Leveraging e-commerce to |create new growth options

E-COMMERCE is now a big and growing share of many fast moving consumer good (FMCG) product categories across the world. China, Europe and the US are the biggest e-commerce markets globally and there is a lot brands in Thailand that can learn from these giants. 
Personal-care brands like Inoherb in China and Dollar Shave Club in the US have leveraged e-commerce to disrupt and capture market shares from strong, well-established brands like Olay and Gillette. In Thailand, Pomelo and JQ Puumanung are successful examples on how local companies can leverage e-commerce to tap new growth opportunities.
In many cases, these brands no longer need research and development departments, factories, salespeople or retail outlets. The combination of OEM suppliers, digital marketing platforms and e-commerce has disrupted the traditional barriers to entry and is reinventing the path to purchase. In 2016, the e-commerce market in Thailand rose by 15 to 20 per cent, amounting to Bt230 billion to Bt240 billion in revenue, according to the Ministry of Commerce, and the Electronic Transactions Development Agency has predicted that Thailand's e-commerce will account for a vast 15 per cent of all retail sales in the country by 2024, creating both opportunities and challenges for FMCG marketers.
Unlike the US, where consumers have both mobile and desktop computers, most consumers in Southeast Asia use only mobile phones to access the Internet. In Thailand, Thais spent more time on the Internet in 2016 compared to past years, at 45 hours a week on average or 6.4 hours a day, of which 160 minutes were spent on accessing the Internet via mobile daily, according to How Southeast Asia Uses Smartphones, eMarketer, 2016).
Even among those who visit e-commerce sites regularly, the majority of consumers outside the top cities only use mobile devices for access. This is one of the reasons why 30 per cent of e-commerce in Southeast Asia takes place through conversations on Facebook, Instagram and Messenger.
This behaviour, known as social commerce, is particularly well suited for situations where buyers need to interact with sellers to build trust or get expert advice. It also enables sellers to upsell or cross sell. In Thailand, where 92 per cent of e-commerce consumers engage with social networking daily , the importance of social commerce for local businesses is even more relevant. But this is a high-cost, high-touch model, not appropriate for all brands and categories. It's important to use the right e-commerce strategy, based on the consumer mindset and shopping behaviour of each category. E-commerce can be a great source of qualitative insight and quantitative data.
With Southeast Asia being pegged as the new frontier for e-commerce, and Internet penetration expected to grow to more than 50 per cent in most Southeast Asian countries by 2019 (Internet Users and Penetration in Southeast Asia, eMarketer, 2016) it's critical for FMCG brands to take action now and start implementing the right e-commerce strategy for their brand or category. For Thailand, where 7-10 people are on mobile, and Internet users are expected to rise further as the economy gears ahead to the government's Thailand 4.0 digital-economy scheme, FMCG brands need to either ride the wave or risk being washed out.

John Wagner is managing director, Facebook Thailand