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Krungthai Bank (KTB) is launching a venture capital fund worth $65.7 million (THB 2.3 billion) in collaboration with the Stock Exchange of Thailand (SET) and the National Science and Technology Development Agency (NSTDA) to help small and medium-sized enterprises and startups expand their businesses.

The SME Private Equity Trust Fund will be managed by Krungthai Bank and One Asset Management Ltd. Out of the total investment,

  • $57.1 million (THB 2 billion) will come from Krungthai Bank
  • $5.7 million (THB 200 million) from the Stock Exchange
  • $2.8 million (THB 100 million) from NSTDA

It is expected to officially launch in the third quarter of 2016.

The trust fund plans to invest in three groups – high growth startups, technology-based SMEs and large-sized suppliers – that drive the country’s economic growth.  “We would like to make Thai companies healthier and help them to grow and eventually raise funding from the stock market,” says Kesara Manchusree, President of the Stock Exchange of Thailand. She estimated the fund could help around 100 SMEs and boost Thai economy eventually. 

Mr. Songpol Chevapanyaroj, senior vice-president in charge of the global transaction banking group at KTB, said that the venture fund will put in the money as a partner of the SMEs and invest between $572K- $4.3 million (THB 20-150 million) per business. The fund also aims to focus on SMEs that are in a strong position, those with a revenue of $11.4 – $17.2 million (THB 400-600 million) a year.

Apart from the financing, the fund will also provide the chosen companies financial advisory services, investment consultancy, and pre-listing management for those who plan to list on the stock market. In addition, NSTDA will provide other incentives such as tax exemption for research and development-based or technology-based businesses.

A version of this appeared in Deal Street Asia and Bangkok Post on July 25/26. Read the full version here and here.  

UnionBank brings Ureka Forum to Mindanao

source: UrekaForum.ph

UnionBank of the Philippines and its consortium partners are bringing the ecommerce circuit, Ureka Forum, for the first time to Mindanao. Ureka Forum is Philippines’ largest ecommerce conference, aimed to advance local SMEs innovation via ecommerce.

The conference will be held on July 23 following two previous successful conferences held in Baguio City and Iloilo City October 2015 and January 2016, respectively.

“For a long time, Mindanao has been called ‘the land of opportunity,’ and today more than ever, we expect even more investors to focus their attention on Mindanao,” said Genaro Lapez, UnionBank executive vice president and Ureka Forum’s lead convenor.

Started last year, Ureka Forum is open to all “registered SMEs coming from different industries who look at ecommerce as a necessary platform to grow and expand their businesses.

The fast growing Philippines

Philippines has one of the highest smartphone penetration rates among emerging markets in the world, but a recent study by Frost & Sullivan revealed that the Philippines lagged behind neighboring countries such as Malaysia and Vietnam in terms of ecommerce market maturity. 

The Google study showed that only 1% of small and medium enterprises or SMEs even have a website. These are the same SMEs that represent close to 98% of all registered businesses in the Philippines at which historically, employed goes to two thirds of the Philippine workforce.

Lapez believes however, things may change in the next four years and the Philippines would overrun Singapore by 2.97% by 2020.

“Assuming that there is a steady and solid economic growth and corresponding infrastructure improvements, Philippine ecommerce could grow 20.67% from 2016 to 2020 right behind leader, Malaysia,” added Lopez. He also mentioned the goal was to have no less than 100,000 SMEs doing ecommerce, representing no less than 10% of the country’s GDP by 2020.

After the last two road shows, the forum is now servicing around 150 SMEs from individual artists to retail and food corporations.  

With burgeoning industries such as business process outsourcing and knowledge process outsourcing, new commercial complexes such as shopping malls as well as constantly improving infrastructure to augment its traditional agribusiness and tourism strengths, Davao City has emerged as one of the Philippines’ rising economic cores.

A version of this appeared in The Standard on July 16. Read the full article here.

Thailand recently unveiled a 4.0 economical model to develop Thailand into a valued-based economy, according to Prime Minister Prayut Chan-O-Cha, reports Retail News Asia.

Thailand 4.0 will change the country’s traditional farming to smart farming, traditional SMEs to smart enterprises, and traditional services to high-value services.

The aim is to create creativity and innovation through the application of technology.

As The Nation comments, the challenge of this model is getting the country to come out of its middle income trap.

The government wishes to see farmers become entrepreneurs and SMEs to branch out of being tied to government assistance and to become startups that grow beyond their potential growth areas.

Thailand 4.0 comes after three prior economic models

  • Thailand 1.0 focused on agricultural development
  • Thailand 2.0 focused on upgrading low income households reach middle-income
  • Thailand 3.0 emphasized on  the growth of the industrial industry

The Prime Minister sees 10 target industrial groups to be the new engines of Thailand’s growth, including seven industries that are considered the backbone of the country’s new digital economy.

Ex. the government’s e-wallet platform, PromptPay is an integral part of Thailand’s 4.0 plan to drive the country forward.

Even if this initiative kicks off, the country would not see results for another three to five years. Unless the country makes it a sustainable national aim, the blueprint is dependent on the new government’s stance on the matter, following next year’s impending election.

