Page 10 - Masala Lite Issue 165 September 2024

10 TRENDING NOW
The

YINand YANG

of CHINESE

E COMMERCE

The good, the bad, and the downlow
on shopping from Chinese apps.

BY VENESA DASWANI

Geopolitical Impact
The expansion of Chinese e-commerce can be seen as part of a broader strategy
by China to assert its influence in Southeast Asia. By dominating regional markets
hinese e-commerce platforms have revolutionised global trade, offering
and undermining local industries, China could be advancing its policy of economic
unparalleled access to vast markets and driving economic growth in various
hegemony, potentially leading neighbouring countries like Thailand into a position
countries, including Thailand. The rise of giants like SHEIN, Alibaba and
of economic dependence. This dynamic, often described as a “beggar thy neighbour”
Temu, which has recently launched in Thailand, plus many more, has opened up new
approach, poses a long-term threat to the sovereignty and economic independence
opportunities for Thai businesses to reach a broader audience and tap into China’s
of Thailand.
booming consumer base. However, this expansion also brings challenges, as local
companies face fierce competition, pricing pressures, and concerns over intellectual THAILAND’S RESPONSE
property rights.
Thai companies are responding to the influx of Chinese e-commerce platforms with a
THE YANG: THE ‘LIGHT’ SIDE mix of adaptation and innovation. Some businesses have successfully embraced the
new landscape by expanding their online presence, leveraging the advanced logistics
Expanded Market Access and marketing tools provided by these platforms, and even partnering with Chinese
firms to enhance their competitiveness. For example Alibaba has now opened doors
Chinese e-commerce platforms have brought several benefits to Thailand, significantly
to millions of new consumers.
enhancing market access and transforming the country’s digital economy. Thai
consumers now enjoy a wider variety of products at competitive prices, thanks to the However, looking ahead, the Thai e-commerce market faces several potential scenarios.
expansive reach and diversity of offerings on platforms like Temu. This accessibility Over the next 5-10 years, Chinese platforms are likely to deepen their integration into
extends beyond just consumers; Thai companies also have unprecedented opportunities the Thai economy, which could either bolster or stifle local competition depending on
to tap into the vast Chinese market, boosting exports by selling directly on these how the market evolves. To navigate these challenges, Thai companies must focus on
platforms. innovation, not only in products and services but also in their approach to e-commerce.

Building strong partnerships, understanding the nuances of the Chinese market, and
A Catalyst for Technological and Economic Growth
developing a unique value proposition will be critical for Thai businesses to thrive.
Moreover, the entry of Chinese e-commerce giants into Thailand has accelerated
technological advancements across the board. Advanced logistics networks, innovative For better or worse, here is a list of Chinese
payment systems, and AI-driven marketing strategies have raised the bar for digital e-commerce platforms that are available in Thailand:
commerce in Thailand. This influx of technology has not only improved the efficiency
and reliability of Thailand’s e-commerce infrastructure but has also spurred local
companies to innovate and adopt cutting-edge practices to remain competitive. The
positive ripple effects of these platforms are also evident in the broader e-commerce
ecosystem in Thailand. The growth of the sector has led to a boom in related industries
• Shopee
such as logistics, warehousing, and digital payments, creating a host of new job
opportunities and fostering skill development in these areas.

• TikTok Shop
THE YIN: THE ‘DARK’ SIDE

Untenable Competition for Local Businesses
The rapid rise of Chinese e-commerce platforms in Thailand has brought significant
• Lazada
challenges to the local economy, particularly for small and medium-sized enterprises
(SMEs). Thai businesses, especially those operating in the traditional retail sector,
struggle to compete with Chinese sellers who offer products at significantly lower • Wish: Known for its flash
prices, often due to economies of scale and cheaper production methods. This intense sales and affordable prices
competition has led to the dominance of Chinese products in online marketplaces, • JD Central: A joint venture between
making it difficult for local brands to maintain visibility and market share. JD.com and Central Group

Additionally, there are concerns that the growing market share of Chinese platforms
could lead to monopolistic behaviours. If local competitors are driven out, Thai
consumers might face reduced choices and higher prices in the long run. This scenario
not only threatens the economic diversity of Thailand but also risks creating an
• TaoBao: A popular
over-reliance on Chinese technology and platforms, further embedding Thailand
Chinese platform
into China’s economic orbit.

• AliExpress
Quality and Ethical Concerns
The prevalence of inexpensive, mass-produced Chinese products can undermine the
market for Thai-made goods, which are often crafted with higher-quality materials
and traditional techniques. Moreover, this flood of cheap goods is detrimental to the
environment, as many of these products are made with low-quality materials that
• Pinduoduo: A group
contribute to environmental degradation, and are often made with cheap, underpaid
buying platform that
labour. The increase in transportation for deliveries and returns, coupled with excessive
• Temu: Offers ultra-low prices offers discounts on bulk-
packaging, further exacerbates environmental concerns.
and a wide product range purchased products
MASAL A LITE ISSUE 165 - SEPTEMBER 2024