Interview: Yol Phokasub
Will Thailand’s shift towards e-commerce and e-payment systems affect consumer spending?
YOL PHOKASUB: While economic and consumer spending in Thailand have been somewhat lacklustre in recent years, some growth has been seen. Also, despite robust expansion in recent years, the e-commerce consumer market remains relatively modest compared to the overall market, hindered by relatively slow overall consumer uptake, inadequate logistics and a limited range of products and suppliers.
The current situation is poised to change rapidly in coming years as the government spearheads its Thailand 4.0 policies. These polices will attract incumbent and new players to invest heavily in robust new platforms, sophisticated logistics and attractive promotions to entice greater domestic customer uptake. These investments will push consumer spending upwards. Of note is the relatively low e-commerce positioning, which contrasts with the ready adoption in Thailand of social networking platforms – indicating substantial customer appetite in the years ahead.
The e-payment space is much better positioned. Arising from a substantial industry-wide effort under the government-initiated Prompt Pay scheme, all payment modalities are expected to shift to e-payments – C2C, B2B and B2C. The government’s goal is to dramatically reduce physical cash usage in Thailand’s economy and move rapidly towards a cashless society. That being said, this move is unlikely to increase consumer spending in the short term. Instead, it is likely to make payments much more efficient and seamless.
How are Thai brands capitalising on the high rates of economic growth in ASEAN countries?
YOL: For historical and cultural reasons Thai brands have mainly focused on opportunities in Cambodia, Laos, Myanmar and Vietnam rather than ASEAN as a whole. Unfortunately, except for Vietnam, the risk-return dynamics remain very challenging in these markets, and the scale of investment has yet to be meaningful for any of the major brands. Clearly when these dynamics improve Thai brands are positioned to be major players. With respect to Vietnam, many of the Thai brands already in the market have made solid inroads and will probably substantially enhance the level of investment in the medium term. As the Vietnamese economy moves up the economic development curve more opportunities for growth will be available to both foreign and local players.
What steps are being taken to further stimulate the country’s growing tourism sector?
YOL: Tourism now is a major growth driver for the Thai economy, contributing close to 10% of the kingdom’s GDP – much more if the indirect impact of tourism is taken into account. The target for 2017 is to increase revenue by 10%, with the aim of capturing of BT950bn ($26.8bn) from domestic visitors and a staggering BT1.9trn ($53.5bn) from international visitors. The thrust of this government’s initiatives is to promote the unique appeal of Thailand as a holiday and meetings, incentives, conferences and events destination, through highlighting its topography and culture, historic sites, and shopping, beaches and vibrant cities, the hospitality of its people and the world-famous Thai cuisine.
Under the umbrella of the Tourism Authority of Thailand, a number of policies are in place: schemes for improving the tourism infrastructure, particularly airports; plans for the rapid growth of the hospitality sector, including accommodation to suit all budgets; launch of global campaigns to attain top-of-mind awareness for Thailand; and promotions to attract domestic and foreign shoppers. These policies are developed and implemented in consultation with the private sector and multiple government agencies. In addition, financial stimulus has been provided from time to time to encourage more domestic tourism.
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