Central's online shopping unit plans Bt1-billion investment over 5 years
COL Plc, an online shopping unit of Central Group, is allocating more than Bt1 billion over the next five years to invest in the development of its business infrastructure as well as acquiring potential local and international firms involved in online bus
The company has set a plan to raise its business contribution from 0.5 per cent of the Central Group’s retail revenue at present to about 10 per cent by 2020.
Central Group reported retail sales of between Bt150 billion and Bt160 billion last year.
Worawut Ounjai, COL’s chief executive, said the company expected to achieve Bt800 million sales this year. The online shopping business has been launched officially since March this year after a one-year period of testing.
"We expect our online shopping revenue to exceed Bt10 billion by 2020," he said.
Worawut said that COL is negotiating with several companies involved in website and logistics developments for possible acquisitions. The deals will be finalised within the third quarter of this year, and will require a Bt500-million investment budget.
"In Thailand and other countries in Southeast Asia, online shopping activity accounts for only 0.5 per cent of total retail sales today. The worldwide average value of online shopping accounts for about 5.6 per cent of total retail sales, with China the highest where online shopping is about 12 per cent of total retail sales in the country," said Worawut.
He said that the online shopping behaviour of Thai consumers has been currently stimulated by promotional activities, especially loss-leading campaigns.
"Since the past seven to eight years, all online shopping players have believed that they need to sell products at a cheap price as the only way to make their online market sites successful. However, I’m doubtful of that policy," said Worawut.
Worawut said that there are currently four to five major players in Thailand’s online shopping market – Lazada, C Discount, Shop@7, and Tesco.
"In the future, we will see some acquisitions and mergers made by major players in the market place. The number of players will be less, but each will be bigger in size," he said.
He said COL is also looking for such mergers and acquisitions, as well as forming joint ventures with potential partners in the online shopping business, both within and beyond Thailand. Such a partnership strategy will allow COL to get many benefits in terms of better penetration into the overseas markets as well as sourcing of products.
Tos Chirathivat, chief executive officer of the Central Group, said the Internet would be the future of the group’s retail business.
The group currently offers about 50,000 product items online, and the portfolio will be increased to 150,000 items by the end of this year.
