aCommerce Paints Bright Future for E-Commerce in Thailand
published : 7 Jul 2021 at 14:53
aCommerce, an e-commerce enabler based in Southeast Asia, was one of the few companies whose business grew during the Covid-19 pandemic as online sales accelerated. The company’s revenues increased by 60% YOY and hit profitability. Following a very successful year, aCommerce now has ambitions to become the largest e-commerce platform powered by automation and artificial intelligence.
These ambitions are justified according to Paul Srivorakul, Group CEO of aCommerce, the country’s e-commerce is continuing to grow at unprecedented rates. Although the industry is still in its infancy, with only 3-4% of total retail going online, the growth in 2020 was phenomenal. Brands and retailers are accelerating their digital transformation, and for many businesses, the share of e-commerce now comprises 25-30% of their total revenues — a significant increase from the 5-8% pre-pandemic. In short, the pandemic has probably brought forward an inevitable shift from offline to online retail and fast-tracked it by at least 5 years or more. This should be good news for the Thai consumer and also the broader economy in the medium term, believes Mr. Srivorakul.
Thailand’s e-commerce landscape will dramatically change as more consumers go online and use their mobile phones for everything from work and entertainment to shopping and socializing. But such rapid growth will bring about new challenges for the companies who want to be successful in the online retail industry. Brands and retailers will want to focus on increasing engagement with their consumers and they will need access to data and consumer touchpoints to facilitate that. aCommerce predicts that the trend will lead to greater integrations between media and commerce and will expand the types of services and products consumed online and the way by which they are consumed. i.e., more opportunities to purchase directly from media, content, or in-game. Direct-to-consumer and social commerce may well become the 2nd largest online retail channel with brands using influencers, celebrities, and ambassadors to help them engage and transact with consumers. This direct-to-consumer trend is also being fuelled by the luxury category, which has been growing due to the shutdown in travel retail such as duty-free shopping at airports. Many luxury brands realize that direct-to-consumer is a valuable channel for them to create a unique customer experience and build brand loyalty. The leading luxury retailers in Thailand, such as Chanel, Estee Lauder, and The Mall Group, (Siam Paragon, Emporium, Emquartier, and Gourmet Market) have partnered with aCommerce to launch and manage their online storefronts.
Brands and retailers will apply the marketplace business model to their retail strategies. Conglomerates and large companies from various industries are launching marketplaces for specific sectors. In Thailand for example, there is nocnoc.com, a marketplace for home and furnishing, which is, similar to Zalora for fashion, getting good traction and now a channel aCommerce integrates with. The industry is likely to see more local marketplaces for categories such as luxury, beauty, healthcare, home and living, and niche categories such as auto parts, pet supplies, etc.
As consumers spend more time online, companies have to follow and adapt their marketing, distribution, and retailing strategies. The lines between online and offline are blurring and successful retailers will provide an omnichannel experience for consumers to engage and buy their products from anywhere, online or offline, with multiple options: pick up in-store, ship-from-store, or deliver to home. Similar to what we see in China, Thai consumers will engage and shop from brands across several new platforms such as TikTok, Facebook, LINE, Google, Grab, and even Netflix. Consumers will adapt to these new retail formats, and in the near future, new channels such as chat commerce, live streaming, video commerce, social selling, and group buying will become mainstream.
aCommerce also predicts that personalization will be a prominent trend for brands allowing consumers to customize their products and services catering to the ‘TikTok generation’ or the creative-minded consumers. Imagine consumers or influencers being able to personalize the design, color, or adding name personalization for their favorite brands and products. This will require some advanced manufacturing and supply-chain on the backend and intuitively designed user interface and tools on the front-end. The direct-to-consumer model enables brand manufacturers to forecast demand, better understand their consumers, produce less waste, and get higher margins for their products. This consumer-to-manufacturing (C2M) and personalization trend were driven by e-commerce in China and it will be adopted by local manufacturers and designers in S.E. Asia.
Another notable trend is how new brands are taking advantage of Mega Sales days, a unique online trend in Asia where marketplaces and retailers offer big discounts during certain days, such as 11.11 and 12.12. This trend has now expanded to a monthly event where 2.2 and 3.3 to 9.9, and 10.10 are becoming important campaigns for consumers and brands.
BrandIQ by aCommerce shows the growth of Mega Sales in the region since the pandemic, for more info, visit BrandIQ.asia
For brands and retailers who are soon starting their business and looking to sell online, aCommerce recommends starting sooner rather than later as it takes time to hire the right people and manage their internal processes and workflows to support online retailing. “It is true e-commerce can reach a wider audience, drive much higher volumes of sales cost-effectively and give data insights, but to do it correctly is more complicated and requires several departments to be all in sync”, says Paul Srivorakul. “An easier alternative is to partner with an e-commerce enabler who can help them accelerate their go-to-market strategy. For example, our company assists brands and retailers in their e-commerce transformation. With EcommerceIQ and BrandIQ, we provide companies with enterprise-grade software-as-a-service (SaaS) solutions integrated with their own infrastructure and services that open new digital revenue models such as omnichannel, direct-to-consumer, social commerce, and marketplace selling. We are the first player in the space and that has given us a first-mover advantage and the ability to grow our technology platform and quality of services - which we believe is beneficial to the entire e-commerce system and Thai consumer”.