One of Thailand’s most famous and oldest stationery stores, Somjai, first opened in Bangkok’s bustling old town, almost 60 years ago. Eight additional branches have followed across Thailand since its gain in popularity.
Somjai is often synonymous with high school kids as it caters to Thailand’s youthful demographic – it’s common to see a group of girls and boys in uniform hunched over trays of colored pens at any Somjai store.
Now run by the grandchildren of the original Somjai founders, Wittawin Vidthayanon, his sister Vippawanee Vidthayanon and her partner Noppanaree Puarattana-aroonkorn decided it was time for the reputable stationery chain to have an online presence.
Why? Simply because it was time for growth.
“During my studies in the US, I grew accustomed to using Amazon in my daily life. The added convenience and dependence made me feel that ecommerce was a natural simple progression for Somjai,” said co-founder Vippawanee to eIQ in an interview at a Somjai store.
Most companies today, especially those with a long-standing history and an extensive offline presence, understand that in today’s time and age, multi-channel is what consumers now expect.
So how did this traditional company with no prior online experience begin its digital journey?
Assessing stationery online
Thailand’s current stationery market is primarily dominated by the likes of OfficeMate and B2S, both owned and operated by Central Online, the online subsidiary of Central Group conglomerate in Thailand.
Although OfficeMate claimed 13% market share in 2015, the company leans more to B2B whereas Somjai has long carved out its own niche offline with youngsters and craftsmen, selling assortments of DIY crafts, multi-colored erases and drawing pencils, etc.
Online horizontal marketplaces such as Lazada and Central Online’s B2S also offer art supplies online, but it doesn’t trouble a company that has built a loyal audience over 60 years.
Starting from scratch
Before launching a full ecommerce site, Somjai decided to test demand using Facebook first.
Somjai also began to build its social media presence on Facebook, to target approximately 37 million Thais that are active users of the social networking site.
They realized that people enjoyed browsing for stationery online through messages and inquiries about online shopping on the Facebook page. The page allowed users to simply browse through items from the comforts of their own space, 24/7.
For brands looking to expand their reach in Southeast Asia, it’s almost impossible to do so without social media. Thailand is especially reliant on social platforms like LINE and Facebook, making it unsurprising that approximately 50% of online shoppers end up buying things through these channels.
“Thai people really like to chat,” said Noppanaree, “We’ve found that although we don’t offer the same promotions on LINE@ as the website, some people prefer to buy from the chat platform simply because they’ve gotten to talk to us.”
However, 50% of online orders now still come from Somjai’s Facebook page.
The company’s brand.com was launched four months ago after Somjai’s management hired a full time web developer. By building the platform in-house, Vippawanee had control over the entire process as it was important that the company maintained its traditional and trusted image even online.
Launching and setting up the business online took only six months as Somjai already had an extensive amount of SKUs and familiarity with its core customer.
The company started off by sharing the same in-store inventory for both online and offline orders. Within the first few weeks, store assistants were picking-up and assembling orders from online customers, which caused problems almost instantly, as they also needed to tend to customers shopping in stores.
“We found out quite quickly that this process was not scalable. Our employees were overwhelmed and confused by the new system,” said Noppanaree. “We realized that a separate system had to be built for the company’s online operations.”
Tackling operational challenges
To avoid conflict between online and offline inventory and processes, the team decided to build a separate online inventory system to work at a newly acquired warehouse built to accommodate online order demand.
Tech isn’t something new to the duo. Prior to this, Somjai had a centralized SKU tracker that was able to see what products were available at any of their offline stores.
“We were already planning to upgrade our tech platform,” said Noppanaree. “The goal is to have more automation and less focus on manpower.”
After significant investment, the current system is now able to determine the top performing items at each store, as well as cross check to see which items may need re-stocking for demand forecasting. The new technology platform housed in the new warehouse is able to cater both offline and online operations, as the two have the same products and exists in tandem.
The duo cites 7-Eleven as their inspiration, in terms of operation efficiency.
The platform is able to do real time tracking for online orders that come through, which makes for a straightforward sortation process.
Unsurprisingly, finding talent to manage the tech and run the warehouse was one of the hardest things for the CEOs.
“We currently have a team of ten that solely handles online operations in the warehouse. At Somjai, we recognize if you have the right skill set, it doesn’t have to be ten years but even in a couple of years, you can become a manager,” Noppanaree comments. “Because we’ve never done it before, finding and training talent was hard as it’s still an area still lacking in Thailand.”
Reaching a nation
The investment in both technology and talent paid off. Currently, Somjai is experiencing 5% month on month growth since the launch of its online store, and the team is still unravelling new surprises about their own company.
“Since launching our online channel, the majority of traction has been from Bangkok” said Vippawanee. But we are seeing increased demand from other provinces in Thailand and plan to infiltrate more areas nationwide.”
To reach this new audience, the company decided to partner with Thai Post for last mile.
“Thai Post has specialized knowledge in nationwide delivery making it easier for us when we deliver to homes down south, where some areas lack proper addresses and directions,” said Noppanaree.
To increase brand awareness among customers nationwide, Somjai prioritizes offline marketing over online because majority of potential customers outside Bangkok are unfamiliar with the brand. Driving awareness through offline events and crafts workshops makes people more trusting of the brand.
“Thailand is not like Americans in the US. People don’t trust companies as much so we need to make a physical connection in order for them to trust us,” said Noppanaree.
Despite 70% of Thais choosing cash on delivery as their preferred method of payment, the company doesn’t offer COD and instead only offers bank transfers and credit card as payment options.
“With our younger customers, we haven’t found that to be an obstacle,” said Noppanaree. “Bank transfers makes up approximately 80% of our transactions.”
Perhaps this is a sign of good things to come for payments in Thailand.
What’s next for Somjai?
They won’t be shutting down their offline stores anytime soon.
“It’s impossible to only generate revenue from online sales. We want customers to see our ecommerce platform as another window to buy our products,” said Noppanaree. “We think offline and online should grow together, it doesn’t have to be one or the other.”