The big fish of online trade are circling

opinion September 23, 2017 01:00

By The Nation

Central Group’s adoption of e-commerce brings the scenario in Thailand to a crucial juncture

Online retail business seems set to register dramatic growth in Thailand now that Central Group has embraced the strategy of selling products via the Internet. Due to several factors, the burgeoning global trend has blown hot and cold in Thailand, but it now appears ready to gain a solid footing. As with all changes, some will celebrate while others will grumble.

The biggest boon to online sales is the way they empower makers of low-cost yet innovative products. In the past, small-scale manufacturers and distributors of lovely women’s handbags, for example, had no chance of competing with the big brands’ vast connections and financial might. Now there are opportunities springing up.

Central Group’s announcement that online sales will be a “major” strategy will be seen as both good news and bad news. Its significant joint venture with a Chinese industry giant follows the path the global economy is taking. Computers and phone screens serve as storefronts more frequently than ever. Delivery and distribution will play a larger role in all trade, increasing the number of jobs in fields that until recently looked like dead ends.

With fewer walk-in customers and more fingertip shoppers, businesses are rethinking their positions. Niche products made by people of limited means and traditionally difficult to market now stand a better chance. Product makers will have greater bargaining power in the retail hierarchy. A good location used to be the essential ingredient. Online stores are everywhere – at the same time and all the time.

But Central Group’s move also signifies the status quo striving to cling to its superior position in the market. The notion flies in the face of idealistic views that online trade leads to greater sharing of economic wealth. Amazon is spreading its wings. Jack Ma’s Alibaba Group has become increasingly influential online. Central Group joining the fray reinforces the perception that all of the big fish are now circling the bait. On one hand, their involvement in the hunt will accelerate growth in online trade. On the other hand, there’s a risk of monopolies forming that could choke off expectations of equity and fairness.

The big fish were once small fish too, of course, and no one is decrying their successful growth. But everyone now faces the challenge of making sure the future sees many more successful entrepreneurs, and not a condensation of wealth and retail power among just a few corporations and individuals.

There are two key reasons behind the boom in Thai online trade. The first is the massive popularity here of Facebook, Instagram and Line, which allow for staggering volumes of peer influence. Put a product on the social networks, sales rise as friends tell friends, word spreads like wildfire, and you’ve got a winner on your hands.

The second reason is the vastly improved security in Internet banking and payments. It was known from the start that consumers had to be fully convinced the money spent online wouldn’t vanish into the pixels, but only in the last couple of years has the buying public gained that confidence.

Everyone is now closely linked together. Crucially for e-commerce, it becomes our collective responsibility to prevent cheats from bringing down the whole system and monopolies from gaining too much control.