At a global level, one of the most affected sector is the consumer and retail industry, especially in terms of online shopping and changes in customer behaviors, resulting in a big shift in the way companies need to stay competitive.

According to the 2017 Thailand Internet User Profile by ETDA, online shopping ranked fifth in the rankings of the most popular online activity among internet users in Thailand; while in the previous year, it only ranked eighth.1 Consumers’ shopping behaviors are shifting, and as many businesses are struggling to adapt to the changing habits of consumers, there are five key retail trends that have emerged and been discussed in the latest KPMG International 2018 Global Retail Trends report.

Firstly, customer experience is more important than ever. In fact, what makes or break a retailer isn’t whether or not they are selling through online channels or physical stores.

By January 2019, 90 per cent of all retail will still be operating from physical stores. What is more important, however, is the experience that meets or exceeds customer expectations.

The new Nike store in New York is a good example of this; it opened a five-story store that is comparable to a theme park for sports lovers.

Among other things, it features a mini basketball court, treadmill, system that simulates runs in different locations, and a shoe bar where customers can customize their own Nike shoes.

This demonstrates how a brick-and-mortar retail can create a memorable customer experience in the age of e-commerce.

Secondly, Artificial Intelligence will gain more dominance with some executives predicting that 85 per cent of all transactions will be AI-based by 2020.

In 2018, we will see AI adoption continue to rise, with chatbots being one of the leading technologies. Due to increasing ease of deployment, instant availability and improved quality, chatbots will become more and more common to manage customer service queries and to make intelligent purchase recommendations.

Alongside having the technology available, retailers now also have a significant amount of data to power AI and deliver personalized, customized and localised experiences to customers. This will be able to answer to the demands of customers for better, faster and personalized experiences.

Thirdly, the rise of the conscious customer will continue as consumers base their buying decisions on many factors beyond price. Customers are demanding transparency as they take an increased interest in the ethical practices of the brands they buy from.

They need to stand for something and reflect that message consistently throughout the entire business from senior leadership through to front line staff. For example, research from YouGov and the Global Poverty have shown that many customers are willing to pay more for a product if there are guarantee that workers were being paid fairly and working in safe conditions.

Fourthly, the retail world we were promised is now here – it has changed and will continue to impact the path to purchase. This is the consequence of significant behavioral shifts over the last few years. New technologies have put the power in the customers’ hands. With instant messaging applications, instant gratification has had a deep impact on customer expectation. Brands that can offer immediacy, instant gratification, personalization, authenticity and accessibility will win.

Lastly, a tale of two hemispheres is playing out as traditional and non-traditional retailers expand businesses and services.

The juxtaposition between what is happening in the West and the East will dominate the retail landscape. China has developed a unique innovation ecosystem that has resulted in a revolutionary approach on a mass scale.

Already today, more Chinese consumers use mobile phones to access the internet than those in America, Brazil and Indonesia combined.

About half of China’s online sales take place via mobile, compared to barely a third in the US. In China, users can shop and pay within the apps. Advances in the East could be an indication of how retail will change in the West.

As the global consumer and retail industry is being transformed by three revolutions at once –geographic/geopolitical, demographic and technological – the tools, strategies and technologies required to be successful in this new world are available, and it’s up to retailers to choose the right tools from the toolbox in order to grow their business.

Contributed by Nittaya Chetchotiros, head of Consumer Markets, KPMG, Thailand.

However, for firms, sectors and localities that depend on revenues from exports of items targeted by the tariffs, the impact will be more significant, Moody’s Investors Service said yesterday.

This is following the tariffs China announced on 128 categories of imports affect a variety of sectors ranging from foodstuff, such as pork, to industrial goods.

As we have noted before, the importance of tariff announcements by both the US and China lies in what they may portend for overall bilateral trade and investment relations between the two countries. Moreover, the US and China are the world’s largest economies and they play a large role in global trade, production supply chains and investment. Therefore, their policy actions would likely have global macroeconomic and credit implications.

Although the macroeconomic impact of tariffs may appear limited when measured by the dollar value of goods affected, if such tariffs are seen by global market participants as signaling an escalation in trade tensions, they will eventually have a broader macroeconomic impact by dampening market sentiment as well as business investment decisions.

Financial markets have demonstrated their sensitivity to trade announcements over the past several weeks. However, whether actual domestic or cross-border business investment in particular sectors slows down as a result of rising trade tensions is yet to be seen, Moody said.

