E-commerce may boost Thailand SMEs' income and reach

A convenience store employee in Bangkok.
NOVEMBER 07, 2019 - 4:57 PM

A SMALL Thai retailer who expands into online sales can boost takings by an average of 51 per cent a year, according to a new report released by an e-commerce platform provider.

The shift into “e-tail” has also grown retailers’ customer bases beyond their home markets, especially for lower-income regional sellers based outside the capital region of Bangkok.

South-east Asian online services company Sea Group polled close to 7,000 vendors in Thailand that use its Shopee e-commerce portal. Of these, just under one-third had a pre-existing offline business, while the rest sold their wares online from the outset.

Traditional bricks-and-mortar vendors saw receipts from both online and offline sales increase after launching their products on the e-commerce platform, the Sea survey found, with the income growth coming on the back of improved employee productivity.

Sea said that higher worker efficiency “is especially important in the context of (the) Thai economy, where there are severe labour shortages” and suggested that e-commerce adoption could ease the manpower crunch for Thailand’s small and medium-sized enterprises (SMEs).

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Meanwhile, the share of retailers with customers outside their regional markets rose broadly from 45 per cent to 81 per cent - almost double - after e-commerce adoption, the survey also found.

The jump was sharpest in Thailand’s lower-income north, where the share of sellers with non-local customers surged from 43 per cent to 92 per cent. But even vendors in the capital district of Bangkok posted an increase, from 38 per cent to 72 per cent.

Santitarn Sathirathai, group chief economist for Sea, said in a statement that e-commerce “is generating a tangible economic benefit for the country” by “increasing the competitiveness of SMEs, empowering sellers who reside outside Bangkok, and paving the way for new types of entrepreneurs”, such as students, homemakers, and people who already work another job.

Overall, the latest forecast from Google and Temasek Holdings has pegged the gross merchandise volume of Thailand’s e-commerce industry to swell from about US$900 million in 2015 to US$18 billion in 2025 - a compound annual growth rate of 35 per cent, out-pacing the other digital industry segments of online travel, online media and ride-hailing services.