Page 57 - FoodFocusThailand No.168 March 2020

SEE THROUGH MARKET

transaction (Source: IBEF.org) and other banks are aiming to follow. • As consumers are price sensitive and postal cost in India is
• Price (low) is the main factor for customers to make purchasing considerably expensive comparing to Thailand, Thai enterprises should
decision. rely on the service of local middlemen to reduce cost. Local middlemen
• Prominent online middlemen such as Flipkart, Amazon India, include Flipkart, ShopClues, Paytm, Snapdeal, e-bay, Amazon India,
and Paytm mall, and the less prominent players such as ShopClues, and Great Online Shopping Festival.
Snapdeal, and e-bay (Source: Businessworld, India) are providing • Exporters should exploit the benefit from Thailand-India FTA and
a full service ranging from marketing, payment, and delivery (Source: ASEAN-India FTA to gain advantages in cost and price.
IBEF.org). Alibaba is also planning to enter the Indian market soon. • In order to facilitate potential services such as tourism, MICE/
• Overall, the market share for online trade comes from tourism weddings, and medical tourism, and potential products such as dried
(79% of the total online trade). However, on the product term, it is fruit, home decorations, and fashion goods, a distribution center should
found that mobile and electronic gadgets (63%) are the most be established in big cities to manage import and distribution via online
purchased product via online channel, followed by menswear middlemen like Amazon India and e-bay. Notably, the selling point of
(clothes and shoes, 9%), and electronic appliance (8%). Meanwhile, Thai service in Indian market is the service mind that is more attractive
consumer products and womenswear both account for around 5% than those of Indian businesses. Meanwhile, food products in India
of the market share (Source: Businessworld, India). require long shelf life, which makes Thai dried fruit alluring in the India
market.
Weakness • Even though fashion and menswear account only for 9% of the
• Thai SMEs are inexperienced in international online online market share, a research from Google India Research found that
marketing. Therefore, they should partner with Thai businesses in fashion product sales will rise to USD 35 billion in 2020 as more people,
India to gain some insights. especially younger generation, are turning towards western style
costumes. This provides a great opportunity for Thai fashion brands to
Obstacles target young Indian consumers who are open to new ideas.
• The majority of Indian consumers are price driven, making it • In long term, Thai enterprises may consider establishing their own
necessary to reduce costs in order to compete in the market. online businesses by partnering with local enterprises to distribute goods.
• Price dumping is common in India’s online market. • The Thai government should ask Thai businesses in India to coach
• The competition is intensifying, especially from middlemen Thai SMEs, especially on logistics for online businesses.
who import international brands. • The competition in India’s online market is intensifying due to the
liberalization for international players. At the same time, consumers’
The Strengths of Thai Online Trade response is also high. This is a great opportunity for Thai consumers to
• Thai enterprises are highly experienced because Thailand’s enter the market early while the competition is still low to gain a proper
online market has expanded at the highest pace in ASEAN and is market share.
currently the biggest online market in ASEAN (Source: TPSO Advises
on Penetrating Malaysia’s Online Market, TPSO Journal).
• Thai products and services offer wide varieties, and
many are popular and resonate with the demands of Indian online
buyers such as tourism, fruits, home decorations, and fashion goods.
• Thai products are benefitting from the Thailand-India FTA and
ASEAN-India FTA (Source: DFT).
• Some Thai businesses, CP, Delta, and SCG, for instances,
that have entered India successfully and have accustomed to the
local logistics system to a certain level. They can support the
development of online logistics system for new online businesses
aiming to enter India in the same manner that the Ministry of
Commerce has brought major players and department stores like
Makro, Unilever, and Sahapat, to help SMEs and promote Pracharat
shop network. The approach will strengthen Thai enterprises to
compete in the global market.
Development Strategies
• As of today, online trading is a new direction for the global
trade, with high growth in many countries including India, China,
Thailand, Malaysia, and Indonesia. India’s online market is
particularly interesting because it is the biggest market of its kind,
with the growth of 30% per year. The market does not limit only in
big cities but also in the perimeters following the expansion of
smartphone and internet usage. It is forecast that in 2020, the market
will reach USD 120 billion in value. Moreover, the liberalization to
allow international players to hold full ownership in B2B business
is proving Thai exporters, especially SMEs, a great opportunity to
penetrate the Indian market.
• Entering India online market will also foster the “Taobao Village
Model”. Thailand has been adopting the model to broaden the market
for agricultural products/processed agricultural products/community
products, especially via online channel. Alibaba agreed to support
Thailand on this matter. Also, Alibaba is entering the Indian market
soon.
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