ทางนิตยสาร Forbes ติดต่อผมมาเพื่อสัมภาษณ์ตั้งแต่เดือน มค.2014 เพิ่งมาเห็นบทความที่เพิ่งได้ลงเมื่อวันที่ 7 กค 2014 เป็นการสัมภาษณ์แบบสรุปเรื่องราวการเปลี่ยนแปลงจาก TARAD.com เข้าสู่ Rakuten Family และภาพรวมของ E-Commerce เมืองไทย
B2B is still really hard in Thailand. – 7/05/2014 @ 7:32AM
The obstacles to establishing an online business-to-business marketplace in Thailand keep cropping up in a conversation with Pawoot (Pom) Ponvgvitayapanu, founder and managing director of Tarad.com or, more accurately nowadays, the company Rakuten Tarad.com. Japanese giant Rakuten bought a two-thirds share of Tarad.com in 2009 and is now lending its expertise to create the middle B in Tarad’s B2B2C.
Thailand’s oldest e-commerce site, Tarad.com resembles eBay or Rakuten, at least from the perspective of the individual customer. Anybody can list clothing, electronics, household goods, used and otherwise, to sell to fellow consumers in C2C (customer-to-customer) trade. Sellers, or merchants, that make enough products themselves or have access to a steady supply of, say, dresses or handbags or toys graduate to B2C (business-to-customer) status and conduct sales under their own shingles on Tarad. Retailers big and small have outposts as well.
At 38, Pom has spent his entire career building Tarad (“market” in Thai) but he is still entrepreneurial and enthusiastic, especially about his social media monitoring company, Zocial. He spends most of his time on Tarad, though; there are only two Japanese emissaries from Tokyo based in Bangkok now.
Historically, Tarad has made money from ads on the site and merchants’ payments for rent of their online shop space. Part of Tarad’s new strategy has been to hive off most of Tarad.com’s small merchants to TaradPlaza.com, while the company assumes a larger role between merchants and customers by providing advice and services to 2,000 or so of the most ambitious merchants.
(For now, I’m going to refer to both Tarad.com and TaradPlaza.com as “Tarad” because Pom does and TaradPlaza.com still looks like the rest of Rakuten Tarad.com website. And frankly I’m not sure where page views, purchases and practices on one site overlap with another.)
Tarad used to be described by the Thai press as Thailand’s largest shopping or trading site. Is that still true? With 250,000 merchants on affiliated platforms, 6.5 million customer accounts, 200,000 unique page views daily and 3.8 million items on sale, Tarad accounts for larger number of sales than any other Thai e-commerce site, Pom says. He also says that no one is collecting actual data on e-commerce sales data. He must know because, among his other posts (newspaper columnist, university lecturer), he is the founder and president of the seven-year-old Thai E-Commerce Association.
But what about size by earnings and revenue? People familiar with credit card and debit card trends in Thailand tell me that True Corp.’s Weloveshopping.com and Rocket Internet’s Zalora and Lazada sites are pulling in more revenues than Tarad if just because they are the retailers of goods directly to their customers and can hold onto a share of a product’s sale price.
Weloveshopping.com is part of the True television-broadband-mobile phone empire which, in turn, is related to the Chearavanont family’s ubiquitous CP conglomerate. Lazada (like Amazon, selling just about everything) and Zalora (selling clothing and shoes) are the well-funded shopping sites of the German clone-meister Rocket Internet.
Like seemingly every other e-commerce operator and observer in the region, Pom believes that the Zalora and Lazada sites in Southeast Asia aren’t profitable because, in the pursuit of market share, Rocket spends so extravagantly on marketing and salaries and its product prices are so low. “They plan to flip [to a sell to a big buyer like Amazon]. Everything they ship, they are losing money. They want to scale very fast,” he says.
Tarad now also has to contend with Lazada’s and Zalora’s shift this year to allow larger merchants to set up outlets on their sites. Yet the Rocket sites and Weloveshopping also shoulder costs of inventory storage, processing payments, and delivery. For most of its existence, Tarad has left it up to the customer and merchant to work out such details.
To backtrack for a little history … Tarad’s roots go back to the late 1990s and dot-com boom when Pom, a fresh graduate in architecture, launched ThaiSecondhand.com as a free online classifieds board with a couple of school friends: “Everyone was copying US websites. What made me unique was that my site was just selling things. The media was very interested.” When potential buyers faded away along with most of Thailand’s first websites, he continued the site as non-paying hobby and he worked at day jobs, such as the early unsuccessful Web ventures of Thaksin Shinawatra’s Shin Corp.
Tarad.com was eventually helped to grow and prosper with a 3 million baht ($70,000) investment in 2002 from Jasmine telecoms’ Pete Bodharimik, who didn’t have his Mono portal back then (Pete tripled his investment by the time Pom bought it back a few years later). By 2004, Tarad was making a profit from advertisements and the platform fees—at the time, the annual fee was less than $30 for a seller that listed more than 15 items.
