Call for policies to curb cheap online goods

Call for policies to curb cheap online goods

Thai sellers want measures in place

E-commerce and retail pioneers have urged the government to impose strict measures to handle the flood of cheap and low-quality products available on online platforms that have affected local small and medium-sized enterprises (SMEs).

They also want the government to collect corporate tax on Chinese sellers of those products on the platforms.

According to the General Administration of Customs of China, China's cross-border e-commerce has become a new engine of the country's foreign trade development, with its volume doubling from 1 trillion yuan in 2018 to 2.11 trillion yuan (US$306 billion) in 2022.

Thanawat Malabuppha, honorary president and advisor to the Thai e-Commerce Association, said the Commerce Ministry should take a serious consideration over the influx of Chinese products sold on the online platforms, particularly amid the rise of TikTik Shop.

Indonesia has banned e-commerce transactions on social media platforms, which was seen as affecting the short-video app TikTok, which is focusing on Southeast Asia's biggest economy.

Mr Thanawat expects Temu, an online marketplace based in Boston, Massachusetts, and operated by the Ireland-based Chinese e-commerce company PDD Holdings, to come to Thailand after launching in the Philippines and Malaysia.

He added that the presence of the new marketplace in Thailand could lead to more discounted products in the country. While this might be good for consumers, policymakers should consider whether Thailand should open up to such a level.

He also suggests Thailand should have "an e-commerce licence" for related digital platforms such as Facebook, YouTube and Instagram, similar to the National Broadcasting and Telecommunications Commission (NBTC) licensing regime.

Mr Thanawat said giant e-marketplaces like Shopee and Lazada have tools to gain insights into which products will have strong sales in Thailand and in the region.

Thailand has not given priority to unfair competition and anti-dumping practices, in particular when the giant platforms use marketing subsidisation for discount coupons on the platforms, he added.

Chatchai Tuongratanaphan, vice-president of the Thailand Retailers Association, said he believed that the way foreign goods enter Thailand has changed completely as the vast majority of goods no longer need to rely on Thai intermediaries. Goods from foreign factories can be brought directly to Thai consumers.

"Thailand is a country with free trade, and Thailand has signed free-trade agreements with various countries and trade groups to prevent trade discrimination. Therefore, we cannot issue regulations prohibiting any country from selling goods on online platforms," he said.

The Thai e-Commerce Association suggests an e-commerce licence for related digital platforms.

Mr Chatchai said that the goods that can be sold must meet the requirements, which are determined by government laws and product listing policies. This reduces the chances that consumers will buy illegal goods or low-quality goods.

However, if they pass through various online platforms that are not registered in Thailand, the problems that are of concern are the issues of quantity and price cutting, as well as the quality of goods in terms of safety, illegal goods, counterfeit goods, and others that directly impact the rights of consumers.

In addition, various online platforms that are not properly registered in Thailand also sell illegal goods, including health and pharmaceutical products that are normally not allowed to be sold on online platforms. This makes consumers unsafe and unprotected.

Mr Chatchai suggests that the makers of foreign goods sold on online market platforms or their importers must be required to be properly registered in Thailand, so they will enter the tax collection system comprehensively. This is to protect the interests of Thai merchants, especially SMEs, as well as to protect the interests of the country. A 15-30% online sales tax will be collected at the point of sale on the platform. The platform owner will be responsible for collecting and submitting it to the Revenue Department.

The challenge of government agencies responsible for supervising the e-commerce is to enforce policies and measures on all platforms on an equal basis to benefit all buyers, said Mr Chatchai.

The Electronic Transactions Development Agency (ETDA) issued a royal decree on the operation of digital platform services in 2022 to regulate offshore and onshore digital platform services providers and protect consumer interests.

A source in the e-commerce sector who requested anonymity said that Tik Tok has notified ETDA of its business activities.

However, it is noted that Tik Tok Shop's e-commerce operations are conducted from abroad under the status of a 100% foreign-owned company. TikTok does not hold an electronic commerce business licence from the Department of Business Development and has not registered as a direct marketing business with the Office of the Consumer Protection Board.

The source added that there are social media platforms managed from abroad that operate digital platform services in Thailand. These companies should adhere to Thai laws and regulations to ensure equality in business operations among enterprises within the same industry and other industries operating in Thailand.

Chanida Klyphun, head of public policy for TikTok Thailand, said the company plans to register TikTokShop Co in Thailand.

"Next year will be the regulatory year that we will comply with local authorities," said Ms Chanida.

"Our sellers have citizen ID, bank savings or corporate registration in order to sell via our platform," said Ms Chanida.

"We will take down illegal products when we get notification."

TikTok, in collaboration with the Community Development Department, has already promoted 532 One Tambon One Product (Otop) entrepreneurs on its platform in the first phase, to which they provide digital skills along with advertising credits and promotional marketing programmes, empowering them to expand into greater business opportunities and address the challenges of rapidly changing consumer trends.

The initiative has generated over 8.5 million baht in income opportunities, from 380 out of 532 Otops. This first phase of a 3-year partnership follows the signing of a memorandum of understanding in August.

Choocheap Pongchai, deputy director-general of the Community Development Department at the Ministry of Interior, said that this year the Otop market is expected to see growth of 26% and reach 300 billion baht.

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