Thai shopping An e-commerce boom in the making
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Thailand could be in for an online shopping boom. The country’s telecommunications infrastructure, payment settlement systems and logistics have long been somewhat underdeveloped. For years, the situation has discouraged mall operators and shoppers from jumping into e-commerce.
Toshiya Matsuo, chief executive of Ookbee Mall (Thailand), center, announces the launch of Ookbee Mall, an online shopping site, in Bangkok in October 2015.
Toshiya Matsuo, chief executive of Ookbee Mall (Thailand), center, announces the launch of Ookbee Mall, an online shopping site, in Bangkok in October 2015.
Now that market is finally starting to grow. Tokyo-based transcosmos, an e-commerce solutions provider, in October collaborated with Ookbee, a Thai e-book store operator, to create the Ookbee Mall website. Toshiya Matsuo, chief executive of Ookbee Mall (Thailand), is excited about the company’s better-than-expected sales. “Japanese cosmetics and fruit that are difficult to get here are selling particularly well,” he said.
Ookbee Mall sells some 90,000 items and hopes to have 1 million customers by 2018. Matsuo said the company aims to set itself apart with a unique lineup of Japanese items, thereby sidestepping fierce competition in the Thai e-commerce space.
Slow to take off
In 2009, Rakuten, Japan’s big e-tail platform, bought TARAD Dot com, one of Thailand’s oldest online marketplace operators. The acquisition encouraged Thai communications conglomerate True Corp. and other parties to also get into online retailing in Thailand.Lazada of Germany landed in the country in 2012, and China’s Alibaba Group Holding came in 2014.
“Japanese cosmetics and fruit that are difficult to get here are selling particularly well,”
START TODAY, the Japan-based operator of apparel retail website Zozotown, is a new contestant for Thailand’s Web shoppers. It recently formed a capital tie-up with Thai online clothing specialist WearYouWant Holdings.
The market, however, has been slow to take off. Blame that on Thailand’s creaky mobile infrastructure and lack of reliable settlement services.
To get things moving, Lazada at the end of last year established its own distribution centers.
Watch your e-wallets
In January, Deutsche Post DHL Group created a division to deal with domestic deliveries of online purchases at its Thai unit. The carrier has also built a distribution center in Bangkok. It plans to double the number of its Thailand delivery depos to more than 40 by 2017. The network offers next-day deliveries in Bangkok and surrounding areas. Elsewhere, it shoots for completing deliveries within three days.
Another spur to online shopping is faster wireless communications. Political turmoil had halted the bidding process for fourth-generation mobile spectrum, but at the end of last year several auctions were held. A Thai mobile operator began offering 4G service in January.
As Thailand’s cyberspace catches up with the times, online retailers are pouring money into new services. With 4G, sellers will be able to pitch their products with high-resolution video. DHL cited 4G as a key factor behind its e-commerce business in Thailand.
According to Euromonitor International, a British market researcher, Thailand’s online retail market is expected to reach $3.21 billion by 2020, a 123% increase over 2015.
As the market grows, Thais will have to guard their e-wallets from a wealth of online options.
Questions & Answers
Q.What issues previously hindered the growth of online shopping in Thailand?
What issues previously hindered the growth of online shopping in Thailand?
The country's telecommunications infrastructure, payment settlement systems, and logistics were underdeveloped. This discouraged both mall operators and shoppers from fully engaging with e-commerce.
Q.Which major international companies have entered the Thai online retail market?
Which major international companies have entered the Thai online retail market?
Rakuten, Japan's big e-tail platform, bought TARAD Dot com in 2009. Lazada of Germany arrived in 2012, and China’s Alibaba Group Holding came in 2014, with START TODAY also entering recently.
Q.How are logistics and infrastructure improving to support e-commerce in Thailand?
How are logistics and infrastructure improving to support e-commerce in Thailand?
Lazada established its own distribution centres last year, and Deutsche Post DHL Group created a division for domestic deliveries. DHL plans to double its Thailand delivery depots to over 40 by 2017, and 4G mobile service began in January.