Covid-19 accelerates online shopping growth over 30%, while lots of SMEs will die by five years.
Pawoot Pongvitayapanu, e-commerce expert and talad.com Founder said the Covid-19 has changed Thai consumer behavior, especially the baby-boomer group. The new user base and increasing service uses boosted the market growth over 30%, compared to typical 15-20% a year. E-commerce will become a new normal.
E-commerce space divided into three groups: website, e-marketplace (Lazada, Shopee, JD Central) , and social media. The growth of e-marketplace will destroy a traditional retail business, seen by the ongoing closure branches of Walmart. With a huge investment of multi-billions baht each year, the giant e-marketplace companies prefer to lose in order to attract customers dominating e-commerce in Thailand, as a result the present companies, like Talad.com and others, must adjust their business models.
The giant players can also acquire businesses to lessen competitors in the market, startups also preferred to be acquired or merged by the giants in order to achieve more valuation, such as Paysbuy, a local payment gateway. Social commerce in Thailand have been occupied by Facebook, Instagram, and Line by which the real-time live selling goods on those platforms have already changed the e-commerce in Thailand. Moreover, travel sector has already been controlled by foreign online travel agencies: Agoda.com, Booking.com, Ctrip and more.
A change and end of community SMEs in Thailand will be happened within three years, faster than it was expected of five years, and general businesses will be mainly occupied by multinational companies within a decade.
Goods producers will be moving toward consumers (Direct to Consumer: D2C) via the large e-marketplace, as a result, dealers have to work harder so that they can provide more variety of products and quality online channel.
As more and more products from China are coming to beat competitors in Thailand via e-marketplaces of China and Singapore, with hundred million items last year compared to 30 million previous year, Thai SMEs must use technology with dedicated team to handle the online channel, seeking for opportunity of Indochina export market including Cambodia, Lao, Myanmar and Vietnam.
The proliferation of e-commerce has also encouraged logistics business with many new players from China competing Thai Post Co., Ltd. The market growth was essentially fostered by Lazada and Kerry’s Cash on delivery policy, digital payment, Promptpay, QR code, and mobile banking.
The coming 5G technology will also take online shopping to the next chapter as there are more Internet of Things (IoTs), consumer behavior analytic will become more sophisticated and precisely predictable, it will present the products to users before buyers send an order. Moreover, there will be voice shopping very soon.
It’s time for the Thai government to build an online ecosystem of Thailand with a national framework.
