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personal touch in Ecommerce Thailand

Source: Dario Pignatelli — Bloomberg/Getty Images

A global survey by PriceWaterhouseCoopers revealed that more than 51% of Thai online shoppers made their purchase via social media. In second place is India with 32%, followed by Malaysia and China at 31% and 27% respectively. This trend is driven by the key consumer trend, which is based on trust.

The importance of personal touch in Thailand ecommerce 

The “personal touch” that shopping via social media offers has been highlighted as a reason behind this environment of trust, which the larger ecommerce companies selling products via websites are unable to muster. LINE or Instagram accounts allow people to communicate directly with sellers, unlike the impersonal experience with web administrators of an ecommerce website, says Pavida Pananond, associate professor of international business at Bangkok’s Thammasat University.

Thailand’s B2C Stats

  • Products $14- $42  per order, accounted for  approximately $13.4 million of Thailand’s $59.7 billion of ecommerce sales in 2015
  • B2C sales in 2014 came to $11.6 million, out of $57.4 billion in total ecommerce sales

However, social commerce has also had its share of bad eggs. The mainstream media and online chats are occasionally peppered with reports of unscrupulous sellers trying to rip off unsuspecting buyers in this predominantly cash-based market, where cash still accounts for 90% of payments nationwide.

However, such setbacks barely dented the direction the online market is taking. The subsequent spread of ecommerce is reflected in the online trade countrywide, with once-dominant Bangkok now accounting for just 30% of the market, with the majority of ecommerce transactions now taking place in the provinces.

“In the provinces, it is not about the online experience but an easier way to get stuff you want,” says Santit Jirawongkraisorn, co-founder of Lalamove, a Bangkok-based logistics company.

A version of this appeared in Nikkei Asian Review on June 26. Read the full article here.

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.  

Omise, a Bangkok-based payment enabler much like Stripe, has raised a $17.5 million Series B round to expand its reach across Southeast Asia, reports TechCrunch.

The company proves a payment gateway system that allows any retailer take credit card payments online. Omise isn’t releasing any figures for its business but Harinsut said the company can reach profitability inside the the next year.

The company offers its service in Thailand and Japan (the birthplace of CEO Jun Hasegawa), but there are plans to expand to Indonesia, Singapore and Malaysia, where it has carried out closed testing.

Omise funding history

This new round, which is one of the largest for a fintech company in Southeast Asia to date, was led by Japan-based SBI Investment, with participation from Sinar Mas Digital Ventures (SMDV) in Indonesia, Thailand’s Ascend Money (affiliated with mobile operator True), and existing backer Golden Gate Ventures. Omise has now raised over $25 million, including a $2.6 million Series A in May 2015 andundisclosed round from Golden Gate Ventures last October, right after the Singapore-based VC firm announced a new $50 million fund.

Competitive e-payment market

There are many rivals, including 2C2P which raised $7 million last year and ispowering a social commerce trial with Facebook. Stripe, meanwhile, is in the region, but it appears to be working on creating demand in the U.S. from overseas via its Atlas project, rather than going for a full-on localization approach.

Unlike its local competitors, Omise is solely focused on digital payments and not cash.

Around 60% of payments online right now in Southeast Asia.

He explained that the challenge is about reaching suitable scale. Omise makes its money by charging 3.65% on transactions, with a one dollar fee for up to $60,000 (1 million THB) withdrawn, but it offers flexible packages for larger customer.

A version of this appeared in TechCrunch on July 21. Find the original version here.

Glazziq plans to expand regionally as they find success selling high-quality, affordable glasses designed in-house and made on OEM basis in Thailand, reports The Nation.

The Warby Parker model success

“It was really about bypassing retailers, bypassing the middlemen that would mark up lenses 3-5x what they cost, so we could just transfer all of that cost directly to consumers and save them money.” – Neil Blumenthal, Founder of Warby Parker.

