Wednesday, May 5, 2010

Thai Internet users turn to e-commerce

Thailand's growing number of Internet users are, at last, beginning to feel comfortable with e-commerce.

Major online traders are forecasting annual growth in e-commerce ranging from more than 20 per cent to as high as 40 per cent, despite the country's recent political turmoil.

Tarad.com's managing director Pawoot Pongvitayapanu said that Thai Internet users had changed their behaviour to accept online trading and make purchases over the Internet. This is because companies doing business online have made Internet transactions safe and created an atmosphere of comfort for users.

He said consumers were changing their lifestyles and spending much more time online. Traditional businesses are also changing to online operations in order to expand their customer bases. Having adopted information technology, companies are also using enterprise-resource planning to support their operations and are becoming more involved in business-to-business (B2B) trading.

Moreover, a major factor driving e-commerce in Thailand is a trend of empowerment among Internet users, both in cities and rural areas, to make purchases over the Internet, he said. Businesses are able to provide pre-orders to Internet customers and to provide online catalogues.

Pawoot said e-auctions, laws relating to e-commerce transactions, logistics, network infrastructure and the behaviour of Internet users were all playing an important role in driving e-commerce, which should grow by about 30 per cent this year.

According to the National Statistical Office, total e-commerce transactions in 2008 were valued at Bt527.9 billion. Of this, business-to-government (B2G) transactions were worth Bt290.8 billion, or 55.1 per cent; business-to-business (B2B) transactions were valued at Bt190.8 billion, or 36.2 per cent; and business-to-customers (B2C) were worth Bt45.9 billion, or 8.7 per cent of the total.

Fashion and computer and electronic devices are popular categories in which individual customers spend money online.

Pawoot said Tarad.com now provided an online premium mall and a market place, and had a customer base of 1.5 million Internet users.

There are 170,000 online business entrepreneurs with 26 product categories running their businesses via Tarad.com. The firm provides a new e-commerce business model for start-ups that runs both offline and online e-commerce transactions. It also provides an augmented-reality product search, making it easier for customers to find products.

The company now has six channels for online transactions or online payments, including bank transactions, credit cards and mPay - which allows users the convenience of shopping and doing business via the e-commerce business model. All of this creates confidence among customers, Pawoot said.

Talad.com is also planning to provide cross-border e-commerce, with links to Japan, Taiwan and China in the near future.

"E-commerce offers an opportunity to encourage Thai business - which is now in a transition period - to adapt to online business and compete on international markets," Pawoot said.

OfficeMate's managing director Worawoot Ounjai said e-commerce business in Thailand was continuing to grow by at least 30 per cent per year because local Internet users had changed their behaviour and lifestyle and were now buying products over the Internet.

"I think that e-commerce business will continue to grow for more than five years at around 30 to 40 per cent per year, since e-commerce in Thailand is just starting up. New infrastructure such as 3G will enable companies to launch online businesses at lower cost and will give customers much more convenience and comfort in shopping online," he said.

Worawoot said his company expected its e-commerce operations to grow by more than 40 per cent this year because the political turmoil was driving Internet users to access products and services online. During March, when the red-shirt protests began in Bangkok, his company achieved revenue growth of about 15 per cent, year on year.

However, he said the quality of some products and online businesses were an obstacle to growth in the e-commerce market.

"He suggested that small- and medium-sized businesses that planned to offer products and services over the Internet should first register with the Department of Business Development and receive a "trust mark" certificate identifying their online business. There are now more than 100,000 online businesses in Thailand and only about 7,000 of them are registered and certified by the department."

Worawoot said his company provided an online business platform for about 80,000 businesses and organisations around the country at www.officemate.co.th. They offered about 20,000 products.

The company also provides an e-commerce platform for home users and individuals at www.trendyday.com.

"I try to do new business that is related to existing business, so that these businesses run smoothly without spending a lot on resources. They save the costs of investment. As a result, these businesses are able to run with high efficiency," Worawoot said.

The company is developing an e-procurement customisation system to support paperless procurement for its customers. It is expected to be able to support 80,000 customers in the near future. It is also developing an intelligent selling process that will enable companies to increase sales revenue per transaction.

Worawoot said OfficeMate expected to reach revenue of about Bt1 billion this year, representing year-on-year growth of about 20 per cent from last year, when revenue reached Bt914 million.

It also plans to expand it business into Indochina next year. Vietnam will be its first foreign market, where it intends to run its business with local partners.

"I think we have an opportunity to expand into Vietnam, Cambodia and Laos, and then expand to other Asian countries over the next several years," Worawoot said.

3 comments:

Angella the Thai Girlfriend Advisor said...

Yes..it has been slow because many thai people fear doing business on the internet or giving credit card details away etc....

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