KBank earmarks Bt2 bn in SME loans for e-commerce, focusing on Alibaba

E-commerce now is primarily based on the business-to-consumer model, but the recent entry of Alibaba, a Chinese e-commerce giant, has promised to boost business-to-business (B2B) transactions between enterprises and other merchants, domestically or internationally.

Tawan Thammanichanon, vice president and head of integrated international trade strategy for KBank, said yesterday that the country’s fourth-largest lender by assets had formed a partnership with Alibaba and would make credit available for the first time to B2B e-commerce traders.

Among KBank’s primary targets are SMEs that have been depending on the domestic market but want to go after overseas orders via the e-commerce channel.

The bank will offer an integrated package of financial and non-financial services to assist these traders under a scheme to be formally introduced late next month or early July.

Thanks to the Alibaba’s system that helps verify the identities of buyers and sellers on its website, the bank feels comfortable in opening up credit lines for these merchants, which have had to use overdrafts or promissory notes as trade finance.

The credit will come with more flexible terms – such as no requirement for collateral for certain transactions on Alibaba and up to 180 days to repay – and lower interest rates, said Petcharawut Kueapet, vice president and senior corporate credit products manager. Under the initial Bt2 billion e-commerce loan target, KBank expects to support some 400 SMEs trading mainly on Alibaba’s B2B platform.

The KBank executives were speaking on the sidelines of a seminar on "Going Digital: Effective Solutions to Drive SMEs’ Growth" held by SME Biz Asia.

Thomas Ho, manager of Alibaba Thailand, told The Nation that the company’s mission during the first year hear would be to educate the public about e-commerce and Alibaba’s B2B marketplace through free seminars and workshops.

It would focus on the four industries for which Thailand has a strong reputation – food and beverages, agriculture, beauty products and apparel – as well as some 16,000 active exporters registered with the Commerce Ministry.

Alibaba has about 570,000 registered members in Thailand.

Thailand and other Southeast Asian countries had become very important markets for Alibaba because most international buyers no longer look only for the cheapest products but also consider the quality of the goods they source, he said.

Alibaba will hold a matching event this year to bring in overseas suppliers to meet potential buyers in Thailand, similar to the one it held in Malaysia for the paper and furniture industries.

Burin Kledmanee, chief operating officer of Ready Planet, appointed by Alibaba last month as its local reseller, told the seminar that with the arrival of Alibaba, more than 10 per cent of some 2.7 million SMEs in Thailand had the potential to ship their products to customers overseas. Before this, that was a very difficult task.

The company has 130 staff, with half in sales and half in services and support.