In seven years, the number of employees increased from three to 70, which is about what it is today. Pom set up other companies, such as Winter Egency, which provides online marketing advice to Thai and foreign companies. But TaradB2B.com failed. He recalls, “I had B2C. I wanted to make a supply chain … B2B is very hard to do. The Thai market is very small. And manufacturing companies don’t sell online.”
Enter the Japanese. Tarad.com was Rakuten’s first acquisition of a shopping site outside of Japan back in 2009 but only in the past few years has Tarad’s Rakuten identity has become visible to the general public. In the meantime, Rakuten was engrossed in expanding its global footprint. In 2010, it bought US shopping site Buy.com and France’s PriceMinister. The following year it bought online retailers and markets in Brazil, Germany and Britain and took a small stake in Russian giant Ozon. It set up an office in India last month.
Rakuten Southeast Asian Co-Prosperity Sphere
It June 2012, Rakuten launched Rakuten Belanja Online in a joint venture with Indonesia’s MNC Group. The partnership soured by 2013 but Rakuten has continued running the site on its own. (Rakuten’s other online retailing partnerships have been hit or miss: its first joint venture, six-year-old Taiwan Rakuten Ichiba has worked out well but a China shopping site launched with search engine Baidu quickly foundered in 2011). Rakuten Malaysia debuted in December 2012 to mixed reviews. It was only in December 2013, despite plans announced in 2011, that Rakuten Singapore finally opened for business in an online market space that was crowded even before Singaporean Zalora and Lazada sites popped up in 2012.
The sale of a $3.3 million stake to Rakuten in 2009 made Pom secure for life. He could have walked away from Tarad forever. Did he consider taking a long vacation with his wife and two preschoolers? He seems surprised and says no: “I like to work.” He even seems enthusiastic about Japanese workplace organization which, shall we say, is considerably more regimented and rule-bound than Thai style: “I think it’s a good thing to change from a family culture. We were like brother and sister. We changed from family culture; we have gained something.” Employees can still wear t-shirts.
Although there are only two executives from Tokyo headquarters based in Bangkok, every Monday morning all Tarad employees attend a brief all-hands in the company’s new offices in an antiseptic tower high above humming Sathorn Road. On other mornings, individual teams hold meetings. And every Friday morning, Pom gets up at 5:30 am to come into the office for a teleconference of all Rakuten chiefs worldwide. Very un-Thai-like, he actually seems to enjoy this: “We share everything. Every number. You can see every number from every company. They know everything.”
Rakuten way to B2B2C
Other foreign suitors were interested in buying Tarad.com but Pom chose Rakuten because the Japanese giant’s e-commerce focus and philosophy of actively helping small- and medium-sized merchants to develop matched his own.
To participate in the new system, Tarad.com merchants were first pared down to 2,000 who were “really serious about e-commerce,”Pom explained. (The remaining 248,000 or so now vend their wares on the aforementioned TaradPlaza.com) These merchants also must have good products, a trustworthy record and be willing to put effort into generating sales.
Next, Tarad’s e-commerce consultants monitor sales and make recommendations for the merchant to improve. In return, Rakuten Tarad inserts itself in the chain: it handles payments, takes a commission, pays the merchant and provides the customer with a measure of security. The whole process is much smoother now that Thais are shifting from paying by bank-to-bank transfers and using more credit cards and mobile payments.
It’s not clear to me how much the Tarad.com is now involved in product shipping but “a full-service fulfillment plan” including packing and delivery is in the works, staff say. That’s crucial if it is to compete with the Rocket sites and–if it someday decides to set up local Southeast Asian sites–Amazon.*
But the most intriguing aspect of Rakuten’s strategy is the e-commerce advice it provides to small merchants, the virtual cottage industries. Pom sees e-commerce as a way to spread the wealth to the far reaches of Thailand. Although it’s not apparent to many tourists, most of the taxi drivers, street vendors, housemaids and other Thais performing menial tasks in Bangkok come from the much poorer countryside. Often these workers leave children and spouses back home for long stretches of time. What if they could stay at home and sell products online to customers elsewhere in Thailand? With proper website language translations and promotion, might they even be able sell to customers overseas someday?
That seemed like a far-fetched notion until Pom showed me a subtitled excerpt from this video of a costume-maker in a small town in northeastern part of the country. The woman’s hard-luck story of being a single mother is all-too-familiar in Thailand. Her dream of making costumes for the traditional likay folk theatre sounded impractical, though. Isn’t likay pretty much dead?
Well. Not only did she have enough customers and ambition to be among the 2,000 merchants to qualify for Tarad.com status, she now employs ten people–very possibly ten women who don’t have to work in less-skilled jobs far from home.
* And what of eBay? Pom does regard it as a potential rival. Exported-oriented Southeast Asian companies and websites have had niches on US and UK eBay sites for many years. EBay has local domains in Thailand, Indonesia, Malaysia,Philippines, Singapore and even a small one in Vietnam. At least in Thailand, if not in Singapore, most of the goods seem to be posted by overseas merchants. So, like orders placed from Asia to Amazon in the US or UK, shipping charges can be steep.