E-commerce in 2019 is expected to flourish in Thailand as giant e-marketplace providers and huge social media platforms battle it out. Investors are expected to join the battlefield, laying their bids in front of payment and logistic players in e-commerce.

According to a study by Google and Temasek, 2018 was the year of e-commerce for Southeast Asia and Thailand could boast the fastest growth. The study, “e-Conomy SEA 2018: Southeast Asia’s Internet Economy Reaches an Inflection Point”, also found that e-commerce adoption had accelerated the most in Thailand, reaching nearly US$3 billion (Bt97 billion) this year after having tripled in two years – and the Kingdom was the second-largest e-commerce market in the region.

Thailand’s e-commerce is expected to grow at 30 per cent yearly from 2015 to 2025 to reach $13 billion (Bt421 billion). However, in 2018, Thailand’s e-commerce actually attained 49 per cent growth compared with 2015.

Experts confirm high and vigorous e-commerce growth for 2019. Giant

e-marketplace platforms including Lazada, Shopee, and JD will continue to heavily invest in taking marketshare, while giant social media platform including Facebook (and Instagram), Google, and Line will next year focus on e-commerce services.

Payment and logistics are the backbone of the sector’s growth. They will next year both see players taking a more aggressive stance to encourage e-commerce in this country. Thailand Post plans to launch a cash-on-delivery (COD) service to drive e-commerce next year, while Alibaba will operate a logistics hub in the Eastern Economic Corridor (EEC).

Thanawat Malabuppha, president of the Thai e-Commerce Association and chief executive officer of Priceza, predicts a more competitive market next year, with growth over 30 per cent above this year.

A dominant trend for the coming year will involve a shift from the current approach of social platforms to one that prominently includes e-commerce. All major platform players – including Google, Facebook, Instagram and Line – are about to aggressively enter the e-commerce battlefield. Google Shopping will be more active in Thailand, and Facebook Marketplace will be both more active and more aggressive. A lot more offline merchants will have an online presence on these platforms.

And many more people will be going online.

“Even bankers will be more aggressive on e-commerce, but the biggest impact to the market is the aggressive move of giant platform providers including Google, Facebook, and Line next year,” said Thanawat.

Even as search engines and social media platforms join the e-marketplace, the giant e-markets are crossing over into social media and searching. For example Lazada and Shopee started to host chat services to allow customers to chat with the merchant, with Lazada also allowing people to post to a news feed similar to that found on Facebook. In its most recent move, merchants can now to “live” on the Lazada app instead of on Facebook.

“Social media platforms like Facebook, Google, and Line have entered the e-commerce [ecosystem], while e-commerce platform like Shopee, Lazada, and JD have begun to offer several new social media services in order to be a part of users’ [lives]. These platforms both encourage and compete with each other,” said Thanawat.

Competition between Lazada, Shopee, and JD will be more intense next year. Within these e-marketplaces, merchants will also compete more. These e-marketplaces, offer at least 75 million items, with the varieties of products continuing to grow. Around 80 per cent of these products are made overseas, mostly in China. The presence of cross-border products will increase, and in the process destroy the competitive advantage of merchants who merely import products from China to sell online without adding any value.

The next trend is e-payment, Thanawat said, with cash on delivery (COD) accounting for the largest portion of e-commerce payment. COD can encourage people to dare to try out online shopping, and so can help recruit new online shoppers. On the other hand, COD is costly and inconvenient, as people need to wait to receive the product and make their payment.

“According to Bank of Thailand, the cot of handling a cash payment is around four to five times more expensive than for electronic payment. According to Amazon India, COD payment is three to five times more expensive than Amazon Pay,” said Thanawat.

All e-marketplace providers will try to drive people to their e-wallet to facilitate payment with electronic money. It is expected to see JD wallet next year. Lazada already has its wallet, Shopee has Alipay, and Line has Rabbit Line Pay. Next year, they will use subsidies to encourage people to shift to paying with e-wallet. The use of COD will decline, but for now remain the top choice for e-commerce payment in Thailand.

Omni-channel marketing will next year play a larger role in e-commerce. The omni-channel concept is to draw brands to every environment hosting large numbers of customers with the same seamless shopping experience As the platforms – Google, Line and Facebook – encourage e-commerce, many more brands will be drawn to the ecosystem, given the huge numbers of people hanging out there.

“Another driving factor is social media. E-commerce in Thailand is still growing at 30 per cent according to Google-Temasek. Social media is booming, Thais favour social media commerce. Thailand has the highest portion of social commerce than anywhere else in the world, according to PricewaterhouseCoopers,” said Thanawat.

