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A solution for Thai small businesses in the digitised world

Apr 10. 2019
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ONE OF THE key challenges faced by entrepreneurs-to-be is operating a business in the era of disruptive technology. For example, one of the most disruptive technologies in the retail/wholesale trading business is that of e-commerce.

The value of e-commerce has grown from approximately around Bt2 trillion in 2014 to over Bt3.2 trillion in 2018. It is undeniable that some SMEs will be beneficiaries of such disruption, while others will not.

Why should we focus on SMEs?

SMEs account for 99 per cent of the number of businesses in Thailand, and are dominated by those with sales revenues of around Bt1 million to Bt10 million, the small SMEs. Most are trading businesses distributed across the country. However, small SMEs these days lack in identifying, understanding and speaking to their target customers. They struggle to keep pace with the patterns of customers, who purchasing goods through both bricks-and-mortar stores and online. It is not surprising that less than half of SMEs were still surviving a year after being established, according to the Office of SMEs Promotion.

How, then, can SMEs thrive in this age of constant technological disruption? The key answer does not lie with adopting the e-commerce trend and giving up all the traditional ways of trading. Instead, the businesses should focus on “understanding their customers’ journey and behaviour”.

For example, according to SAP and BCG, the well-established global consulting firms, for perishable grocery items as well as furniture, customers still prefer shopping at a bricks-and-mortar store so that they can physically view the product, check its quality as they cannot be assured simply by product brand, and immediately retrieve the goods. Customers seeking fashion products (clothing, and shoes) in contrast, prefer a mixture of both offline and online channels (i.e., “clicks-and-mortar”) to try out the product before committing to a purchase. Lastly, customers seeking sports equipment, cosmetics and bathroom products prefer purchasing via online channels because of the products’ standardised quality.

Business strategies should be adjusted accordingly.

Businesses, whose customers favour shopping at bricks-and-mortar stores could, for example, improve the customer experience simply by rearranging the products to accommodate their customers’ product search. By doing this, businesses could also increase their chances of cross-selling the related products. The more advanced strategy would be to adopt available technologies to build engagement and collect customers’ data through targeted promotion and campaign.

This could be quite different from serving customers who prefer “clicks-and-mortar” shopping.

For example, the ETDA and SAP surveys revealed that the problem is not that people do not shop for clothing online, because 73 per cent of customers have indeed previously shopped online. The problem is that 25 per cent of them left the products in the shopping cart and cancelled their orders. After correctly identifying the problem, businesses can more deeply investigate customers’ pain. They might just offer customers a free-return policy. Or they could opt for more advanced solutions like augmented reality and virtual reality to minimise the problem of non-standard sizing in clothing and shoes in order to enhance the online success rate. By doing this, the businesses could limit the physical stores’ maintenance costs by reallocating stores to where their customers are.

Finally, online shoppers will focus on the ease of exchanging or getting a refund on products exchange as well as product comparison tools. Thais are generally price sensitive and can be influenced by promotion. Illustrating the total price, including the transportation fee and VAT, during product selection would improve the transaction success rate. 

As well, businesses should thoroughly utilise customer data to help provide better-personalised experiences. Customer tastes and preferences, previous purchases, and demographic information could be used to customise the in-store experience and online offerings.

For example, businesses can adopt tools provided by Facebook to help rationalise their marketing budget through the ad placement and ad budget and schedule features. Business can choose where to advertise and set up the timing and budget for an advertising campaign. Another useful tool is Google Search. Business can also select search engine optimisation or search engine marketing features to more effectively reach target customers. All the information behind these platforms will provide valuable insights for a more effective business sales strategy.

In summary, whether businesses are conducted through bricks-and-mortar, clicks-and-mortar, or clicks-and-clicks stores, empathising with customers in all aspects – their journey, behaviour, needs and pain points – is the key to business success in this era featuring an increasingly digitised world combined with intensified price competition. Views expressed in this article are those of the author and not necessarily of TMB Bank or its executives. 

Contributed by WIRUNPON ROCHANAVIBHATAVANICH, business development department at TMB Analytics. She can be reached at


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