Electronic Commerce

Introduction

E-commerce is an emerging opportunity for business-to-business and business-to-consumers in Thailand, especially since the increase of Internet users in the country of 800,000 in 1999 to around 1-1.5 million this year. The public sector is expected to spend 8.2% more on IT and the private sector anticipates a growth of 7 percent.

E-Commerce Statistics

In December 1999, the E-commerce Resource Center (ECRC) of the National Electronics and Computer Technology Center (NECTEC)  conducted a survey of Thai-owned websites.   

Here are some of the results of this survey:  

*Full service includes a complete range of integrated online services, including online payment systems, product shipping and delivery, security and after sales service to customers. As the level decreases, the services offered also lowers.  

Source:    "E-Commerce Market Survey," 02/29/2000, STAT-USA®/Internet™

The survey also found that the preferred method of payment among e-commerce consumers in Thailand is the credit card (the most popular is VISA, followed by MasterCard and American Express). Direct transfer of funds from bank accounts and direct payments are also popular. The E-Commerce traders in Thailand prefer to use the major domestic parcel company, The Communications Authority of Thailand, to ship products to their customers. However, when international shipping is necessary, the major delivery companies rank DHL, UPS, and Federal Express.¹

Southeast Asian E-Commerce Revenue  back to top

  In US dollars (millions)   

Source:  "E-Commerce Market Survey," 02/29/2000, STAT-USA®/Internet™

In 1999, about 100,000 people in Thailand engaged in e-commerce transactions and the estimated transactions ranged from 30 to 32 million US dollars. The Thai government estimates that this number will increase to 1.2 billion US dollars by 2003.²

Data Centers  back to top

There are over 6,000 small and medium-sized enterprises (SMEs) in Thailand and 10% have begun to use the Internet as either a distribution channel for products and/or services or a means of disseminating information about their businesses. Many of these SMEs cannot afford to purchase the most recent information technology, let alone continually update it as new innovations are introduced. 

In response to this growing need, several data centers have been established in order to provide these new online entrepreneurs with a variety of services. These services include hosting, technical support and technology management.  Some data centers also act as application service-providers (ASPs).  The data centers enable the business people to concentrate on their business while letting others deal with the complicated information technology that supports it.

Many of the data centers in Thailand have joined forces with well-known IT companies. Some of the bigger data centers include:

• Datamat (who works with AD Venture, a venture fund of Shin Corps (Thailand's biggest telecom operator))

• DataOne Asia (a multi national data center)

• Internet Thailand (Thailand's biggest ISP, in collaboration with Compaq Thailand)

• JiNet (an ISP)

• C & W Service (Cable & Wireless Hong Kong Telecommunications, a Hong Kong-based telecom operator)

• Cisco Systems  (a US-based company that has formed an alliance with Acer CyberCenter Services and Acer Sertek)³

Hindering E-Commerce Regulations   back to top

The Thai government has plans to comply with the WTO’s deadline to fully privatize the telecommunications sector by 2006. However, until this legislation is fully implemented and more people have the opportunity to access the Internet, whether in their homes or from Internet cafes or from Universities, e-commerce will be a risky venture to pursue. 

Helpful E-Commerce Regulations  back to top

The Thai Government maintains a web site to promote e-commerce transactions within the country. The web site, ThaiEcommerce.net, encourages qualified manufacturers to use the Internet as a means of distributing their products to potential customers abroad. The web site provides their patrons with a convenient E-Commerce system that allows them to send orders and make payment over a secure channel.  The government monitors the delivery of all products sold via this service and provides the customers with warranties.

Eventually, this web site will allow the Ministry of Commerce to promote this web site service for medium to big businesses to sell their products.

The Thai government recently completed a draft E-Commerce Act. It is anticipated that this Act will pass into lay by the end of 2000, pending Parliament’s approval.

Coming Up    back to top

According to a recent study by a Thai newspaper,  Thailand will see an increase in e-commerce of 50 times its present level in the next three years.⁴

Thailand's  "inadequate understanding of the New Economy and limited access to e-commerce, as well as lack of confidence in the security of using the Internet [explains why it is lagging behind other Asian countries]."⁵

"To address Thailand's shortcomings, the government should first of all ensure that the E-commerce Resource Centre (ECRC) and other agencies related to e-commerce promotion are able to produce more effective results," Roy said.

Roy also recommended government support and expansion for low cost Internet access, and pushing industries such as tourism to move online more quickly, the report said.

Kogod School of Business           American University        Other Country Reports

Sources:

¹  "E-Commerce Market Survey," 02/29/2000, STAT-USA®/Internet™

²   Ibid

³  Dhamacharoen, Sairoong, "Data-Center Trend Growing in IT World,"  The Nation, The Nation Publishing Group,  10/30,2000, LEXIS-NEXIS ® Academic Universe.

⁴  http://asia.internet.com/2000/6/2604-thai.html

⁵A quote from The Nation by a Mr. Roy Chitaradon, a Nectec research specialist.