Ecommerce in Thailand: 4 Key Players
Here’s how these ecommerce companies are shifting Thailand’s online shopping ecosystem.
By Alvin Mak
With a population of almost 70 million people, Thailand’s retail industry is undoubtedly key to much of its population’s shopping needs.
However, with the continued popularity of online shopping and companies such as Amazon, Thailand is looking to further tap into its $26.2 billion ecommerce market. Its growth so far has seen staggering numbers; the industry expanded by 49% in 2016 and 27% in 2017.
Yet, its face-to-face retail industry still dominates, towering over the ecommerce market, which makes up a mere 0.8% of market share. Thailand’s startups are thus keen on capitalizing on this and increasing the proportion of Thai online shoppers from its current 21.7%.
Here are four of Thailand’s key ecommerce players that could be signs of good things to come.
Thailand and Southeast Asia’s one stop shop for ecommerce logistics and management is aCommerce.
Launched in May 2013, the company dedicates itself to helping online retailers reach their desired markets with its shipping and courier services. Marketing, consulting, customer relations, warehousing, and delivery services are just a few of the services on the large list of “end-to-end” solutions provided to ecommerce brands.
The startup’s reliable reputation precedes it. aCommerce has collaborated with over 200 brand clients including big name companies such as Adidas, Unilever, L’Oreal, Microsoft, and Uniqlo. Thus, it shouldn’t come as too much of a surprise that aCommerce has achieved an annual growth rate of 188% since 2017. Manned by 1,400 staff in multiple locations, aCommerce has taken significant steps toward dominating the Southeast Asian ecommerce logistics space.
Over its 7-year lifetime, the company received $10.7 million in its Series A funding round led by Inspire Ventures, in addition to a $65 million Series B led by Emerald Media. It recently received an additional $15 million in funding from Indies Capital Partners.
This infusion of capital from earlier this year is fuelling aCommerce’s transition into its “2.0 strategy”–an initiative designed to push aCommerce toward cashflow positivity and group profitability in 2020.
It’s planning to take its ecommerce logistics successes further by shooting for an IPO in a few years.
Founded in 2012, Lazada is, without a shadow of a doubt, Thailand’s leader in online shopping. Its presence in six other Southeast Asian countries also makes it the alpha of the region. The unicorn is evolving to be an active competitor for Bezos’ Amazon and China’s JD.com.
Lazada consolidates 18,000 international and local brands and brings them onto its online marketplace, making it the e-market in Thailand with the largest selection of sellers.
The company has enjoyed a staggering nine rounds of funding, through which it has raised $4.2 billion dollars. Its most recent investment came from Taobao parent company Alibaba in 2016. Lazada received a whopping $2 billion from the Chinese Internet conglomerate, making it the new regional flagship ecommerce service of Alibaba.
This entitled Lazada to access Alibaba’s extensive ecommerce logistics infrastructure. As a result, products on Lazada’s LazMall platform are eligible for next day deliveries on domestic purchases and 7-day cross-border deliveries in Southeast Asia.
Lazada’s overseas expansion will also look to employ Alibaba’s extensive cloud service infrastructure to facilitate the spread of secure payment services.
Alibaba’s hefty cash infusion and partnership with Lazada is clear evidence of its continued faith in Lazada’s legitimacy as a powerful challenger in the region.
Based in Bangkok, Pomelo is a fashion ecommerce platform shifting Thailand’s approach to affordable online fashion. Launched in 2013, the store has been dedicating itself to offering a wide range of clothing ever since. According to its website, “Pomelo’s style range spans the realms of beachwear to sportswear, and everything in between.”
Pomelo is a mobile-heavy service, with 85% of transactions processed through mobile devices. The company also emphasizes logistical convenience, offering free delivery on orders worth over 990THB. It’s product offering has seen customer demand from over 50 countries.
One thing putting Pomelo above conventional online clothing stores is its innovative network of “fitting rooms.” These fitting rooms are spaces in the offices of Pomelo’s partners, and include co-working spaces, cafés, and gyms.
According to Pomelo Co-founder David Jou, the startup would not be the “trailblazer in omnichannel fashion” it is today without these “fitting rooms”.
Addressing one of the key sticking points in ecommerce, Pomelo has pioneered a different way to try on ecommerce-purchased clothing by letting customers pick up their orders at partner fitting rooms. Customers are able to reorder their clothes at the pick-up outlets if the fit isn’t right, only paying for what they take home.
Pomelo secured a Series C funding round in 2019. The capital infusion, worth $52 million, will be used to expand Pomelo’s physical stores to more Southeast Asian cities such as Kuala Lumpur, Hong Kong, and Ho Chi Minh. The company also has ambitions to expand its fleet of 50 fitting rooms to 300.
Powerbuy first started as an electronics department store Thailand, but has now expanded to over 90 branches across the country. More importantly, it has ventured into ecommerce with an added online store. The online store consolidates over 200 brands to deliver a wide range of options to its customers, offering more than 20,000 different products.
This startup’s online business model is similar to Pomelo’s. It employs an omnichannel B2C supply chain, integrating its online and offline services. As a result, Powerbuy’s online customers need only wait one hour when using “Click & Collect”—a delivery option where online-purchased products are collected in-person at Powerbuy’s outlets.
Powerbuy had also recently partnered with Rajamangala University of Technology Lanna to provide solar power to Ler Kra village, Om Koi, Chieng Mai, demonstrating its dedication to further push the penetration of electronics and technology into the more rural regions of Thailand.
Thailand’s retail landscape is evidently experiencing a long-overdue transformation toward ecommerce. The infrastructure and demand are clearly there, and with the assistance of tech giants such as Alibaba, hopefully Thailand’s best ecommerce platforms will soon reach further beyond their humble beginnings.