Cross-breed businesses way forward
AIM TO BUILD LARGEST RETAIL NETWORK
Up to 20,000 stores in communities nationwide are encouraged to team up to build the largest retail network as part of state plans to modernise trade and strengthen the growth of small and medium-sized enterprises (SMEs).
The closer connection among businesses, along with more use of technology to enable them to explore new market frontiers and what deputy Commerce Minister Sonthirat Sonthijirawong calls “cross-breed businesses”, are viewed as key components in the state’s economic drive.
He coined the phrase cross-breeding in the sense that when two different businesses partner with one another, new business opportunities will occur and, with currently 2.7 million SMEs, this partnership will help the government gather momentum in pushing the economy ahead.
In the recent trade event “SME Matching Day 2017”, presided over by Mr Sonthirat, the deputy commerce minister divided the grouping into two parts.
One will be formed among the 20,000 stores currently financed by the state Village Fund while the other is the matching between SMEs and startups, known to be technology buffs.
The government already started a pilot project to connect 20 community stores, urging them to open outlets online and share sales information through computer software.
The initial outcome has been satisfactory as they are able to boost their sales, Mr Sonthirat said.
He believes similar success should occur if the store connection is done on a larger scale.
“If we can connect 20,000 stores, they will become the largest network of community retailers,” he said.
The other grouping aims to help SMEs. Their relatively small size has restricted their growth, so if they seek partners among startups, cross-breeding will occur and they will be able to overcome certain limitations, Mr Sonthirat said.
Kasikorn Bank deputy managing director Surat Lilathawitwat also supports the cross-breeding idea as a fast track towards new business opportunities.
This type of partnership is gaining in popularity. This year, up to 477 SMEs entered the matching, a 19% increase from those that entered last year, he said.
The grouping will help SMEs to improve their business management because startups are adept at technologies which can be applied to facilitate entrepreneurs’ work and speed up business growth, Mr Sonthirat said.
He expected this solution will lead SMEs to become major contributors to the Thai economy.
“Currently about 2 million SMEs only play a minor role, leaving a few large companies to drive 80% of GDP,” Mr Sonthirat said.