People may sometimes overlook these terms and disregard them as irrelevant to their businesses. But for others, they may look at the terms and wonder: is it just a business trend or hype that will eventually die out? Or is it something huge that is going to affect our businesses?

In all honesty, there is no definite or true answer to these questions. But, what I can tell you is this: disruption will one day affect you one way or another without a warning – and this is why you need constant innovation.

Disruption is clear. There was Uber disrupting the taxi industry, Airbnb shaking the world of accommodations, and Netflix taking over film and TV streaming. But, the importance of innovation may differ from one person to another. Often times, it can even be mistaken as simply new technologies.

Let’s take a step back and clarify these terms one by one. According to the Cambridge Dictionary, disruption is “an interruption in the usual way that a system, process, or event works”, while innovation is defined as “(the use of) a new idea or method”.

Simply put, in the world we live in, there is always some form of interruption to our businesses and the way we run it, therefore, we must constantly find new ideas and methods to make sure that the interruptions don’t complete stop our businesses.

But no matter what your perception of innovation may be, there is no denying the fact that we no longer live in the world where companies decide what consumers should buy. In our fast-changing world today, the modern consumers dictate what kind of goods and services – and even the whole consumer experience – should be.

In our disruptive world, change is so important. But the reality is this – many are still oblivious to the necessity of change because we have witnessed all kinds of disruption, from the volatility of oil prices to economic crashes. And even so, our companies have survived. So, why would this ever affect us?

The harsh reality is that no matter how long our businesses have been surviving, there is no guarantee that it would not fail in the near future. Describing disruption would be like what the famous American novelist, Ernest Hemmingway, once said: “slowly at first, then all at once”.

As a business leader, you may still have some doubts about the severity and the necessity to change in this day and age we are in. But my advice to you is to take a step back and reflect on businesses that were once successful but now have ceased to exist.

Past and current success cannot guarantee of what is to come. In many cases, it can blind business leaders into believing that the usual way of doing things will always be the best way. But, our fast-changing world says otherwise.

The speed of disruption today is different as technology is advancing rapidly and digitalisation has already taken over many organisations. The digital age has pushed businesses to adapt and become agile in order to survive. The key in our digital age is speed as time has become a luxury that many of us can no longer afford.

So, at this point, you should be asking: can you tell how much time your business has left before another company takes you out? If not, is hope dire when disruption suddenly hits your business?

The answer is no – that’s if you choose to take action now. The tides of change is coming in fast. The government in Thailand has responded to the changing world through the Thailand 4.0 initiatives. Business leaders of the private sector have also started taking small steps into initiating innovation and advancement for the nation.

You may have ideas on how you are going to bring your organisation forward through this transformation. Whatever those ideas may be, you, as a business leader, are the forefront of your organisation. In today’s changing world, if we cannot change and cater to our customers, someone else will.

You must lead your organisation through the transformation and process of innovation, leading them in the disruptive world.

Contributed by PRAPAIRAT PAVASANT, an Executive Director at SEAC, Southeast Asia’s leading Executive, Leadership and Innovation Capability Development Center.

You can contact her at prapairat_p@seasiacenter.com

The tourism and export sectors will continue to be the main growth drivers of the economy this year thanks to strong fundamentals of the global economy, the SCB Economic Intelligence Centre (EIC) said in a report. It forecasts 4 per cent growth in gross domestic product from the previous year.

In 2018, exports of goods and the number of tourists are projected to see year-on-year expansion of 5 per cent and 80 per cent, respectively, said the EIC, a unit of Siam Commercial Bank. “Sustained growth in exports has led to an increase in capacity utilisation, lending support to private investment going forward,” the report said.

“Moreover, private investment has an additional stimulus from the government’s infrastructure investment, particularly following the greater clarity in the Eastern Economic Corridor (EEC) project after the legislature passed the EEC law.

“This project has a high potential in attracting both domestic and foreign investment. In addition, the concern over a shortage of migrant labour has subsided, after the government postponed enforcement of the new regulation on undocumented migrant workers and eased the regulation’s rules of punishment.”

The EIC report said domestic consumer spending is projected to continue expanding, but remains reliant on the purchasing power of certain groups.

“In 2018, growth in domestic consumption will sustain its momentum from the previous year due mainly to consumption of durable goods among high-income earners, reflected by the high rates of growth in automobiles’ sales in the early 2018,” the report said.

