The value of e-commerce has grown from approximately around Bt2 trillion in 2014 to over Bt3.2 trillion in 2018. It is undeniable that some SMEs will be beneficiaries of such disruption, while others will not.

Why should we focus on SMEs?

SMEs account for 99 per cent of the number of businesses in Thailand, and are dominated by those with sales revenues of around Bt1 million to Bt10 million, the small SMEs. Most are trading businesses distributed across the country. However, small SMEs these days lack in identifying, understanding and speaking to their target customers. They struggle to keep pace with the patterns of customers, who purchasing goods through both bricks-and-mortar stores and online. It is not surprising that less than half of SMEs were still surviving a year after being established, according to the Office of SMEs Promotion.

How, then, can SMEs thrive in this age of constant technological disruption? The key answer does not lie with adopting the e-commerce trend and giving up all the traditional ways of trading. Instead, the businesses should focus on “understanding their customers’ journey and behaviour”.

For example, according to SAP and BCG, the well-established global consulting firms, for perishable grocery items as well as furniture, customers still prefer shopping at a bricks-and-mortar store so that they can physically view the product, check its quality as they cannot be assured simply by product brand, and immediately retrieve the goods. Customers seeking fashion products (clothing, and shoes) in contrast, prefer a mixture of both offline and online channels (i.e., “clicks-and-mortar”) to try out the product before committing to a purchase. Lastly, customers seeking sports equipment, cosmetics and bathroom products prefer purchasing via online channels because of the products’ standardised quality.

Business strategies should be adjusted accordingly.

Businesses, whose customers favour shopping at bricks-and-mortar stores could, for example, improve the customer experience simply by rearranging the products to accommodate their customers’ product search. By doing this, businesses could also increase their chances of cross-selling the related products. The more advanced strategy would be to adopt available technologies to build engagement and collect customers’ data through targeted promotion and campaign.

This could be quite different from serving customers who prefer “clicks-and-mortar” shopping.

For example, the ETDA and SAP surveys revealed that the problem is not that people do not shop for clothing online, because 73 per cent of customers have indeed previously shopped online. The problem is that 25 per cent of them left the products in the shopping cart and cancelled their orders. After correctly identifying the problem, businesses can more deeply investigate customers’ pain. They might just offer customers a free-return policy. Or they could opt for more advanced solutions like augmented reality and virtual reality to minimise the problem of non-standard sizing in clothing and shoes in order to enhance the online success rate. By doing this, the businesses could limit the physical stores’ maintenance costs by reallocating stores to where their customers are.

Finally, online shoppers will focus on the ease of exchanging or getting a refund on products exchange as well as product comparison tools. Thais are generally price sensitive and can be influenced by promotion. Illustrating the total price, including the transportation fee and VAT, during product selection would improve the transaction success rate.

As well, businesses should thoroughly utilise customer data to help provide better-personalised experiences. Customer tastes and preferences, previous purchases, and demographic information could be used to customise the in-store experience and online offerings.

For example, businesses can adopt tools provided by Facebook to help rationalise their marketing budget through the ad placement and ad budget and schedule features. Business can choose where to advertise and set up the timing and budget for an advertising campaign. Another useful tool is Google Search. Business can also select search engine optimisation or search engine marketing features to more effectively reach target customers. All the information behind these platforms will provide valuable insights for a more effective business sales strategy.

In summary, whether businesses are conducted through bricks-and-mortar, clicks-and-mortar, or clicks-and-clicks stores, empathising with customers in all aspects – their journey, behaviour, needs and pain points – is the key to business success in this era featuring an increasingly digitised world combined with intensified price competition. Views expressed in this article are those of the author and not necessarily of TMB Bank or its executives.

Contributed by WIRUNPON ROCHANAVIBHATAVANICH, business development department at TMB Analytics. She can be reached at Wirunpon.roc@tmbbank.com

When that happens, it sends a distress signal about the economy. The yield curve matters because it reflects the market’s view of the economy. In the late stage of economic expansion, short-term rates tend to rise during Fed tightening cycles. As well, long-term rates can fall when there is rising demand for bonds. When long-term rates falls below shorter ones – or when the yield curve inverts – it indicates that investors are moving toward the safety of long-term government bonds.

Historically, the yield curve has been a reliable predictor of a coming recession. Each and every one of the past seven recessions since the 1960s has been preceded by an inverted yield curve. Recently, the spread between three-month bills and 10-year treasuries inverted in March – and it has triggered a panicked sell-off in the stock markets.

