Ensogo banking on shift to B2C strategy

Ensogo Thailand, the local operating unit of Southeast Asia’s leading e-commerce business, is boosting its presence in its own e-marketplace by focusing on supplies from both local and foreign sellers who can make cross-border deliveries.

A cross border e-marketplace platform has been created to directly connect foreign sellers to local buyers.

“The shift from a consumer-to-consumer (C2C) to a business-to-consumer (B2C) e-marketplace model is aimed at building new sustainable revenue streams,” said Jutharat Piboonthamasak, managing director of Ensogo Thailand.

Ensogo Thailand shifted to the B2C model late last year to allow the company to scale rapidly and operate globally. Instead of waiting for its marketplace to gain traction and then charging sellers, Ensogo early this month started charging its sellers right from the beginning.

Ms Jutharat said Ensogo Thailand currently has 2 million product items, up from 35,000 in November.

“We expect the number of products available at our marketplace to reach 5 million by the year-end.”

Its best-selling products are electronics, fashion, beauty and home decoration items.

Ensogo expects product sales to account for 10-20% of total revenue, with the remaining 80% coming from service sales, she said.

Ms Jutharat said Ensogo Thailand is restructuring in order to reduce costs and increase operational efficiency.

The restructuring is in line with Ensogo’s regional policy, which has cut staff across the region from 600 to 300.

A report by Tech in Asia, an online platform for Asia’s tech community, said the layoffs were part of a move to centralise the company’s operations. It could also reduce Ensogo’s cash burn rate by 40% by June.

The downside, however, is a slowdown in management of merchants.

Merchants, mostly from Malaysia, have slammed the company for delayed payments and its slow response to their calls and emails.

“As the Thai operating unit has a strong customer base and sufficient revenue, we slightly reduced the number of staff from 140 to 100,” Ms Jutharat said, adding that the company has no problems with its merchants in Thailand.

Ensogo Thailand, however, hired more technical staff to support expanding e-marketplace services and enhance the new version of its mobile apps.

Ms Jutharat said Ensogo Thailand has performed well in the flash sales of services in the past six years, with a strong market share in daily deal coupons.

However, she acknowledged that the government’s policy promoting long holidays to boost local tourism caused a 15-20% decline in online sales in April and May.