E-commerce has quickly become one of the main benchmarks of economic development over the last decade. As the example of South East Asia – one of the fastest-growing e-commerce regions – shows, this index can reveal economic strengths amongst countries that are usually seen as backwards.
According to a recent analysis of survey company Frost & Sullivan, e-commerce in Southeast Asia amounted to approximately $11b in 2015, in itself already an impressive number. However, the report also expects this volume to more than double by 2020, when it should reach $25b.
Within Southeast Asia, Thailand is one of the most mature economies not only in regard to E-commerce. Yet it is here that the country excels: Thailand is currently ranked fifth behind the USA, China, Japan, and South Korea for the biggest volume of e-commerce globally.
As part of the National Development Council and BNext’s “Visiting Entrepreneur Program,” Thai entrepreneur Pawoot Pongvitayapanu, or Pom, has been invited to Taipei City for a keynote speech and interview.
Known as the father of e-commerce in his home country, the outspoken entrepreneur shared with attendees and BNext/Meet his valuable experience in running successful E-commerce businesses for over 18 years.
Father of E-Commerce in Thailand
Pom first made a name for himself in 1998 when he founded Tarad.com, Thailand’s first e-commerce platform. Following Tarad.com’s success, Pom set out to expand his e-commerce endeavor by establishing efrastructure in 2003.
Under efrastructure a variety of businesses are included, ranging from the payment platform Pay Solution (payment platform), to the digital ad firm Winter Energy, as well as many other sections.
But Pom is not only interested in finding success for himself. Besides his own companies, he is also a big supporter of local startups. For instance, MagicBox Asia, Builk.com and Shippop.com have all received funding from him.
This engagement with startups is one of the main reasons for why Pom is such a good choice for the Visiting Entrepreneur Program. As he puts it, “with 18 years of experience, I truly think that it is time to share my knowledge with others and allow them to benefit from it.”
Because of his expertise, Pom also serves as President of Thailand’s E-commerce Association, a government- linked industry association.
“Since E-commerce is still a relatively new field, the government sometimes doesn't really know how to handle its development. My job is to assist them and make sure that e-commerce can excel in Thailand,” Pom says.
The Rakuten experience
In 2009, Tarad.com joined the biggest Japanese e- commerce platform Rakuten, who initially held a controlling majority of the joint venture. Thailand was the second country after Taiwan into which Rakuten moved as part of its overseas expansion.
In 2016, however, Pom decided to buy back the majority. When asked about his cooperation with the Japanese e- commerce giant, Pom explained that he has learnt a lot from Rakuten system.
What with Rakuten being a Japanese company, Pom points out, their way of doing business is very Japanese indeed. For instance, they prefer managing affairs via organized strategies, and they are very on time at work.
At Rakuten, every single team member has to aim for their KPI to boost the company’s productivity. However, at the time of the merger, TARAD.com was still a startup with no specific rules and a blatant disregard for individual KPIs.
Pom further points out that the way communication between members of staff was handled at Rakuten was inspiring. In essence, the company scheduled meeting every week in order to give everyone a chance to understand the current situation and goals.
Eventually, Rakuten decided to terminate its endeavor in the Southeast Asian market with the exception of its Singaporean headquarters, thus giving Pom the opportunity to buy back his shares.
The reasons for Rakuten’s failure to succeed in the rapidly growing boom market are difficult to fathom, however. One possible factor could be culture shock, Pom thinks.
“While the Japanese business model can be highly successful at home, that approach may not work out in other places. At least in regard to Southeast Asia, the people and their culture are oftentimes too different from Japan.”
“Love for what you do and do something different!”
Asked about what young entrepreneurs should do, Pom stressed the importance of being dedicated to one’s goals. “You have to do the things you believe in. If you love what you do, you’ll be on the right path to success.”
What's more, “you must strive to be different from the rest, be unique” Pom urges. As he sees it, if you are doing the same things other are doing, then you can only compete in regard to pricing. “However, if you have innovative ideas and strive to realize them, then you’re already one step closer to success!”
But Pom also emphasizes the importance of staying on top of one’s finances and the quantitative aspects of doing business. “Always know your company’s data, so that you can track down potential issues quickly.”
One thing that startup founders should keep in mind is social responsibility. According to Pom, entrepreneurs should aim to make an impact in the society. “Doing something for the bigger good will boost your confidence and help your business to grow, all the while others also can benefit from what you are doing now.”
This is also what Pom tells new employees. “What we are doing now is for society as well.” As he sees it, e- commerce allows us to overcome geographic boundaries and deliver goods to customers that are otherwise marginalized. By giving them what they want where they need it, e-commerce can help to create a much more convenient environment for every member of society.