Competition squeezes out Ookbee Mall
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Ookbee Mall Thailand will close its eCommerce business Ookbeemall.com next month, citing heavy competition.
Launched in November 2015 with an initial investment of 150 million baht (US$4.2 million), Ookbee Mall is a JV between Japanese eCommerce investor Transcosmos and Thai e-book store Ookbee.
Founder Natavudh Pungcharoenpong says the mall was launched as an experiment to see if the low customer-acquisition cost of digital business could convert to physical business. “It turns out it cannot.”
He says eCommerce needs to be on a large scale, and global players use subsidised promotion strategies to acquire customers, which Ookbee cannot afford to do. “Our capital can be better used in other areas, mostly digital products.”
Pungcharoenpong says the closing of the eCommerce business will not hurt Ookbee’s digital business (e-book store). “Many people in Bangkok panicked and called us to cancel their digital subscription, as they confuse eCommerce with our core business. Our core business is e-books, and will remain intact.”
Ookbee Mall was established as a one-stop portal for books and magazines, beauty and cosmetics, and products sourced directly from Japan. Last month, Ookbee partnered with Chinese internet giant Tencent to build a user-generated digital content company, Ookbee U.
Questions & Answers
Q.Why is Ookbee Mall closing its eCommerce business?
Why is Ookbee Mall closing its eCommerce business?
Ookbee Mall is closing due to heavy competition in the eCommerce sector. The founder stated that global players use subsidised promotion strategies to acquire customers, which Ookbee Mall cannot afford to match given its capital limitations.
Q.What was the initial investment made to launch Ookbee Mall?
What was the initial investment made to launch Ookbee Mall?
Ookbee Mall was launched with an initial investment of 150 million baht, which is equivalent to US$4.2 million. This funding was a joint venture between Transcosmos and Ookbee.
Q.Will Ookbee's core e-book business be affected by the closure of Ookbee Mall?
Will Ookbee's core e-book business be affected by the closure of Ookbee Mall?
No, Ookbee's core e-book business will not be affected. The founder clarified that the eCommerce business is separate from their main digital product offerings, which will remain intact.
Q.What types of products did Ookbee Mall offer to customers?
What types of products did Ookbee Mall offer to customers?
Ookbee Mall was established as a one-stop portal offering a variety of products. These included books and magazines, beauty and cosmetics items, and products directly sourced from Japan.