Top Japanese firm in bid to push e-commerce in Thailand
Rakuten, the largest e-commerce service provider in Japan, is now putting its focus elsewhere in Asia and aims to help Thai merchants with ecosystem services such as Rakuten Super Points, Rakuten Logistics, Kobo, Wuaki.tv, and Pinterest.Hiroshi Mikitani, Rakuten chairman and chief executive officer, said: "We have many examples of success in Thailand like TV Direct and YR-Request that have earned more than Bt1 million in sales revenue."
Currently about 120 million products are available on Rakuten's platform, from more than 40,000 shops. It also has 70 million buyers with a million orders placed every day.
The Thai market has great potential as the e-commerce market here is growing rapidly, he said.
By 2017, it aims to ensure that 50 per cent of total online merchants at Tarad.com's premium mall - expected to be about 4,000 to 5,000 shops by 2017 - will have Bt1 million in revenue, said Pawoot Pongvitayapanu, managing director of Tarad.com.
"Currently, more than 10 shops of the 1,400 shops at Tarad.com's premium mall already have sales revenue of more than Bt1 million," Pawoot said.
Tarad.com hosts more than 200,000 online merchants, or nearly 10 per cent of total small and medium-sized enterprises in Thailand.
About 300,000 products are available at Tarad.com's premium mall, while the total items at Tarad.com is about 3 million. About 2 million buyers make purchases per month on average.
"E-commerce is not about the number of visitors or traffic but it is about how to turn visitors into buyers and that is our focus. We blend technology with business model, providing education and building human resources, building the role model and working through collaboration," Pawoot said.
He added that Tarad.com, for the next couple of years, would focus on mobile and social commerce, build a better shopping experience, offer more services in Rakuten's ecosystem, and bring SMEs to the Asean Economy Community (AEC).
"We will expand e-commerce service to reach all people, everywhere and any time. We can change Thailand with e-commerce," Pawoot said.
Now, 30 per cent of total traffic at Tarad.com comes from mobile devices, 40 per cent from tablets and 60 per cent from smart phones. About 6 per cent of total online purchasing over Tarad.com comes from online transactions on mobile phones, he said.
"Some e-commerce transactions over mobile phones are worth Bt300,000, which shows the high potential of mobile commerce in Thailand."
He added that e-commerce in Thailand was growing at 20-30 per cent per year. The arrival of e-commerce players from abroad will increase the competition and drive growth of the e-commerce market to above 50 per cent this year.
The e-commerce market is set to witness heated competition as bigger players from abroad enter the fray while offline departments are also expanding their business presence to online.
Tarad.com is a business-to-business-to-consumer set-up. In the past, Tarad.com focused on revenue from adverts. It concentrated on developing the website as a website developer. But now, it is focusing on developing promotions and marketing to help its merchants increase sales revenue.
"We transformed ourselves from an e-commerce platform service provider to an e-commerce transaction-based service provider after joining forces with the largest e-commerce service provider in Japan," Pawoot said.
Currently, e-commerce is in the third stage of the four stages of its evolution: e-classify, e-catalogue, e-commerce, and m-commerce.
About 90 per cent of Thailand's e-commerce transaction value is through bank transfers.
"We optimised the online purchasing process from five steps to three steps to facilitate buyers and to reduce the drop ratio in purchasing."
Rakuten has focused on three main regions - North America, Europe and Asia. "Thailand, Malaysia, Indonesia and Taiwan are in the group of Rakuten as the springboard to the AEC market," said Pawoot.