Based on the popular American glasses brand, Warby Parker, Glazziq will deliver the frames to customers at home, for which it charges a deposit of 300 THB, which be returned as a full credit, she said, adding that once they have finished their trial, customers can simply drop off the frames at any 7-Eleven store around the country.

glazziq, Ecommerce Startup Glazziq Plans to Expand Regionally

Source: tcdcconnect.com

Customers can get their eyes tested for free and a prescription issued at any of over 100 Better Vision – or Hor Wan – eyewear stores nationwide.

The prescription will then be automatically put into the www.glazziq.com system for matching with the order, and sent directly to the factory where the frames and lens will be assembled and despatched to the buyer’s home address.

Customers will receive the finished products within five to 10 days of their prescription entering the system

The website, launched last December, has already grown to more than 100 orders being placed monthly.

The company plans to expand to Malaysia and Singapore next year, with the eventual goal of becoming one of the largest eyewear ecommerce operators across Southeast Asia and Asia-Pacific, the Chief Executive, Prinda Pracharktam said.

The standard business models in Southeast Asia are looking to the West to successfully adapt to the ever-changing customer demographic in Asia while remaining focused on the local market. Glazziq is a perfect example.

A version of this appeared in The Nation July 14. Find the full version here.

Lazada Thailand CEO at Alibaba

Lazada Thailand’s CEO, Alessanndro Piscini (center right) outside of the Alibaba Headquarters

After buying a controlling stake in Lazada in April, Chinese ecommerce giant Alibaba shares its Big Data & Analytics platform with Lazada, reported the Bangkok Post.  Alibaba hopes the data sharing will provide online merchants with relevant consumer purchasing data and allow Chinese retailers and manufacturers to sell their products through Lazada’s site. This will open opportunities for Chinese retailers to tap into the largely untapped Southeast Asian demographic of 500 million people.

Thailand Ecommerce Stats at a Glance

In light of this announcement, Alessandro Piscini, Chief Executive Officer of Lazada Thailand made some comments on the current nascent landscape,

  • The average Thai person spends 7.4 hours per day on different media platforms, with mobile phones accounting for 3.1 hours of that total. This demonstrates that online channels are increasingly playing a more important role among Thai users

By 2019, of every $10 dollars (THB 350.50) retail purchase made globally, at least one dollar would go online (Neilsen)

  • Policymakers and consumer protection authorities must closely monitor ecommerce companies to make sure they deliver on what they promise to consumers
  • 69% of Thai smartphone users do research online before making a purchasing decision
  • Thailand’s online retail market will continue to grow thanks to the rapid adoption of 4G smartphones and increasing numbers of mobile internet users
  • Despite Ensogo’s recent closures, Lazada isn’t worried because they operate through a different model and have financial support from Alibaba

There have been many speculations in regards to Lazada’s new road map after the large acquisition. An anonymous source has confirmed the two companies are in the midst of integrating new policies and HR initiatives to encourage outstanding employees but translating legal documents from Chinese into English first has slowed down the process. Piscini has stated that the company has no plans to rebrand.

A version of this appeared in Bangkok Post on July 5. Read the full article here.

Thai-fiance-minister, Thai Companies To Get Tax Break Incentive To Help SMEs

Source: National News Bureau of Thailand

The Thai government wants to impose another measure to encourage big companies to help SMEs. According to Apisak Tantivorawong, Thailand’s Finance Minister, this initiative will allow the big corporate players to request tax deductions one to two times higher than for normal expenses for helping SMEs.

The government is set on developing and helping SMEs grow, as there are up to 2 million operators in the small and medium enterprise segment. Businesses can provide SMEs with accounting advice, computer software or be a loan guarantor for new entrepreneurs. Apisak Tantivorawong, Thailand’s Finance Minister comments,

If we can upgrade 500,000 or 1 million firms to be strong players, it will be a powerful driving force for the economy. 

The government sees that small players should receive proper support and perhaps narrow the gap with the larger corporations.

“Large corporations have money to pay for cutting-edge technology, which will eventually replace the human workforce. So it makes sense for us to boost growth in SMEs, who will help the country maintain the employment rate,” said Mr Apisak.

A version of this appeared in Bangkok Post on July 2. Read the full article here.