E-commerce wars to leave few standing
Only a handful of dominant players will survive the intense Thai e-commerce competition, so local businesses must offer unique features, say operators.
Thailand’s e-commerce operators are under pressure from giant internet players that are strong in several areas: finance, marketing, logistics infrastructure, warehousing, and systems.
Singapore-based Shopee offers free shipping with no commission fee to online merchants, while Alibaba’s Lazada offers affordable Chinese products in its Taobao collection to shoppers.
With regional economies of scale, global e-commerce players are very price competitive.
In August, JD Central will join the bandwagon and expects that some existing local players will be pushed out of the market.
Existing local e-markets avoid competing in the red ocean market.
Weloveshopping.com has shifted to support True Corporation’s business and works as an arm of Charoen Pokphand Group, the largest agro-conglomerate.
After selling a 51% share to TCC Group, Tarad.com focuses on providing universal commerce services to earn revenue from additional service (freemium) marketing, fulfilment, and payment instead of commissions.
E-market LNW Mall focuses on complete e-commerce solutions. LNW Shop helps local merchants manage their products and prices on every channel faster and easier.
“In the end, Thailand’s e-market will have only 1-2 dominant players after a stretch of tough competition,” said Nuttawit Polwattanasuk, managing director of LNW Shop and LNW Mall, which has 70,000 active merchants.
Mr Nuttawit said in the past few years, LNW Mall focused on earning revenue from additional services provided through LNW Shop, such as e-commerce solutions to help local merchants manage products and prices to integrate with other leading e-marketplaces including Facebook pages and Line accounts.
“Whenever merchants have new products and update prices, the system will automatically update every marketplace the merchants are in,” said Mr Nuttawit.
He suggests local merchants need to build their own brands and focus more on good services, adding more value or differentiating their products rather than trying to compete with Chinese products.
“Thai producers should focus on the export rather than the domestic market,” said Mr Nuttawit.
Pawoot Pongvitayapanu, founder of Tarad.com, said the company needs unique positioning and additional services instead of burning money by trying to compete with international players.
Local merchants, including importers, distributors and manufacturers, will not survive if they don’t have unique selling points as well as innovative products, said Mr Pawoot.