“Nevertheless, spending from low-income households still faces headwinds due to high household debt level and slow recovery in employment and household income, reflected by increasing unemployment rate and declining overtime employment.

“This shows that the labour market has not received full benefits from the ongoing economic expansion. In addition, farm income has been negatively impacted by falling prices of some agricultural products, thus leading to subdued expansion in consumption of non-durable goods.

However, consumption of low-income workers will receive some support from the government’s state welfare project this year.”

The EIC researchers said that, overall, downside risks to the economy are low, but businesses in certain sectors should exercise greater caution. “First, the US’s protectionist trade policies potentially have a direct impact on some exports sectors, namely solar panels, washing machines, steel and aluminium.

These sectors constitute a low proportion of the total values of Thai exports, however, this source of risk might be more elevated in case the US’s major trading partners retaliate and it turns into trade war scenario,” the report said.

“Second, the strength and volatility of the baht will have repercussion on exporters’ baht revenue as well as competitiveness of agricultural products. Lastly, monetary policy normalisation of major central banks, particularly the US Federal Reserve, might trigger global financial markets’ volatility and tighten global liquidity, possibly resulting in adjustment in asset prices and negative impact on growth of some economies.

“For Thailand, the EIC assesses that the economy’s external financial stability remains intact.Therefore, volatility in the global financial markets should have limited impact on Thai economic growth this year.”

Manufacturing conditions deteriorated at the end of the first quarter following three months of improvement, a Nikkei Thailand Manufacturing study has found. Falls in output, new orders and input inventories weighed on the company’s purchasing managers index (PMI).

Factory job numbers fell further, while pressure on supply chains eased. For the first time in the survey’s history, business confidence was negative.

On the price front, inflationary pressures softened in March. The seasonally adjusted PMI fell from 50.9 in February to 49.1 in March, marking the first deterioration in the health of the sector for five months.

The latest reading was also the lowest since November 2016, although the rate of decline was marginal overall. Moreover, the average PMI reading for the first quarter was the highest for a year.

MORE MYANMAR FLIGHTS

Bangkok Airways has announced additional non-stop flights between Bangkok and the Myanmar city of Mandalay, bringing the total number of weekly flights on the route to 11 in order to serve increasing demand.

The additional service comes into effect on July 1, the carrier said yesterday.

The new outbound flight PG713 will depart from Suvarnabhumi airport at 5pm and arrive at Mandalay International Airport at 6:25pm every Monday, Wednesday, Friday and Sunday.

Inbound flight PG714 will depart at 7pm and arrive in Bangkok at 9.35pm the same day.

Bangkok Airways uses a 162-seater Airbus A320 aircraft on the route.

USED CARS ON SHOW

Alongside the 39th Bangkok International Motor Show at IMPACT’s Challenger Hall, organiser Grandprix International is staging the 10th Bangkok Used Car Show at the adjacent IMPACT Muang Thong Thani Halls 2-4.

Fourteen used-car dealers are participating in the event, which kicked off yesterday.

The scale of the threat was highlighted by a projection that there would be 11.4 million IoT devices in circulation by the end of this year, researcher Gartner said.

Sherif EI-Nabawi, senior director of Symantec Engineering Asia Pacific, said that the increasing popularity of IoT devices would draw out cyber criminals.

The attacks could show up in a range of fields, including as DDoS attacks that can cripple infrastructure and systems as well as result in fake input to control IoT devices in terms of pictures and voice.

“The IoT devices will provide persistent access to home networks and from there, spread to work resources and cloud services,” EI-Nabawi said.

“The IoT devices will be hijacked and used in attacks against us, such as with the hijacking of voice and VDO inputs.”

Meanwhile, Gartner predicts that global spending on IoT security would reach US$547 million in 2018. This year, more than 50 per cent of IoT device manufacturers will not be able to address threats from weak authentication practices, it said.

By 2020, more than 25 per cent of identified enterprise attacks will involve IoT, though IoT will account for only 10 per cent of information technology security budgets. Gartner predicts IoT security spending will be moderate until 2020, after which it will increase at a faster rate as execution improves.

By that year, at least half of all IoT implementations would use some form of cloud-based security service.

He said that Symantec’s Internet Security Threat report in 2017 shows that cyber-criminals are rapidly adding cryptojacking to their arsenal and creating a highly profitable new revenue stream, as the ransomware market becomes overpriced and over-crowded.

