11street beckons Thais into e-tail field

11street beckons Thais into e-tail field

Chinese running riot, South Korea firm says

Mobile commerce is making a huge contribution to the overall e-commerce market.
Mobile commerce is making a huge contribution to the overall e-commerce market.

Thai conglomerates need to invest in the online retail platform before the market is totally dominated by Chinese players in five years, says South Korea's 11street Thailand.

"Now is the right time for conglomerates and big corporations like Charoen Pokphand and King Power to invest in the e-commerce platform before it's too late," Jeon Hong-cheol, chief executive of 11street Thailand, said on the sidelines of the E-commerce Big Bang seminar hosted by the Commerce Ministry. "If they wait until the e-commerce market is mature, the investment cost will become too expensive and it will be too late to compete, as the market will be dominated by Chinese players."

Mr Jeon said the opportunity to invest in a platform will last until 2022, while top players' platforms are estimated to generate US$1 billion (32.96 billion baht) each in gross merchandise value.

11street aims to be one of the leaders by that time, but the company needs to form a strategic partnership.

"We want to grow together with our partner and hopefully be No.1 in four years," Mr Jeon said.

A ramp-up in competition is projected by year-end or early 2019, he said, adding that the company will make a big move at that time.

11street has positioned itself as a seller of genuine products from qualified sellers, offering a good, reliable customer experience.

The company plans to add Milan Direct, a new section of imported luxury brands from Italy at competitive prices.

The new section is already available in South Korea, but the company has not set a timeline for the Thai market.

Mr Jeon said Thailand's e-commerce business-to-consumer market is forecast to remain the second largest in Southeast Asia, with 12.6% compound average growth, reaching $94.2 million in 2021, up from $60 million in 2017, thanks to the proliferation of social media and mobile internet usage.

To date, 11street in Thailand has 1.5 million products listed on its site.

SK Planet, a subsidiary of SK Telecom, which owns 11street.com, last year exited its operations in Indonesia because of intense competition. The company still has operations in Thailand, Malaysia and Turkey.

Key players flex muscle

Agatha Soh, head of regional marketing at Shopee, a Singapore-based consumer-to-consumer marketplace under Sea Group, said Southeast Asia, particularly Thailand, is a high-potential market for online retail.

"We designed the platform with ease of use [in mind] and localised it to attract users," Ms Soh said. "We have also conducted sessions to educate sellers."

In Southeast Asia, mobile commerce accounts for a large share of the overall e-commerce market. In 2016, mobile commerce made up 54% of total e-commerce in the region.

Shopee has 5,000 employees, over 125 million downloads, gross merchandise value of $4.1 billion and 6 million sellers.

Ms Soh said Shopee has no plans to charge a sales commission or shipping charge in Thailand.

But in Taiwan, where the market is more developed, Shopee brings in revenue through paid advertising and a credit card commission charged to merchants.

Alibaba, through Lazada, is moving to offer Thailand's first lending service on an e-commerce platform.

The service, through collaboration with Siam Commercial Bank, leverages artificial intelligence technology powered by SCB Abacus to enable instant credit approval on the Lazada platform. Sellers can apply for online loans without additional paperwork.

JD Central for its part kicked off a soft launch earlier this week at jd.co.th by introducing a flash sale, discount coupons and guaranteed delivery. The site will officially launch in August.

Jason Lee, managing director of eBay Southeast Asia, said cross-border trade is growing online. In 2017, 7,500 new Thai sellers joined the eBay platform.

"As a global platform, eBay enables Thai sellers and individuals to reach 170 million buyers in 190 countries," Mr Lee said.

By 2020, cross-border transactions globally are projected to reach $1 trillion, he said.

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