SMEs must rise to their potential, prepare to compete in Asean, BNI says
August 25, 2014 01:00
By Erich Parpart
Business Network International (Thailand) says small and medium-sized enterprises in the Kingdom have high potential and are able to compete on a regional level but their lack of connections and knowledge on other markets in the region was hampering futur
Kollakit Thalerngnawachart, national director and founder of BNI Thailand, said Thai SME operators do not have the mindset and vision of large businesses that have systems and connections that allow them to expand. Therefore the government has a duty to provide SMEs with incentives and knowledge on nearby markets to encourage them to compete within the region.
BNI is the world’s largest referral organisation with a presence in 55 countries. There are more than 700 members in Thailand.
“The first and foremost thing is to open their vision and encourage Thai SMEs to expand to other countries, since they do not have the mindset to go out [of Thailand] and because they do not know what and who is out there, they don’t know the markets,” he said.
“They have to dare to be out there, dare to dream, and know that their product has quality and is unique enough to be able to compete with firms in another country.”
Kollakit said the lack of skill sets also hampered SMEs’ ability to expand to other countries as many of them use family members as employees, and the operators do not see the need to upgrade the skills of their workforce. This shows a lack of vision and knowledge of how the AEC could grow their businesses.
He added that rising labour and production costs meant that SMEs should use technology to lower the costs of running their businesses, such as using the Internet or e-commerce, but government regulations regarding business operation do not facilitate such changes.
For example, accounting regulations do not allow the use of online statements, since government agencies such as Customs do not accept electronic receipts from operators. This means SMEs still have to hire someone to manage these receipts by hand. Meanwhile, commercial banks’ regulations regarding the opening of an online bank account are also strict, which means that the use of technology to lower costs and operation time is more difficult than it should be.
“Malaysia is now encouraging operators to manage their businesses online, while Singapore is in a whole new league regarding the use of e-receipts and online transactions for e-commerce,” he said.
Besides changing their mindsets ahead of the AEC, SMEs in Thailand should also concentrate on adding value, making their brands known, and creating a story for their products to make their goods more distinctive to the eyes of AEC customers. They could learning from Japanese operators who have taken the time to promote the story of their products and research the cultures and needs of foreign markets besides the local market that they have already familiarised themselves with.