Riches motivate criminals

EI-Nabawi said crytojacking is a rising threat to cyber and personal security. “The massive profit incentive puts people, devices and organisations at risk of unauthorised coin miners siphoning resources from their system, further motivating criminals to infiltrate everything from home PCs to giant data centres,” he said.

In 2017, Thailand ranked fourth in the Asia Pacific Japan (APJ) region and 18th globally in terms of crypto-mining activities among 157 countries and territories.

Rattipong Putthacharoen, system engineer lead at Symantec Thailand, said that IoT devices would continue to be attractive targets for exploitation.

Symantec found a 600 per cent increase in overall IoT attacks in 2017, which means that cyber criminals could exploit the connected nature of these devices.

Apple’s Mac computers are not immune, either, with Symantec detecting an 80 per cent increase in coin mining attacks against the Mac operating system, Symantec said. By leveraging browser-based attacks, criminals do not need to download malware to a victim’s Mac or personal computer to carry out cyber attacks, the company said.

“There are variety of cyber threats that continue to rise in the market, including cryptocurrency malware, email, mobile threat, ransomware, spam and Web threats,” Symantec said.

NBTC secretary-general Takorn Tantasith said yesterday that the office would also propose – for consideration at the board meeting on April 11 – that Jas Mobile Broadband (JASMBB) be excluded from participation in the 1800MHz licence auction.

However, the board is viewed as unlikely to consider these proposals as it would want to leave these decisions to an incoming board. The National Legislative Assembly will appoint seven new NBTC commissioners on April 19.

Takorn said that despite the upcoming selection of the new commissioners, the office was duty-bound to press ahead to submit such proposals involving the original auction rules to the board, or risked facing a charge of negligence of duty.

The originally proposed auction rules provided for the sale of three licences of 1800MHz, each with 15MHz bandwidth. The amended version would see nine licences sold, each with 5MHz bandwidth.

Takorn said the proposed switch to the original version was in response to the opinions of prospective bidders that had already completed their business plans on these auction assumptions. Moreover, the NBTC should not keep revising the rules.

JASMBB was one of the auction winners for a 900MHz licence in 2015. However, it failed to pay the first instalment of the licence upfront fee by the deadline.

This prompted the NBTC to later re-auction the licence that JASMBB had won, resulting in Advanced Wireless Network (AWN) clinching the licence.

Earlier, the NBTC had viewed that JASMBB was still eligible to enter the bidding for a 1800MHz licence, given that it completed payment of the fine for its failure to pay the first instalment of the upfront fee for the 900MHz licence.

However, yesterday Takorn said that although JASMBB had fully paid the fine, it was viewed that the penalty did not did not match the damage caused by the consequences of what was seen as its over-aggressive bidding and its failure to make the upfront payment.

Were JASMBB allowed to enter the bidding for a 1800MHz licence, the other prospective bidders might feel uncertain as to the ultimate outcome, Takorn said.

JASMBB bid Bt75.6 billion for the 900MHz licence, almost five times the minimum starting bid.

Separately, TrueMove H Universal Communications (TUC), the other winner of a 900MHz licence auction in 2015, yesterday paid to the NBTC the second instalment of the licence upfront fee of around Bt4.301 billion. AWN, as the second holder of a 900MHz licence, is due to pay the second instalment in July this year.

AWN and TUC proposed to the junta last June that the Article 44 special power held by the junta chief under the interim constitution be invoked to allow the operators to divide the final instalments of the 900MHz spectrum licence upfront fee into multiple tranches.

AWN and TUC are scheduled to |pay the hefty final instalments of Bt59.574 billion and Bt60.218 billion, respectively, in 2020.

The junta had consulted the watchdog on the two operators’ requests.

The NBTC recommended that they should be allowed to split the final instalments payment into five tranches and that they pay interest of 1.5 per cent, based on the Bank of Thailand’s policy rate.

In the case of AWN, if the request were granted, it would be able to pay Bt11.914 billion as the first of a proposed five tranches of the final instalment. It would pay interest of 1.5 per cent on the remaining principal of Bt47.659 billion.

The NBTC submitted this proposal, together with other solutions to ease the financial burden of the digital TV licence holders, to the junta for consideration – for the first time – last week.

However, the junta deferred a final decision on the matter and asked the NBTC to present more details to justify the case for helping the operators. It said it was wary of possible criticism for favouring some private operators if it stepped in with assistance.

Takorn said that he would submit more details on the case for such assistance to Deputy Prime Minister Wissanu Krua-ngam by late yesterday or today.