E-commerce penetration in the retail sector could triple in the next few years as the pandemic pushes brands to go online and cross-border sales increase, says JD Central, an e-commerce joint venture between Central Group and Chinese internet giant JD.com.
“Thailand’s online retail market accounted for 8% of total retail sales in 2020, which means there is still room to grow. The online retail market in China contributes 27% of total sales,” said Vincent Yang, chief executive of JD Central.
Thailand has 48 million shoppers online, up from 28 million virtual shoppers in 2017 — a compound average growth rate of 20%.
“The local online retail market can double or even triple in the next few years as brands move towards digital with an increase in customer touchpoints,” said Mr Yang.
The pandemic has affected Thailand’s GDP and consumer confidence at a scale similar to past major financial crises, however, e-commerce is likely to be an industry that will thrive.
Sales on JD Central surged 169% year-on-year in 2020 and purchasing amount per bill grew 25%.
The company saw an average of 2,198 baht spent per order while the repurchase rate aongst users was around 67%.
Top revenue-driving product categories were electronics and fast-moving consumer goods.
Mr Yang said that during this economic downturn, shopping for “everything” online is becoming part of the new normal.
Thai consumers are buying more daily use and essentials products online, he said, adding that despite the smaller size per order, purchase frequency is increasing.
Mr Yang said JD Central’s success lies in its focus on “e-commerce fundamentals — products, prices and services”.
Over the past few years, JD Central has invested in building infrastructure to support partners’ growth while others have concentrated on marketing campaigns to increase traffic, he said.
The company offers a one-stop solution in retail, marketing, solutions and fulfilment tasks to support various business types.
The company also provides marketing solutions and tools to help brands and sellers boost their market share and grow sales, which in turn improves JD Central’s revenue.
Thailand’s ecommerce market in the future will move towards borderless retail — a major advancement that has already been seen in China, Mr Yang said.
Borderless retail and online-to-offline mode will enable customers to buy “whatever, whenever and wherever they want either through online or offline”, he said.
Consumers will be exposed to products or services they have not yet experienced or those they never thought they needed before.
Korlarp Suwacharangkul, new chief marketing of JD Central, said the company has rolled out a new benchmark (QPS) that would ensure quality of sellers’ products and services to enhance customer experience.
One future e-commerce feature is sharing commerce in which buyers who are interested in the same products buy items in bulk, leading to discounts, he said.