Investors in the local e-commerce market are struggling to find their footing, trying to differentiate value propositions and realising the segment requires a large amount of capital.
The recent move by SK Planet under SK Telecom to sell its 100% share in 11street Thailand to businessman Chalermchai Mahagitsiri confirmed this, after 11street logged nearly three years of operations in Thailand.
In April, TSpace, under TCC Group, controlled by tycoon Charoen Sirivadhanabhakdi, bought a 51% share in Tarad.com. Tarad.com spent almost two years finding new strategic investors after Japan's Rakuten sold its 51% share in 2016. Weloveshopping and WeMall under Ascend Group also opted to team up with True Corp.
On July 15, Lazada offered a commission-free campaign to attract online merchants, battling it out with newcomer JD Central and its Singaporean rival, Shopee, which offers free shipping to consumers and free commission to merchants.
"While e-commerce competition is intense, there is strong growth potential because e-commerce penetration in Thailand is still very low," said Mr Chalermchai, chief executive and president of Thoresen Thai Agencies Plc.
He told the Bangkok Post that his business group is figuring out how to carve out its own niche in the growing segment.
"Today Chinese e-commerce companies are increasingly dominating the space, but we are still confident in creating unique offerings that will allow us to be a significant e-commerce player," Mr Chalermchai said. "We won't engage in head-to-head competition with Chinese e-commerce players, but we will play to our strengths."
His company is in the process of executing a new strategy that will be disclosed soon.
"We will have a fresh e-commerce concept, and we believe Thais will be excited," Mr Chalermchai said.
11street today is among the top three e-commerce players in Thailand.
"We will continue to leverage our presence, and if rebranding will help boost our position, we will pursue that path," Mr Chalermchai said.
He is also interested in setting up a venture capital arm to invest in emerging and deep technology, since in his view the disruptive tech businesses will change the way businesses operate.
"Business today is transforming digitally, and we hope to be a part of the change, if not lead it," he said.
Jarit Sidhu, head of operations at IDC Thailand, a tech research firm, said the e-marketplace business is dominated by Lazada, Shopee and 11street in terms of visitor numbers.
All those players suffered losses while spending big on marketing and subsidised products to attract users and online merchants.
According to Business Online, Lazada Thailand registered a 515-million-baht loss in 2013 and a 2.1-billion-baht loss in 2015. In March 2016, the company reported a 568-million-baht loss.
Shopee Thailand had a 211-million-baht loss in 2015 and a 528-million-baht loss in 2016. 11street posted a 184-million-baht loss in 2016 and a 943-million-baht loss in 2017.
"This is a regional game, and this business is hard to differentiate in terms of value proposition," Mr Jarit said.
The local e-commerce market has not matured, but it might see lower growth than China's because the retail business here has good coverage and players have adapted to cope with online channels.
"It's hard to predict how long it will take the e-commerce market to mature, as it's quite new, similar to the ride-hailing industry, where dynamic changes have seen players there expand via 'platformisation' to connect with partners," Mr Jarit said.