The top three products categories for which people prefer to shop online are fashion, electronics and beauty.

Sustained expansion tipped

Pawoot Pongvitaya-panu, tarad.com founder and chief executive   and the former president of the  Thai e-Commerce Association, said  that

e-commerce in Thailand will continue to enjoy healthy growth next year. That’s because the big e-marketplace players will continue to invest heavily in e-commerce to capture marketshare, he explains, while the social media platforms continue to launch e-commerce services. “Next year, both the e-marketplace and social commerce will continue as the two main platforms for e-commerce in Thailand,” said Pawoot.

“Next year we will see more interesting e-commerce advertisements, especially from shopping searches like Google Shopping, which we have not seen a lot of this year in Thailand,” said Pawoot.

He added that Facebook will be more active in e-commerce, with both Facebook Marketplace and Facebook Group – as well as in logistics. Also, bankers will concentrate more on e-commerce as well, with more banks stepping into e-commerce. For example, Kasikornbank has launched KPlus Market.  “Line is another player that will make a big move into e-commerce next year .This year, Line acquired Sellsuki and is expected to do more,” said Pawoot.

Brands will focus more on e-commerce, getting involved in that market through both their own shopping websites and the e-marketplace.

Additionally, e-commerce in  2019 will continue its growth, due to the investment of payment and logistics players to facilitate people living in countryside to more easily shop for products online. Next year, a larger portion of e-commerce buyers will be spread out across the nation, with a sales split of about 44:56 between rural buyers and those in Bangkok.

However, because of aggressive moves in the big e-marketplace by Lazada, Shopee and JD, a lot more products from China are expected to flow through the Thai e-commerce market. The draft of the new Revenue Code will see tax investigations of people having above 3,000 online money transfers per year. The regulation could have an impact on e-commerce but is not expected to affect its growth.

People’s top three favourite product categories for online purchases are mobile and electronic products, fashion and beauty.

Artificial intelligence (AI) will play more role in e-commerce next year, and there will see a lot more use-cases.

“E-commerce will grow continuously and rapidly next year, building on the momentum from this year. All giant e-commerce players – Lazada, Shopee, and JD – heavily invested in e-commerce in Thailand this year and will next year,” said Pawoot. “One aggressive move is to leave commissions out. They also offer an open “mall” such as Lazada’s LazMall. Shopee opened ShopeeMall to compete withJD.com.”

Though these three giants hold most e-commerce in their hands, the other big slice of e-commerce – social commerce – is not yet dominated by a major player. Social commerce has become the long e-commerce tail in Thailand.

Paiboon Amonpinyokeat, of the National Cyber Security preparation committee and a cyber law expert, said that 2019 is expected to see active moves in cybersecurity, with the Cybersecurity Act expected to effect in 2019. This will encourage investments in cybersecurity and ventures by startups in Thailand.

“All cybersecurity bills are expected to be effective before the election, so it should be effective by February,” said Paiboon.

Cybersecurity in 2019 is expected to see much higher growth from 2018 since the new laws will encourage and compel organisations – both in the government and private sectors – to invest more in cybersecurity in order to ensure legal compliance.

The critical infrastructure will inject a lot more investment to make their system/infrastructure more secure and, by doing so, put them in legal compliance. Moreover, there will be more cybersecurity manpower and resource developments. According to the National Cyber Security Preparation Committee, the country is expected to have at least 5,000 cybersecurity workers in the next three to five years.

Under the Cybersecurity Act, apart from law enforcement, the provisions are part of efforts to encourage the critical infrastructure providers to invest and to devote more attention to cybersecurity. Another key act, the Digital ID Act, will also help leverage investment in cybersecurity in the country.

However, close monitoring is required on which draft of the Cybersecurity Act is picked by the commission to put for the NLA’s consideration, between the revised draft that the Cabinet has endorsed or the first draft that the Council of State has endorsed.

Two months were spent on the revised draft to make the adjustments of the earlier draft as a result of the participation of experts across the legal, technology and business domains.

It consists of three parts – business promotion, protection, and is not focused on “content”. The former draft is focused on content.

Prinya Hom-anek, the secretary of the Thailand Information Security Association (Tisa) and a cybersecurity expert, said that in 2019 all four digital Acts will officially take effect. The first two concern the leveraging of the Electronic Transactions Development Agency (Public Organisation) to become a national agency that operates and runs under its own Act; and the Electronic Transactions Act (2019).

