BANGKOK -- Southeast Asia has been one of the hottest destinations for venture investors and startups in recent years. Its combined population of almost 700 million offers opportunities for businesses ranging from e-commerce to mobility services.
Thanawat Malabuppha, co-founder and CEO of Priceza, a shopping search engine and comparison platform in Thailand, said the e-commerce markets of Thailand and other Southeast Asian countries have huge potential due to their sheer size. But he warned that companies would have to spend a lot of money to change consumer behavior.
According to the Google/Temasek e-Conomy 2018 report, Thailand’s e-commerce sector takes up only about 3 percent of the total retail market, though the former is expected to grow from $3 billion in 2018 to $13 billion by 2025.
Priceza Co-founder and CEO Thanawat Malabuppha
“Many customers still have trust issues with e-commerce and mobile payment. That’s why cash-on-delivery accounts for more than 50 percent,” he said.
In many Southeast Asian e-commerce markets, platforms are bleeding money due to excessive sales promotions, such as discount coupons, free shipping and low commission fees.
Priceza’s strategy is to win over shoppers by offering reliable shopping data and experience, said Malabuppha, who is also the chairman of the Thai E-commerce Association.
“A bigger number of sellers or products is not enough. We have to provide best-quality, reliable shopping search results,” Malabuppha said.
In 2010, Priceza was founded by three computer engineers as an early pioneer when the country’s e-commerce market was in the nascent stage. Its vision was “to make a retail ecosystem in SEA as transparent as possible through information and realize a market of perfect competition, benefiting both buyers and sellers.”
Now the company has become one of the leading startups in Thailand. It has expanded to five neighboring markets: Indonesia, Malaysia, Singapore, Philippines and Vietnam.
Being in the industry for nine years has enabled it to collect a massive pool of data on users and sellers, including preferences in brands and items as well as price sensitivity. With these tools, the company now focuses on providing personalized advertisements amid emerging challenges.
“We want to differentiate us from other competitors such as Google, which launched a price comparison service several months ago. Based on the big data of consumers and the largest products listings of 100 million products, we will focus on providing personalized advertisement so that customers could make the best shopping decision,” he said.
E-commerce in Thailand is likely to face challenges from demographic changes.
“Everyone in the retail sector will suffer in the next 10 years because the birthrate will go down to minus,” he said.
Priceza is focusing on the age group of 25-35 years old, who have the biggest spending power, but it plans to expand to other age groups. The company also wants to expand its presence in overseas markets, especially Indonesia.
“From the get-go, we knew that our technology is scalable and that the Thai market is not big enough. That’s why we entered Indonesia in 2013, which accounts for 50 percent of the total Southeast Asian e-commerce value,” the CEO said.
“Besides, Thailand and Indonesia have similar consumer behavior in terms of their preference in electronics and fashion and price sensitivity.”
By Park Ga-young (firstname.lastname@example.org)
This article is the result of collaboration between The Korea Herald and Antara, sponsored by the Korea Press Foundation.