The Electronic Transactions Development Agency’s (ETDA) latest report has revealed that the market value of business-to-consumer (B2C) e-commerce in Thailand ranked the highest in Southeast Asia at US$23.3 billion in 2017. It also expects the value of Thailand's e-commerce market to reach US$93.2 billion this year, up 8.5 percent from last year, driven by the continuous growth of social commerce.
Despite the staggering growth e-commerce has enjoyed in Thailand, new and innovative brick and mortar shopping malls keep popping up. Just recently, Central Pattana Plc (CPN), Thailand's largest retail property developer celebrated the Grand Opening of Central Phuket, establishing a new central business district in the heart of Phuket, the biggest island in Thailand.
But how will Thai shopping malls compete with the ever-growing e-commerce market? One shining ray of hope seems to be coming from Japanese-based shopping app Gotcha!mall which launched its operations in Thailand earlier this month as the first step towards expansion into the South Asian market.
How it works
The Gotcha!mall app provides customers with the opportunity to get coupons which they can then use at brick and mortar shops which work in partnership with the app. A customer simply signs up, logs in, chooses which store they wish to visit, and clicks on a coupon for the store. Each coupon costs one coin which is either earned every five hours (a maximum of three coins can be earned this way), or through participating in special events. Only a maximum of 20 coins can be kept at any one time.
Gotcha!mall Thailand Director & Project Manager Toshiya Matsuo says the plan is to work with all retail outlets in Thailand as the app is the only one of its kind in the country currently.
“Gotcha!mall is targeting convenience stores, supermarkets, cosmetic shops, drug stores, restaurants and coffee chains among others. Gotcha!mall will be able to get more consumers to go to brick and mortar stores,” he told The ASEAN Post.
But in Japan, the app’s country of origin, e-commerce still has a strong hold on the market. Statistics from Japan’s Ministry of Economy, Trade and Industry (METI) as of April this year shows that the B2C e-commerce segment there was valued at US$14.8 billion in 2017 compared to US$13.5 billion in 2016; rising by 5.7 percent from 2010.
Nonetheless, reports indicate that Gotcha!mall recorded impressive growth rates from 2017 to 2018 in Japan as well as in Taiwan. It was following this achievement that parent company Grand Design decided to expand its operations into the ASEAN market, starting with Thailand.
“As an ASEAN hub, Thailand provides a good opportunity in retail and online business expansion. Moreover, Thai consumers do online shopping because it is so convenient and fast,” Grand Design founder Kazuya Ogawa said.
No easy task
It is not an easy task facing up to the e-commerce juggernaut and this is especially true in Thailand. A recent study by Google and Temasek predicts that Thailand’s e-commerce market will grow from US$900 million in 2015 to US$11.1 billion by 2025 (at 29 percent of the compound annual growth rate or CAGR). This will make the e-commerce sector in Thailand the second largest in the region after Indonesia.
“Thailand will be the hub for e-commerce and e-payments in the ASEAN Economic Community (AEC) by 2017,” predicts Kulthirath Pakawachkrilers, managing director of Joyfulness Co. and e-commerce specialist.
Source: ASEAN UP
Google also found that in general, Southeast Asia will be the next major boom market for e-commerce in the Asia-Pacific region. In an interview with local media, Marc Woo, Google’s head of e-commerce, travel, and financial services, said there were two reasons for this: a growing middle class and rapidly expanding internet access.
According to Nielsen’s projections, ASEAN’s middle-class population will reach 400 million in 2020, up from 190 million in 2012.
Gotcha!mall has its challenges cut out for it but considering its impressive track record and Thailand’s innovative malls, brick and mortar could still continue to thrive in the age of e-commerce.