E-commerce Bigwigs Push for National E-Marketplace for Local SMEs
So, e-commerce leaders are putting forth the idea of setting up a national e-marketplace to give small and medium-sized enterprises (SMEs) in the local scene a chance to shine. The aim is to provide these businesses with an alternative to the big foreign e-marketplaces that are currently calling the shots in the e-commerce arena, constantly hiking up their commission fees and dominating the market.
Where and when did this all start, you ask? Well, in Southeast Asia, only Vietnam and Indonesia have managed to pull off successful local e-marketplaces. In 2024, Thailand’s e-commerce market was valued at a whopping 1 trillion baht, with e-marketplaces claiming 50% of the share, video commerce at 20%, social commerce at 18%, quick commerce and grocery at 8%, and brand-owned websites at 4%, according to Priceza, a shopping search engine and comparison platform.
Now, let’s hear it from Pawoot Pongvitayapanu, the founder of Tarad.com and honorary president of the Thailand E-Commerce Association. He mentioned that the government has tried to support around 20-30 local e-marketplaces over the past 25 years, but they all ended up biting the dust. Why, you may wonder? Well, apparently, about eight of these local marketplaces couldn’t keep up due to their lack of significant marketing investments and promotional efforts to draw in customers from the foreign-owned platforms. The big foreign players were playing dirty by making hefty investments, providing free services, and slashing prices to control the market. Shopee, for instance, racked up losses of 15.6 billion baht from 2015 to 2023, while Lazada wasn’t far behind with losses amounting to 13.7 billion baht between 2017 and 2024. And to add insult to injury, they gradually increased their commission fees from zero to 20-30%, as Pawoot pointed out.
Wait, why does this matter again? Oh right, because it’s high time for Thailand to have a national e-marketplace to give local businesses a fighting chance. Mr. Pawoot emphasized that this marketplace wouldn’t be in competition with local e-marketplace operators but would focus on implementing government policies to support SMEs. This national e-marketplace would operate independently from the government and include shareholders such as strategic investors and key state agencies, according to Mr. Pawoot. His idea is to link up with trusted standard organizations to bring local products onto the platform.
But hey, what about those pesky Chinese manufacturers flooding Southeast Asian markets through foreign e-marketplaces, you ask? Mr. Pawoot believes that having our very own national e-marketplace for specific local products could help them survive this onslaught. Thanawat Malabuppha, the honorary president of the Thailand E-Commerce Association and founder of Priceza, chimed in, saying that Thailand needs to strive for digital commerce independence and lessen its reliance on foreign-owned marketplaces. A whopping 70% of Thailand’s e-commerce market value last year was gobbled up by foreign players like Shopee, Lazada, and TikTok. This dependency on foreign players could spell trouble for the nation’s retail landscape, Mr. Thanawat warned.
So, what’s the game plan here, you ask? Well, according to Mr. Thanawat, Thailand needs to adopt a three-pronged approach, tackling all strategies at once. Firstly, supporting the growth of existing Thai-owned marketplaces is key. He singled out NocNoc as a top contender for state support, stressing that not all platforms can receive equal backing. Secondly, encouraging brands and retailers to launch direct-to-consumer e-commerce websites is crucial. The government should team up with Thai web development platforms to help brands establish their online presence. And last but not least, developing a national digital marketing ecosystem is essential. Leveraging Thailand’s vast network of content creators to promote local products through affiliate or digital marketing could be a game-changer, Mr. Thanawat suggested.
In conclusion, the push for a national e-marketplace for local SMEs in Thailand is gaining momentum, with industry leaders advocating for a shift away from foreign-dominated platforms. The move aims to empower local businesses, reduce dependency on foreign players, and bolster the nation’s retail sector in the digital age. It’s clear that change is on the horizon, and Thailand is gearing up to carve out its own space in the e-commerce landscape.
