Thailand Public Relations Association Proposes Strategies to Address the Growing Presence of Chinese E-commerce Platforms in the Thai Online Market
Dr. Phot Jaichansukkit, President of the Thailand Public Relations Association, commented that in recent years, the expansion of Chinese businesses, commonly referred to as "Chinese Capital," has steadily made inroads into Thailand. This situation poses both challenges and opportunities for Thai businesses. While there have been some economic benefits, such as technology transfer and labor promotion, the impact remains limited due to monopolization in many areas. The direct competition by these entrants has also caused significant losses for Thai businesses, particularly among local entrepreneurs. Chinese investments have penetrated industries such as tourism, transportation, real estate, automotive, electronics, food and beverages, clothing, cosmetics, daily necessities, and various consumer goods.
The Growing Presence of Chinese E-commerce in a Booming Thai Online Market
One sector heavily impacted by this influx is the online retail business, which is rapidly growing and deeply interconnected with domestic producers. The arrival of Chinese e-commerce platforms, backed by large-scale manufacturing processes, brings an array of thousands of products with advantages in labor costs, raw materials, production lines, capital, and technology. Combined with strong online marketing efforts, these factors have led to fierce competition that many Thai entrepreneurs cannot avoid.
In Thailand, e-commerce is currently experiencing exponential growth, with more and more Thai consumers embracing online shopping. Temu, a Chinese platform, quietly entered the market during its early stages, following similar launches in Malaysia and the Philippines last year, positioning Thailand as the third ASEAN country in this expansion. Despite the dominance of established players like Shopee, Lazada, and the familiarity of TikTok Shop with Thai consumers, Temu has swiftly gained traction. Its robust logistics system, efficient cross-border sales, and strong customer reviews have bolstered its reputation in the market.
Government's Slow Response to Market Disruptions
Thus far, government efforts have been slow to respond to the growing penetration and its accompanying impacts, particularly in addressing the domination of Thailand’s market. Critical areas needing attention include unfair competition, product standard regulation, tax measures, economic impacts, and both short- and long-term solutions for small and medium-sized Thai businesses. Competing against Chinese companies with vast capital resources has left many Thai firms struggling due to the Chinese firms' ability to scale production quickly and manage costs more effectively.
Addressing unfair price competition is crucial, as Thai consumers are often attracted to low-cost products, even if they compromise on quality. These low-standard products could adversely affect consumers, from product safety and environmental sustainability to broader social and health implications.
Learning from Experiences and Formulating Solutions
As Thai businesses and consumers face a situation with little serious governmental intervention, hampered by outdated regulations, overlapping responsibilities, and a lack of clear accountability, it becomes vital for the public and private sectors to work together. Thailand Public Relations Association proposes the following strategies:
• Building Participation:
- Foster collaboration among business operators, the government, educational institutions, and professional organizations to study and compile the impacts, and devise clear short- and long-term solutions. This information should be swiftly shared with relevant authorities for action.
- Establish broader networks and strong international partnerships to increase collaboration and bargaining power.
- Promote education, knowledge exchange, and access to skills, expertise, funding, and resources for market expansion and business opportunities.
- Disseminate accessible and timely information regarding trends and potential impacts for stakeholders.
• Enhancing Competitive Capabilities:
- The government should prioritize supporting Thai entrepreneurs in enhancing competitiveness through technology and innovation.
- Encourage the development of high-quality products and services, creating both tangible and intangible differentiation to increase value.
- Review marketing strategies to address price wars and competition from more capable rivals.
- Invest in workforce development, particularly in technology and innovation, to meet international demands.
• Marketing, Branding, and Communication:
- Review and enhance the country's marketing strategies, especially in developing online markets to promote Thai products abroad. This includes revisiting target customer groups and devising efficient ways to reach them.
- Strengthen branding and market communication by emphasizing Thailand's unique identity and aligning with global trends, ensuring marketing communications resonate with current and future consumer lifestyles.
Thailand Public Relations Association views the current situation as a response to the fierce and intense competition in the global market, including from China. It is believed that, in the near future, Thailand will also face competition from several other countries with lower costs and strong potential that are seeking business opportunities. It is essential for all sectors in Thailand to work together to prepare for and adapt to these challenges, seizing opportunities in future competition.
