By PHUWIT LIMVIPHUWAT
The application will do away with the “middleman” to reduce costs and increase competitiveness of the traditional grocery stores through e-commerce, according to Commerce Minister Sontirat Sontijirawong.
“Our aim is to strengthen the resilience of traditional grocery stores, helping them grow within the new landscape of the local market,” Sontirat said.
The current problem with traditional grocery stores is that they are mostly small operators who are not able to purchase products in bulk, leading to high costs, which puts them at a disadvantage against modern convenience store chains, such as 7-Eleven, he said.
The new application will allow traditional grocery stores to cut out the “middleman” and purchase products directly from the suppliers without extra cost, says Sontirat.
Giant convenience stores, including 7-Eleven do not offer the cheapest products, but their popularity lies in easy access and presentation. By lowering costs, traditional grocery stores can survive in the market through offering cheaper products to their customers, he explains.
The ministry expects up to 100,000 traditional grocery stores to use the new application by the end of 2018.
The new application will also leverage the growing e-commerce industry in the Thai market to deliver products from suppliers to traditional grocery stores.
When asked about potential competition from international e-commerce or e-logistics companies that have established themselves in Thailand in the past decade, Sontirat said the Commerce Ministry welcomes all private e-commerce or e-logistics companies in the Thai market to develop their own services that address the needs of traditional grocery stores.
The goal of the application is not to make profit from the supply chain, but to introduce this new technological disruptor to support traditional grocery stores that are struggling in the market due to higher competition and rising costs, according to Sontirat.
The new application is part of the ministry’s efforts to launch new policies under the theme of “connectivity”, in line with the theme of the next Asean summit, to be held in Thailand.
The current government is undergoing a structural reform in order to boost support for the country’s agricultural industry, he said.
There needs to be more connectivity in information sharing and cooperation between different ministries.
For instance, the Commerce Ministry and the Bank of Agriculture and Cooperatives will jointly launch a project to promote the products of “Smart Farmers” in the local and global markets, he said without disclosing the launch date of the project.