A version of this appeared in Retail News Asia on July 13. Read the full version here.

New Indonesia tax regulations for online retailers

Indonesian SMEs will have to report their earnings to the government from now on. Source: quartz.com

The Indonesian government plans to implement new tax regulation that will affect individuals and companies that generate revenue and profit through online retailing reports Tech Wire Asia.

Daniel Tumiwa, Chairman of Indonesian Ecommerce Association (idEA) confirmed the special economic package on ecommerce will allow SMEs to be charged a small percentage of tax by the government. The amount will be reasonable and smaller than the current tax rate that SMEs now pay offline. However, the exact rate has not been officially announced.

Anyone who owns an online shop – including those operating through Instagram and Facebook – will be subject to the new regulation.

In 2013, Indonesia’s Finance Ministry issued a regulation that placed a 1% income tax tariff on tax payers with an annual turnover below $363,636. SMEs with an annual turnover below $3.8 million obtain a 50% tax discount.

Transactions from small and medium sized businesses are difficult for Indonesian authorities to monitor as they operate without set regulations. Most of the SMEs are without legal entities or taxpayer identification numbers, which in turns means the businesses are also not protected.

There are approximately 50 million active SMEs operating in Indonesia, but not all small companies can afford to go online. The Indonesian government has also proposed initiatives that would aim to bring 2 million SMEs online within the next two years, with the goal of having 8 million SMEs online by 2018.

It is said that an official announcement of the exact rate should be announced in September after the first phase of the tax amnesty policy implementation, which will increase tax revenue in the future.

A version of this appeared in Tech Wire Asia on July 8. Read the full version here.

new USPS last mile delivery options

USPS Delivery. Source: Wall Street Journal

In the US, more parcel carriers are increasingly using United States Postal Services (USPS) for last mile delivery but sorting system technology serves as an obstacle reports Total Retail.

The parcel carriers utilize their transportation networks to deliver packages close to its final destinations — often to a local post office — and the USPS takes it from there to recipients’ homes or businesses.

It’s cheaper than FedEx and UPS ground services because USPS delivery men can deliver regular mail in addition to packages from retailers.

The last-mile delivery services unify the USPS, UPS and FedEx delivery tracking systems so customers only have to manage one tracking number.

Barriers to using USPS unified tracking system

This omnichannel approach to last mile delivery has its challenges such as using this technology requires a speedy ability to sort and manage a wide range of products and sizes of packages to the ZIP code. Conventional sorting systems are too large and costly to meet requirements.

For example, the facility for one big company occupies over 4 million square feet with more than 17,000 feet of conveyor. This is not a suitable set up for the delivery of low weight products. Consequently, retailers that wish to use USPS for last mile delivery of their low weight products actually need a low weight parcel sorting system to meet their tailored needs.

The parcel sorting system relies on accurate barcode scanning. The wide variation of products, in terms of size and packaging presents a challenge as it requires a vision system to maintain high read rates at constantly shifting focal lengths.

Today’s sorting systems usually rely on line-scan vision cameras that has a single row of pixel sensors that capture image frame as the product moves past the camera. The image frames are fed to a software which makes a complete image.

Although using USPS is cost effective for delivery, it poses challenges for the logistics process of effectively scanning and sourcing products of different types and sizes. Supply chain models across the world, especially in Asia, see a demand for even the most basic technology but the last mile learnings in the US can be applied to Southeast Asia.

A version of this article appeared in Total Retail on July 6. Read the full version here.

Thailand Commerce Ministry to boost SMEs

Ministry of Thailand promoting Thai products in Global Market, Source: madeinthailandfair.com

Thailand’s Commerce Ministry has developed thaitrade.com to link SMEs to trade in the international arena with websites such as Amazon and Alibaba, reports the Nation. This move will encourage small and medium sized enterprises to expand from their usual local landscape.

According to Malee Choklumlerd, Director General of the International Trade Promotion Department,

The Internal Trade Promotion department would talk with Amazon and Alibaba about creating links with www.thaitrade.com to get international buyers interested in purchasing goods from Thai traders.

The department will also launch a project called “Small Order OK” (SOOK) which will encourage small goods companies to trade online, both domestically and internationally.

Thailand Commerce Ministry to boost SMEs

Under this new initiative, SMEs will be able to advertise their products via thaitrade.com and consumers will be able to browse and purchase goods through an e-payment platform. The website will also have a partnership with DHL Express for worldwide shipping allowing business owners to focus on developing their business and products without having to worry about international logistics and supply chain.

Prior to this new international trade initiative, thaitrade.com was only facilitating business-to-business (B2B) transactions and buyers had to order in bulk volumes or large quantities.

The new platform, SOOK will help SMEs generate sales of small orders coming directly from customers.

Over the next three years, the department aims to get 15,000 SMEs to go online.

Recently, there has been more initiatives in getting local trade players to sell internationally online. Most recently, local Thai fruit companies have been establishing an online presence through Alibaba’s Tmall with successful results. This government initiative is a positive step in encouraging SMEs to think on an international scale.

A version of this appeared in The Nation on July 6. Read the full article here.