MANY HEADS of big shopping malls in Thailand are still not convinced about online retailing or its future, said experts at global financial services group KPMG.
“The CEOs I met in Bangkok may not be ready to take on the digital challenges as more shoppers make purchases via phones and tech devices,” said the group’s online expert Anson Bailey.
Thailand should pay attention to countries such as China, where online has revolutionised shopping, said Baily who is based in Hong Kong.
About 14 per cent of shopping in mainland China is online because of acute shortage of stores in a country that only recently emerged from a century of warlords and Communist revolt.
In other Asian lands that were spared wars, there are ample number of malls, making online sales less spectacular. Thais made about 11 million online purchases a year – about 4 per cent of the total market.
But the trend is up, Bailey said, as traditional shoppers grow old and die, leaving the field to younger consumers who are more prone to dial for goods and services.
“Many CEOs seem complacent and unaware about how younger consumers use smartphones,” said the Manchester-born marketer who has lived in Asia for 20 years.
He cited KPMG’s latest survey by consumer chief Willy Kruh that warns of the need to adopt new technologies in a fast-changing landscape.
To be sure, of the total US$22 trillion (Bt760 trillion) consumer market, online takes up about 8 per cent of the share.
But the growth is faster in digital, Bailey said, after meeting young online entrepreneurs from Asia this week. They are aggressively pushing to have a piece of the world’s digital retail space worth $1.8 trillion.
Bailey uses China as a role model for success, citing the success of Alibaba and Alipay under the guidance of founder Jack Ma. “Ma succeeded because he made online shopping simple, quick and transparent”.
Recent studies suggested Asia could make up more than half the world’s total online purchases by 2030.
Bailey conceded that not all Asian markets are embracing online with the same zeal as China. Online retailing in Japan, for example, accounts for just 5 per cent of market share.
It also remains hard to convince local retailers that Siam Paragon, MBK, Emporium-and Emquartier will be replaced by digital shops anytime soon.
KPMG acknowledges this reality and offered a more pragmatic solution where the new and old systems tie up to survive.
The biggest concern among consumers, said Kruh’s survey, is security where cyber hackers have made off with billions of dollars every year.
Kruh noted 63 per cent of respondents said “protecting their data and information was most important”.
Consumers are not only worried about fraud but what bankers, insurers and retailers do with their personal information.
Bailey said many companies such as Alibaba are now following Google’s example by calling itself a “data company” with the ability to unlock users consumption pattern.
These players assume consumers are happy to be exploited with impunity. The issue may have legal implications and affects issue matters such as trust and privacy.
Indeed, the greater challenge may be to reconcile the new divide between the “haves and have-nots”. For a huge segment of the world’s population, the digital platform is beyond their means.
Bailey is convinced that as “Baby Boomers” aged between 52 and 69 die off, there will only be two remaining groups that will boost online sales.
These are “Generation X”, aged between 36 and 51 and “Millennials”, aged 20-37.
“These people love Uber and AirB&B,” he said. “They grew up with them.”
That may be so but Thailand has made both illegal and for every fan of these services, there are many more opponents.