As the economic structure adapts to the Thailand 4.0 model, questions abound about whether the country will meet its milestones on schedule. Can the infrastructure be completed on time? Will the bureaucratic processes and regulations also be upgraded, to allow for fast and smooth operation of the commercial sector? Will Thailand’s education system rise to the task of training the younger generation to build, program, and operate the high-tech equipment that will drive the new economy?
No one can say with certainty which parts of the economy will make the best transition to Thailand 4.0, or whether construction on its major inaugural projects will be completed in 2022 or 2023. But there is already one clear winner in the Thailand 4.0 endeavor. Whichever industries thrive most mightily in the new economy, they will all be heavily dependent on online platforms for publicity, direct marketing, and a satisfying interactive customer journey. This is obviously good news for digital marketing agencies in Bangkok.
For any given industry, the closer its relationship is to the online world, the more certain its success will be in the new economy. The more it depends on traditional brick and mortar innovation, the more variables it will have to contend with (trade agreements, customs processes, transportation prices) which are out of its direct control.
Each of these commercial spheres has its advantages, and greater competition for the more lucrative spaces will make profits more difficult to come by for any given company. But all signs indicate that the economic ecosystem as a whole, both within Thailand and abroad, will reward digital innovation disproportionately as we move forward. The simple reason is that, in the new era, companies in all other industries depend on digital tools to succeed.
A glance at the world’s most highly valued companies makes the point crystal clear: Of the top eight, only Berkshire Hathaway is not primarily based in the digital world itself. And only Apple makes a significant proportion of its revenue by manufacturing products you can hold in your hand.
The Hunt for Thailand’s Treasure
By the time the enormous potential for success in the digital realm was widely understood in the West, clear and dominant winners had already emerged. Search engines, social media companies, and e-commerce platforms were never taken seriously by investors until Google, Facebook and Amazon had already taken overwhelming control of their corners of the market.
Whatever opinions one may have of the Great Firewall of China, the country’s protectionist approach allowed home-grown industries in these same sectors to flourish. Under free market conditions, Silicon Valley’s brightest stars would have almost certainly enjoyed the same success in China as they have elsewhere, crowding out any potential competition by local upstarts.
A highly competitive atmosphere never had the chance to develop in the digital realms of either the West or China – first, because the true value of these industries were poorly understood; and then, because the Great Firewall blocked market competition. But Thailand currently occupies a curious location in between these two worlds, and the current level of competitiveness among the players is truly a sight to behold.
With Amazon never well established in Asia, and no single entity taking its place as unquestioned market leader, a high-stakes battle is currently unfolding with the gargantuan e-commerce market as its prize. The more of a boom that Thailand 4.0 brings to the economy, the more disposable income people will have to spend on commercial goods; and with e-commerce emerging as the venue of choice for the younger generation, the spoils of war are plain for all to see. By 2025, Southeast Asia’s e-commerce market is expected to be worth $200 billion or more.
Lazada is currently Southeast Asia’s #1 e-commerce platform. Priceza is Thailand’s leading shopping-only search engine. Alibaba is setting up a logistics center in Thailand as part of its $320 million investment in the country. JD.com has partnered up with Google to deliver e-commerce services to Thailand and the region, joining forces with the Google Shopping platform. DHL has just announced same-day delivery services in Thailand. Tencent Holdings is combining its talents with the Singapore-based company Sea, which operates the regional e-commerce platform Shopee. Thailand Post is spending an additional 10 billion baht on infrastructure, largely to position itself as the logistics provider of choice to serve the country’s e-commerce market. Many of these companies are running specials and taking losses during the present period in order to establish themselves as favored providers for customers, anticipating that the boost to their brand will pay massive dividends down the road.
In such an environment, the only sure winner in the short and medium term is the consumer, and the only sure winner in the long term is the industry as a whole. The companies themselves are doomed to endure something like a years-long gladiatorial deathmatch, where competitors are red in tooth and claw until an equilibrium is reached among the few survivors. A partly similar scenario awaits the ridesharing industry, as Uber’s presumed dominance was halted by government order in 2014. The company mounted a partial comeback during the intervening years, and has now returned under a new name after its merger with Grab. In the meantime, the Indonesian ridesharing company Go-Jek is pushing forward with plans to enter the Thai and Vietnamese markets this August. Both will have to compete with traditional taxis for business, and other newcomers may well be on their way.
The Land of Smileys
The online sectors highlighted above are properly understood as a symptom of a wider phenomenon, rather than a new phenomenon of their own. The world at large, and Thailand in particular, have simply fallen in love with the current era of digital marketing and online technology. As highlighted at length in a previous blog post, Thai people are hooked on the internet to an extent that has few parallels. According to statistics compiled by Hootsuite, Thai people spend:
9 hours and 38 minutes online each day
4 hours and 56 minutes online via mobile phones each day
3 hours and 10 minutes on social media each day
Furthermore, among Thai people:
51 million use Facebook (out of a total population of 69 million), including 22 million Facebook users in Bangkok alone
61% of the country’s online population uses e-commerce
52% of the country’s online population uses M (mobile)-commerce
56% of the banking population uses online banking
Thailand’s online population is highly engaged with whatever they are viewing, as evidenced by the country’s ability to hold the second-highest engagement rate in the world for commercial Facebook posts, at 6.99%. Add in LINE, Instagram and other social platforms, and Thailand’s digital market is enormous. Yet all of the statistics above represent an increasing trend over previous years, indicating that the future will be even more digital dependent. Simply put, success in the online realm is all but a prerequisite for success in the real world, no matter what you are selling.
Books will surely be written about the reasons for Thailand’s wild embrace of all things digital. Part of the answer must surely lie in the freedom it offers to show the world only the side of ourselves we want to exhibit, but another large part must undoubtedly be the reverse: to look without being seen.
The online environment gives users the chance to look behind the advertisements they see, to check whether a company’s brand dovetails with their own values and identity. It lets potential customers determine, in an instant, whether the company is following through admirably on its online commitment, or simply dipping its toes in the digital water.
As with any other type of relationship, real commitment is valued and rewarded more strongly than halfhearted efforts. Companies would be well advised to invest heavily in their online presence, lest they lose customer loyalty to competitors who do take the time to develop an active and engaging online persona.
Beyond direct interaction, of course, online life is also appealing for the level of convenience it offers. The new Thai economy is set to deliver the real-world equivalent of this type of convenience, with its emphasis on robotics, artificial intelligence and smart cities. This is the new and exciting world we are beginning to enter together, and all signs point to the new dawn approaching sooner rather than later.
All of this indicates a bright future for Thailand 4.0 in terms of agile commerce and online entrepreneurship in the years ahead. If only the brick and mortar world can be as smooth, innovative and hassle-free as the current digital space, Thailand will help usher in a thrilling and inspiring future for us all.
Lexicon is a full-service digital marketing agency in Bangkok, Thailand. We specialize in corporate storytelling and produce all of our content in-house, including branding, copywriting, video production and graphic design. Lexicon’s social media marketing services start from just 25,000 THB per month.