Alibaba durian deal dismissed as ‘hype’, observers ponder impact
THE HYPE over Chinese e-commerce giant Alibaba’s Bt11-billion investment in Thailand, announced last Thursday, and its huge Tmall online platform has only masked the country’s fundamental weaknesses in embracing the digital technology for economic and social benefits, according to experts.
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Even though there were as many as 60,000 online orders for Thai durians in one day on Tmall, which covers the huge Chinese market of 1.4 billion consumers, on April 19 when the investment announcement was made, critics said it was unclear whether Thai durian growers and other farmers would gain from Alibaba’s bigger presence in Thailand.
Chotichai Bua-dit, president of the Rayong fruit orchard operators’ club, said it was good news that Thai durian growers had received many advance orders due to the advent of Alibiba, which already owns Lazada, the No 1 e-commerce site in Thailand. However, he is not sure whether durian and other farm prices will be depressed by these giant online platforms in the future due to their monopolistic power.
Suwit Saeng-arkard, the leader of another Rayong durian growers’ group, said Thai durian growers should benefit from Alibaba’s bigger presence as they will have more opportunities to sell their output, especially via online platforms.
Pramote Ruamsuk, adviser of the Eastern Provinces’ Chamber of Commerce, said he is not sure whether Thai farmers would gain more from Alibaba since there have been many Chinese businessmen setting up operations in Thailand to buy durians directly from farmers for online sales.
Somchai Ngamvannagul, a durian grower, said the wholesale price of Monthong durians had risen to Bt100 per kilogram from Bt70 earlier this month, but the supply is expected to be less than last year’s, so prices will probably be strong.
On Alibaba’s presence in Thailand, he said any benefits in the short term should be minimal for Thai durian growers due to this year’s expected lower supply.
Dr Nipon Poapongsakorn, a distinguished fellow at Thailand Development Research Institute (TDRI) and expert on the agriculture sector, said e-commerce platforms in general were good for Thai farmers since there are no middlemen to take profits.
Regarding Alibaba’s bigger presence in Thailand, he said that Alibaba’s Tmall online marketplace has a solid reputation in protecting the interests of buyers, since it will not pay the sellers if their products are not satisfactory. However, he said Thailand is not well-prepared to take advantage of online platforms and other features of the digital economy due to the shortage of qualified personnel and lack of inter-ministerial policy coordination.
For example, there is a shortage of people with skills in big data, analytics, artificial intelligence and other areas crucial to develop the digital economy.
In the case of Alibaba he said the Chinese e-commerce giant was not only selling products and services online, but it also provided loans on the digital platform using the massive data generated by millions of online transactions between buyers and sellers.
Nipon said the country had not been able to produce enough graduates with skills in digital and related fields to serve the massive investment projects in the Eastern Economic Corridor. He said the government should work more closely with universities and research institutes to support its Thailand 4.0 initiative.