As a result, electronic transactions will be tightened and have more costs to ensure regulatory compliance. This is to create more confidence in electronic transactions and will dramatically increase the number of electronic transactions in 2019.

The other two digital acts – the Cybersecurity Act and Personal Data Protection Act – are also expected to effect in early 2019. All four Acts are scheduled to be passed on to the National Legislative Assembly (NLA) for consideration and are expected to take effect next year.

Prinya has also highlighted the 10 cybersecurity trends for Thailand in 2019.

The first concerns data privacy and the risk of more leaks from cloud networks.

After the European Union’s (EU) General Data Protection Regulation (GDPR) took effect, Google, Apple and Facebook have allowed their users to download their own data.

The move comes against the backdrop of concerns that if people lose their passwords, other people would be able to download all their personal data. This leads to the prospect of an increase in repetitional risk, especially for people who set passwords that are too easy, without two-factor authentication. Those users without strong passwords have a higher chance that their personal data will be leaked.

Also, people who are careless with their passwords have a greater risk of losing their personal data.

Therefore, the first trend of cybersecurity is to have two-factor authentication. At this level of security, users need a six-digit authentication code each time. Two-factor authentication will be the default next year and indeed will become mandatory.

The second trend is for regulations to be tightened.

The drafts of the Personal Data Protection Act and Cybersecurity Act are expected to be effective next year. They have already passed the Cabinet’s scrutiny and awaiting the consideration of NLA.

The critical infrastructure will be more concentrated on cybersecurity and they will invest a lot more in leveraging their cybersecurity standards. Meanwhile, privacy policies and disclaimers will become more stringent next year.

“Individuals must carefully and thoroughly read the privacy policies of service providers,” said Prinya.

The third trend is de-anonymisation, which is a reverse data mining technique that re-identifies encrypted information. Efforts here will be related to personally identifiable information (PII), which is the practice of collecting public and private personal data that can be used to identify an individual for legal and illegal applications.

The fourth trend is the full implementation of cyber resilience. It needs to have full life-cycle-incident management. It is not about asking “Are we secure?”, because there is no 100 per cent secure guarantee. The question should be: “Are we ready?” And once there is a hacking, how prepared will an organisation be in terms of incident response?

“All individuals need to help protect themselves and not leave cybersecurity matters to the online service providers only. Individual (mobile) Internet users need to change their mindset about security. They have to prepare how fast they respond rapidly; they should prepare for the worst scenario,” said Prinya.

The fifth trend is enterprises’ cybersecurity discipline. Enterprises need to have more cybersecurity discipline. Cybersecurity is just not about technology issues, but it is about people and process issues. The trend is people will focus a lot more on people and process, not only technologies.

“Cybersecurity is not only a technical issue, it is about process and people and top management leadership,” said Prinya.

The sixth trend is Internet of Things (IoT) security.

A lot more devices connected to the Internet are raising more concerns about cybersecurity. Most of connected devices have default passwords, especially the medical devices and industrial devices. Therefore, a trend for hackers is to attack IoT and OT (operational technology) in the critical infrastructure.

“Thus, it is consistent with the second trend that the regulations will see more tightening, especially on the critical infrastructure that are targets of an attack,” said Prinya.

The seventh trend is about artificial intelligence used for the dark side of the Internet.

Hackers also use AI in hacking. Rather than coding, hackers use AI and machine learning to detect a system’s weakness and to attack the victim.

Viruses will be empowered by AI and machine learning as well as learning the patterns in order to avoid the anti-virus detection.

The eighth trend is for more social media scandals.

Social media scandals will also include those concerning fake news and cyber bullying. Since social media is a circle of influence, it can be used to manipulate the masses.

It is about the attention economy. Social media scandals are related to the attention economy. People normally have only eight seconds of attention. Cybersecurity is not just only about hackers and viruses.

“The most dangerous hacker is yourself when using social media and online services carelessly,” said Prinya.

The ninth trend is for cybersecurity transformation.

The next year trend is about a shift from digital transformation to cybersecurity transformation. If cybersecurity and privacy are not good, trust will not be sustained.

Therefore digital transformation would not be a success. So, cybersecurity transformation (including privacy) is the foundation for digital transformation.

The 10th trend concerns the area from the data economy to the crypto-economic field.

Now, the country is moving towards the data economy, which is not crypto-economic. Crypto and blockchain are the future, but not at the moment.

It is to move from the data economy to the crypto-economic realm in the next couple of years We are not yet seeing real-world mass implementation. It is the future technology and its arrival will take time.

“It is a subject matter for expert groups and for internal study,” said Prinya.