Thailand
Thailand: E-commerce seen growing in stature
E-commerce is set to become the main channel for business next year, with major e-marketplaces enjoying rising profits while local shops and grocery stores fade away, said Pawoot Pongvitayapanu, an e-commerce pioneer.
“E-commerce will clearly become the main channel for sales among some businesses in 2022,” said Mr Pawoot, chief executive and founder of Tarad.com, a local e-commerce solution provider.
Fashion, cosmetics and IT gadgets will be the key products enjoying rising e-commerce sales, he said.
The growth of sales via e-commerce would be gigantic among some businesses relying on an online channel.
The second trend is that JD Central, Shopee and Lazada — the three major e-marketplaces in Thailand — will move into profit-making mode, he said.
Lazada gained 14 billion baht in revenue in the first half of this year with a profit of 226 million baht.
This shows that some operators have ended their cash-burning strategies and are more focused on creating revenue, he said.
Shopee earns money through commission fees from sales and ads, while Lazada gains revenue from ads taken out by small merchants without commission fees.
However, for LazMall, a premium brand-focused feature, Lazada gains a 2-10% commission fee from brands, which is still lower than a commission fee of around 30% collected through traditional retail operators.
“This causes brands and factories to shift towards e-marketplaces with more ad spending on these channels rather than media outlets,” said Mr Pawoot.
According to Mr Pawoot, the number of local groceries or shops in provinces will start to diminish next year since consumers will be more familiar with online purchases.
He said the super app war will gather momentum in 2022.
Banks are pushing hard to act as super apps to attract customers. Shopee is now looking into expanding its reach to ShopeeTravel and ShopeeFood.
Parcel delivery service operator Flash Express plans to expand its reach beyond its last-mile delivery to e-payment and warehouse businesses, he said.
Businesses may be linked with various platforms, capitalising on promotions they offer, Mr Pawoot said.
He said live commerce will be taken seriously, and some popular live merchants may now look to sell products under their own brands.
“We will see many sellers start to make their own brand products as they have the potential to gain 100-200% more than before,” Mr Pawoot said.
Another key trend next year will be the combined and automated e-commerce where all data from all channels, including sales from TV and online, will be pooled and analysed to determine which channels would be the best option.
Automated processes, including chat bots, billing, invoice issuance and data collection, will be needed to quicken the sales process, Mr Pawoot noted.
Next year, retail automation such as vending machines will gather pace, he said. The prices of these vending machines are declining and could be worth brands investing in to sell their products.
According to Mr Pawoot, spending on ads through online channels will be more aggressive in line with the rise of online sales, while brands and factories are pivoting towards e-marketplaces and social media to sell products directly to consumers.
The final trend concerns “cryptocommerce”, in which cryptocurrencies will be used more seriously in commerce.
Cryptocurrencies can now be used to purchase vehicles and clothes, and even hire people, including lawyers, Mr Pawoot added.
Source: https://www.bangkokpost.com/business/2231543/e-commerce-seen-growing-in-stature