodia, Vietnam, Indonesia, and the Philippines.
Another 1 billion baht is reserved for local business expansion.
Ascend has set up Ascend Nano Co to provide nanofinance, microcredit and personal loans. It is scheduled to begin operations by June. Target customers are online retailers from the group's e-commerce business.
Mr Punnamas said Ascend has also set up a venture capital arm, Ascend Capital Co, to invest in Series A and Series B round funding, with a policy to hold 10-30% of shares in each venture.
The company recently established Aden Co, an e-commerce fulfilment service, to capitalise on burgeoning e-commerce opportunities.
Mr Punnamas noted that the e-commerce market is facing big challenges from global players like Alibaba.
"We need a strategic partner with strong financial health to help us expand business further," he said.