78
JUN 2017
FOOD FOCUS THAILAND
SEE THROUGH
MARKET
Since E-Commerce responds well to new generation lifestyles, this
businessmodelhasbeengrowingrapidly.E-Commerceoffersconvenience
in shopping, payment and delivery, and sometimes lower prices than
goodsboughtatphysicalshops.Theentryof largeE-Commerceoperators,
Thai and transnational, into the E-Marketplace has hastened greater
confidence towardshoppingonlinewhilealsoattractingmanufacturers to
try out this new distribution system.
BuoyedbyE-Commerce
SMEs, inparticular,havebecome interested inonline tradebecause
they are now recognizing its advantages in swift and wide-ranging
customeraccess, reducedcostsversusphysical shops,aswell as fewer
hired staff, plus 24-hours/day trade capability. The sheer volume of
E-Commerceoperators is largeandhas continued to increase; product
availability online has surged in many categories enhancing choices,
thusallowingbuyers tobettercompareandchoosewhatbestsuits them.
Thisnewparadigmcouldbeanopportunity forpackagingbusinesses
to advance over traditional retail and wholesale B2B commerce – i.e.,
primary
1
and secondary packaging
2
– towardB2C shipment packaging
also referred to as tertiary packaging
3
, e.g., paper cartons, postal
packagingandplasticbags that arenow lookingveryupbeat.Suchnew
products cater to the many SMEs E-Commerce operators now, for
example, OTOP firms here that are using online channels to distribute
their goods.
KResearch’s preliminary estimate the market value of B2C
E-Commerce excluding trade in services for 2017 is about THB 210
billion.Themost common itemsarecosmetics, nutritional supplements,
food and beverages, lifestyle/fashion goods (clothes and accessories,
footwear, gems and jewelry), aswell as ITproducts. These goods take
up the largest share of shipment packaging, perhaps 350-400 million
pieces per year, thus sales of B2C E-Commerce shipment packaging
will likely reachTHB 5.6billion in2017.
Over thenext threeyears, themarket turnover forB2CE-Commerce
shipment packaging is expected to reach THB 8-9 billion p.a., buoyed
byB2C retail E-Commerce thatmaysurge toTHB350billion (assuming
that theupcomingE-Commerce taxwill not create toohighaburdenon
business).Paperandplasticpackagingwill gainconsiderably, too, since
this responds well to needs in the packaging of goods sold online,
protecting them adequatelywhilealso low in cost.
Responsiveness toE-CommerceBuyers…
AChallenge for PackagingBusinesses
E-Commerceplatformsoffermanyopportunities forshipmentpackaging
business, given that theyarenow inanuptrend, but challengesarealso
2017Salesof
present.E-Commerce isa largebusinesssegmentwithmanyoperators
–530,000
4
currently – that are still growingwith thepopularity of online
shopping. Sincemost suchbusinesses areSMEs, theproducts offered
arediverseandall requireefficientpackaging thatsuitsparticularproduct
needs.
E-Commerce shipment packaging may be classified into two
categories:
1. Standard (Generic) Finished Packaging:
These products are
standard forms facilitating freightshipmentbutgenerally lackanyspecial
designs or logos, and are sold at reasonable unit prices. This product
type is suited to businesses havingmodest sales volumes.
2. Customized Packaging:
These products are made to users’
specifications tomatch theirgoods.Theyarealso intended toemphasize
the outstanding features of the products and add value to them, e.g.,
cosmetics and jewelry. Moreover, they must enhance quick shipment,
prevent damage and help promote the product image. Therefore, such
packaging ismore expensive than generic packaging.
BusinessOpportunities for E-Commerce
ShippingPackaging
• ThePackagingMarket:
Looking intoE-Commerce, it isseen that
thismarket ismostly driven by a great manySMEs, especially those in
the provinces. More and more OTOP producers are now selling their
merchandise online, in addition to sales at physical shops. This trend
presents promising opportunities for packaging businesses; the SMEs
E-Commerceshipmentpackagingshareof thepackagingmarket isabout
60-70% of the total, equal to about THB 3.8 billion, while large
E-Commerceoperators takeuponly30-40%at perhapsTHB1.8billion.
At present, large packaging providers dominate the market for
E-Commerce shipment packaging, producinggenericproducts that are
inexpensive and highly popular. SMEs packaging producers should try
to partner with local SMEs or sell their wares via social media. Close
coordination with their customers is needed since packaging must be
tailor-made toaproduct to add value to themerchandise.
