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Shared logistics could take SMEs global

May 16. 2019
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By The Nation

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South Korea is creating a path to e-commerce riches, and Thailand should follow

Thailand could take a few lessons from South Korea on how to make further inroads into the global e-commerce market. The Seoul government aims to incubate as many as 15,000 e-commerce exporters over the next three years. Multiple South Korean government agencies have joined forces to drive the global 

e-commerce offensive with a focus on small and medium-sized enterprises (SMEs) that have the potential to tap online commerce on a global scale.

South Korea will lay down a new infrastructure to drive the growth of these exported-oriented SMEs, which are already thriving on the popularity of K-pop in foreign markets, extending beyond music to beauty and fashion products, stationary and much more. Global online commerce is forecast to grow by an annual 20 per cent towards 2022, when the combined value is projected to total US$5.8 trillion.

Since these online e-commerce operators are SMEs that ship out a wide variety of products in relatively small volumes to customers worldwide, their collective competitive advantage lies in logistical efficiency. One way governments can help is to build a large-scale, hi-tech common logistics platform, complete with automated warehouses, online customs and shipping-clearing services, as well as an automated database and documentation system to support the exporters.

South Korea also plans to set up offices in India and the US to help its startups tap the global market and hook up with foreign multinational firms. Matchmaking and startup accelerator programmes are crucial parts of the overall Korean strategy to incubate and grow their e-commerce SMEs, which are regarded as the backbone of the economy.

In Thailand, SMEs are no less important. They have faced big challenges in tapping the global e-commerce market. Unlike larger exporters, they do not have the resources to effectively tap the global online export market. As a result, these relatively small players, which could one day grow into large exporters, need extra help from the government, which can combine a large number of small players and serve them with the more efficient common logistic platform. As South Korea has found, efficient logistics is a crucial competitive edge that can make or break small exporters that do not yet have the economies of scale to compete individually and stay profitable. 

The Eastern Economic Corridor (EEC) programme can play a leading role in this context in terms of housing the common logistics platform for qualified SMEs with a focus on the global e-commerce market. A partnership with global-scale players such as Alibaba and Amazon could boost the competitiveness of Thai SMEs that need to find their combined competitive edge in tapping the global e-commerce market, which has been grappling with traditional export markets for years.

In fact, Thailand should first focus geographically on the vast Indochinese market of Myanmar, Laos, Cambodia, Vietnam, as well as Malaysia and Singapore, where e-commerce has already become the norm due to the rapid pace of economic and social digitalisation. In addition, India, with a population of 1.3 billion, holds a huge potential due to the high growth rate of smartphone penetration, making online commerce feasible and attractive.

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