Chinese e-commerce giant, Alibaba has entered into a strategic partnership with the Thai government. It is representative of the growing collaboration between Alibaba and the Thai government. Two years prior, the duo signed a Letter of Intent, which established the foundation for joint efforts to boost the capacity of Thai entrepreneurs in gaining access to new markets and capitalising on digital innovations.
The partnership comes on the back of Bangkok’s drive to develop Thailand’s digital economy and the Eastern Economic Corridor under the Thailand 4.0 policy. The policy is a long-term endeavour to transform the economy from being industry-driven to becoming more technologically-driven.
The five main areas of cooperation highlighted in the partnership include – establishing a Smart Digital Hub in Thailand’s Eastern Economic Corridor, equipping small and medium enterprises (SMEs) with e-commerce skills, training Thai digital talent, establishing an official flagship Thai rice store on Alibaba owned e-commerce site, Tmall and intensifying cooperation in digital tourism.
Besides the evident transfer of technology gains for Thailand, this partnership also opens up a plethora of opportunities for Thai entrepreneurs to enter the Chinese market. The land of the dragon holds an immense market potential of 1.38 billion people with a growing middle class. A mere five percent penetration of the Chinese market will already equal the entire Thai market size.
“There is no better time than now for trade-oriented countries to seize this opportunity to export to China as the country continues to open its doors wider for global trade,” said Jack Ma, Executive Chairman and co-founder of the Alibaba Group.
The primary method for Thai entrepreneurs to gain Chinese market access will be via the Alibaba platform. The e-commerce giant has 500 million active Chinese users and its presence is only growing not only in China but the world over. On top of that, budding entrepreneurs especially those from rural areas, would be able to undergo training from a joint partnership between Alibaba Business School and relevant Thai ministries. The training will allow individuals an opportunity to gain e-commerce knowledge and skills to leverage on the internet to either begin or expand their businesses online.
Besides that, the Thai government will help actively promote uniquely Thai products online to Chinese consumers. Tmall, a virtual mall operated by Alibaba Group would be the platform on which the Thai government will open its first ever flagship rice store. The commodity is one of the country’s main exports. Tmall, which is also the world's largest third-party platform for brands and retailers will also feature Thai fruits and other agricultural products for Chinese consumers.
“Quality Thai agricultural products such as fragrant rice, durian and other tropical fruits in particular are sought after by the Chinese consumer,” Ma noted.
The strategic cooperation with Alibaba will bring benefits to Thai SMEs and farmers as well as to the tourism industry, while pushing forward digital economic development in Thailand," said Thai Deputy Prime Minister, Somkid Jatusripitak.
Besides that, Alibaba’s smart digital logistics business, Cainiao Network will establish a Smart Digital Hub in Thailand’s Eastern Economic Corridor (ECC). The EEC covers the three eastern provinces of Chachoengsao, Chonburi, and Rayong and is slated to become a regional powerhouse for transportation and logistics. The hub will leverage on Cainiao's expertise in data and logistics technologies and processes to optimise the cross-border flow of goods.
“The Smart Digital Hub will be an important platform to link Thai SMEs, OTOP (One Tambon One Product) and agricultural products to, not only China but also global markets,” remarked Jatusripitak.
Ground-breaking for the Smart Digital Hub is expected in 2018, and it is anticipated to commence in 2019.
The Thai government will also be working with Alibaba’s Figgy – one of China’s leading online travel service providers – to digitalise its tourism sector. Additionally, they will also be collaborating with Ant Financial – which operates Alibaba’s Alipay online payment platform. This would be crucial to attract Chinese tourists who rely significantly on e-payment platforms like Alipay and WeChat Pay for day-to-day transactions.
The Alibaba-Thailand partnership will prove crucial towards achieving Thailand’s digital transformational goals. The situation serves as a win-win, especially since Chinese companies are looking towards Southeast Asia as the next frontier after mainland China. With the Thai population representing roughly 11 percent of the ASEAN market, this endeavour will prove beneficial to Alibaba as much as it does to the people of Thailand.