While it is one of the best warning signs of recession, the inverted yield curve is not necessarily a sell signal for stocks as there has historically been a significant lag from the time of yield curve inversion to the start of a recession. Our research shows that in the past seven US recessions, it took an average of 20 months to reach the next recession. This suggests that the US economy could enter recession in late 2020.

The stock market, on average, peaks eight month before a recession starts. Therefore, if the historical pattern holds, we are still 12 months away from a market peak. During a recession, the stock market usually continues to fall for several months. The market then bottoms out about six months after the start of a recession, and usually begins to retrace loss before the economy begins to recover.

To repeat: We are likely quite some time away from a recession and the accompanied stock market peak. Nonetheless, prudent investors should start thinking about their investment strategy to cope with that possibility. Those who have short- to medium-term investment goals should focus on capital preservation and start diversifying their investment portfolio into less risky asset classes such as bonds or gold. Those who have a long investment horizon can continue to invest in the stock market but should focus on defensive sectors with a long-term growth story such as the global health-care sector.

Because one thing is certain – this cycle will end at some point.

Contributed by KOMSORN PRAKOBPHOL, head of Tisco’s economic strategy unit (ESU).

He said the project involves the construction of dams from Municipal Road in Chatuchak district to the end the Bangkok, extending further to Klong Baan Mai and Klong Rangsit Prayoonsak in Pathum Thani province before reaching Bang Pra In in Ayudhaya province.

The project will improve the water drainage system, and the quality of living of people residing close to the dams, he said.

Therdsak Thaveeteeratham

Executive Vice President / Research

Asia Plus Securities

The SET Index is expected to fluctuate in a range of 1,630-1,660 points.

The investment mechanism currently consists of several elements for capital to move into the Thai bourse, ranging from the end of the interest rate’s upward trend and a possible rate cut in some countries, a higher Thai 10-year bond yield than the US 10-year bond yield, a market earnings gap which indicates a 4.3 per cent higher return in the stock market than the bond market, and a historical low foreign holding of Thai stocks at 22.6 per cent.

Yet capital has not flown back into the stock market likely due to concerns over Thailand’s political situation after the election and worries over the next government’s stability.

This week, key external factors are centred on optimism for the US-China trade war and concerns over Brexit. Britain is due to leave the European Union on April 12.

Risks may heighten in the event of a no-deal Brexit.

Also this week, the SET Index will likely fluctuate in the range of 1,630-1,660 points. We prefer stocks with low downside risks and a sufficiently high dividend yield such as PTTGC which has been pressured by an over Bt12-billion short sell (from early 2019 to now). PTTGC’s dividend yield is close to 6 per cent with a 15 per cent upside from the fair value. We also like EASTW with its stable price move, expected higher water sales in the summer, long-term gain from the EEC and a dividend yield of higher than 4 per cent, as well as DCC with sales recovery of tiles, distribution channels for rental income and a dividend yield of 5 per cent.

Passakorn Linmaneechote

Deputy Managing Director – Research

Kasikorn Securities

The SET Index will likely swing up.

A negotiation report on the Washington trade dispute is expected to drive the stock market this week. If there’s progress without details, we could see a sell on fact. But if the negotiation progress is filed with details, the stock market is expected to continue its rise. Domestically, we expect the stock market to weigh on the political issue after announcing the formal election results on May 9.

The SET Index this week is expected to swing up from positive trade negotiations with likely thin turnover for the long holidays. Meanwhile, we see external risks from strong US economic figures which could pressure the FOMC to raise the rate and, as a result, lead to a possible capital flee from emerging stock markets including the Thai bourse.

Saravut Tachochavalit

Senior Vice President, Research Department

RHB Securities (Thailand)

This week, new factors that could affect the global and Thai stock markets include the ECB meeting, Brexit, the March OPEC production report, the Fed’s sudden policy shift for no rate rise this year and the cease of QT this September, China’s inflation and exports, and the IMF report that is expected to announce a downward revision of its estimates for economic growth particularly in the eurozone.

We expect the SET Index to swing in a range of 1,630-1,667 points, given the period of 1Q19 earnings results announcement for commercial banks. Commercial banks in our coverage are forecast to see a 12- per-cent drop YoY but a 13-per-cent rise QoQ in 1Q19 net profit. We pick KBANK with a target price of Bt222 and BBL with a target price of Bt241.

The fund will continue to subsidise the costs of energy for household customers following the Energy Policy Committee approval.

The committee approved losses to the oil fund of up to Bt7 billion to support the household costs for LPG. So far, the fund is showing a net loss of I Bt6.13 billion, leaving room for continuing price subsidies through to July, said Siri.