E-commerce players feel the heat as bargain hunters call shots
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Buyers have become more price sensitive and less loyal to the online platforms in a trend that has prompted an intense “pricing game”, the event heard. Consumers are switching over to the e-commerce operators that offer better promotions and prices.

The seminar also heard that so-called social commerce (s-commerce) has become another competitor, under a model where sellers and buyers can make shopping transactions directly.

Pawoot Pongvitayapanu, founder and managing director of Tarad.com, said the platform was launched about 10 years ago as the first e-marketplace in Thailand.

“Today, we are adjusting the positioning of Tarad.com to cope with more intense competition in the e-marketplace model. Without the new positioning, we would not be able to compete against other marketplaces,” he said.

Speaking at the e-marketplace forum held on Sunday at Thailand e-Commerce Week 2017, Pawoot said that nowadays competition in the e-marketplace has become more of a pricing game. Consumers have become more price sensitive and have less loyalty as they follow the bargains.

“Today, the actual competitors in the e-marketplaces are not other e-marketplace players, but s-commerce operators, such as Facebook and Instagram, where sellers and buyers can make their own transactions directly,” said Pawoot.

Thanida Suiwatana, chief financial officer – Thailand, Lazada Group, said that that Thai consumers have become more confident about online purchases.

“We spent a lot of money in doing marketing campaigns. both offline and online, to generate traffic,” said Thanida, adding that Lazada is now a top 10 e-marketplace in Thailand in terms of traffic.

“Having good traffic is one of the most important factors for both bricks and mortar stores and online marketplaces. Any online platforms that can generate good traffic will have more chances to sell products.”

Nuttawit Pholwattanasuk, managing director and co-founder of LnwShop, said that the platform serves individual vendors, enabling them to have their own website and space. It is similar to the idea of a developer of a market or shophouse allowing individual merchants or retailers to do business within their own retail space.

Eric Bui, head of operation, Shopee Thailand, said that online marketplaces now go beyond the transactional, with a focus on the engagement between buyers and sellers as part of an ongoing relationship.

“The way we do our listings and provide services to the sellers, everything is free, with no commissions or listing fees,” he said. “The shipping fee has been subsidised by Shopee. There is no reason why the listings on Shopee should not be the cheapest in the country.”

Haejin Pyun, general manager, marketing strategy, 11street Thailand, said the company started the Thai operation in February.

“We consider sellers and buyers alike to be very important. While other e-commerce players care about the buyers only, we care about the sellers sometimes more than the buyers,” said Pyun.

“In Thailand, more than 50 per cent of the transactions come cash on delivery. At 11street, more than 70 per cent of the transactions come from credit cards. We see a big potential to grow in the Thai e-commerce.

“However, to grow the e-commerce business in Thailand, the payment method is very important. In South Korea, credit card penetration is more than 90 per cent, compared to only 10 per cent in Thailand. Even though they have credit cards, Thai shoppers are still hesitant to put their credit card numbers on an e-commerce site.”

Thananan Arunragtichai, assistant director of Ascend Commerce, said that the company has operated the weloveshopping.com for 15 years as a store front. For its website, the e-marketplace model was introduced three to four years ago.

“Today, Thai consumers have greater expectation for marketplace services, such as cheap prices and high quality, as well as good after-sales service. As an e-marketplace operator, we need to manage their expectations properly,” he said.


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