Wider use of smart devices, integrated social media marketing build
January 21, 2014 00:00 By Asina Pornwasin
Mobile commerce is now the key focus of e-commerce and online shopping providers because of the wide adoption of smart devices - both smart phones and tablets - and integrated social-media marketing.
Pawoot Pongvitayapanu, president of Thai E-Commerce Association and founder and managing director of Rakuten Tarad.com, said that this year his company would focus on mobile marketing, using the LINE marketing platform.
Mobile marketing drives traffic to mobile commerce, he said, pointing out that previously around 25 per cent of the firm’s e-commerce transactions came from mobile, but after launching Japan-based LINE’s platform, mobile transactions had risen to between 30 and 40 per cent.
“We got 3.2 million followers on LINE within the first 24 hours of launching the official account. LINE is the best way to bring people to our mobile commerce,” said Pawoot.
Rakuten Tarad.com this year also plans to rebrand, engage in more promotion and expand into a global platform, in order to conduct e-commerce worldwide in the next few years, he added.
Tarad.com is an online market place, while Rakuten Tarad.com is the premium online mall market, which is moving to the global platform and now has some 2,900 merchants.
Rakuten Tarad.com has 2.5 million members, while around 3.5 million people visit the website, he said, adding that transactions have been growing by between 30 and 40 per cent per annum.
“Around 300 product items were sold out within less than half an hour after launching a promotion on LINE. Once people saw the promotion on LINE and then clicked on the link, they were directed to our mobile-commerce channel,” said Pawoot.
Apart from LINE, the company also engages in e-mail marketing under a responsive-marketing campaign display to fit any size of screen on mobile devices.
“This year, we are still focused on the domestic market, to help Thai merchants to understand how to optimise benefit from our e-commerce platform and marketing platform. Once they understand this well, we will be ready to go abroad together,” said Pawoot.
Rakuten Tarad.com aims to have around 3 million members by year-end, and hopes to reach 7 million people thanks to the LINE platform. This year will see what he termed “segmented e-commerce”, which is niche e-commerce.
More e-commerce players from overseas will jump in, while there will be start-ups geared to e-commerce and mobile commerce, and department stores and other retailers will expand into the online shopping platform.
All these developments will vigorously drive e-commerce and m-commerce during the year, he added.
Overall, the e-commerce market in Thailand this year is expected to grow by 30 per cent, with the main drivers being the Internet and mobile Internet penetration, which is supported by the availability of 3G networks and wider adoption of mobile devices.
“The challenge for e-commerce business this year is how to convince people to make online payments and how to reach customers throughout the country. There are huge opportunities out there. E-commerce will help bridge the gap between people in the cities and in rural areas to purchase products that might be not available in their areas,” said the company founder.
Meanwhile, Benjamin Thompson, vice president and head of marketing at Singapore-based Zalora, the online fashion website, said the company’s direction in Thailand this year is to continue to focus on Internet and mobile commerce, with a goal of growing revenue by 15 per cent month by month.
“It is the same growth we achieved last year, which was a very good year for us, as we grew by an average of 15 per cent every month. Now, our target customers nationwide are men and women aged 20 to 35. We have about 15,000 options on the website, which we plan to expand to 25,000 this year,” he said.
The executive said the Thai online shopping market is expected to grow to between 11 and 12 per cent of the total retail market by 2020. Factors contributing to this expansion are the rise in Internet penetration, upcountry growth and the rise in smart-phone penetration.
Varied payment options
However, the huge challenge for e-commerce business in Thailand is people’s fear of using credit cards for online payment. Zalora therefore offers the option of cash payment on delivery, he said.
“Another challenge is the fear of [receiving clothing of the] wrong size, so we also offer 30 days’ free return and full refund – no questioned asked. The last challenge is the inconvenience of waiting for delivery, so we offer a service for customers to pick up at 7-Eleven,” said Thompson.
Despite the growth forecast for the next seven years, right now the online shopping market is less than 1 per cent of the Thai retail market, but this is expected to grow rapidly, he said.
In his view, the main factors driving e-commerce and m-commerce in the Kingdom this year are changes in consumer behaviour, the rising number of smart phones and tablets, and the number of online payment services.
M-commerce will increase over the course of the year, he said, adding that
traffic and revenue from mobile accounts for 20 to 30 per cent of all of Zalora’s Thai revenue. Smart-phone penetration in Thailand is one of the highest in the region, growing more than 40 per cent last year.
“For online payment, trust is growing in Thailand as the market starts to learn that it is actually very secure,” said Thompson.
As to what sets Zalora apart from its competitors, he cited the company’s various payment methods, namely, credit card, PayPal and cash on delivery; its return and exchange service, whereby if the item is the wrong size, it will exchange at the door for free; and the 7-Eleven pick-up service.
“We deliver in Bangkok within one to two days, and to the rest of Thailand in around two to three days,” he said.
Ovum, the global technology analyst and consultancy services firm, also expects a continuing uptake in mobile payment for online shopping.
Tablets to lead the way
According to the company’s forthcoming “2014 Trends to Watch” report, there will be increasing complexity within the mobile payments ecosystem this year, and ongoing challenges around the business model for digital-wallet services.
Revenue growth for mobile payments will grow in emerging markets this year, making for stronger growth among unbanked users.
There will be a sharp rise in tablet-based mobile commerce during 2014, and beyond, it said.
Consumer adoption of tablets is growing quickly, and their large screen size and enhanced graphics mean that they are better suited than smart phones to displaying and appreciating visual merchandise.
As prefigured in the “Ovum IAB” survey of US brands, 2014 will also see more advertising spend on tablets, with 75 per cent of respondents saying that they expect to see their use of tablets increase during this year and next.
Amazon’s big ambitions for mobile, and its reported acquisition of GoPago’s mPOS technology, mean it will finish the year with a wider and deeper portfolio of m-payment services.
Ovum’s Consumer Practice’s principal analyst, Eden Zoller, said the key trend for this year would be rationalisation and consolidation in the digital-wallet space.