July, 2000, 3 articles mentioning B2B potential and quoting CP Group. The use of the "7-Elevens" was originally announced with the visit by Microsoft Executives and the investment in Microsoft Software in May, 1999. Looks like they are making progress with that idea.
Suppliers told to meet Net standards, NATION
( The Nation (Thailand) )
NOPHAKHUN LIMSAMARNPHUN; 07-31-2000
THE country's 400,000 small and medium-sized enterprises (SMEs) are being urged to jump on the business-to-business (B2B) e-commerce bandwagon now instead of later because US-led global markets have begun to require suppliers to meet new Internet-based standards on sourcing, procurement
and social accountability.
Only 2.5 per cent of Thailand's SME suppliers are ready to meet the new standards, according to a panel discussion organized by The Nation
last week.
Meanwhile, companies will have to learn more about e-commerce standards while developing projects to create sustainable Internet-based businesses, said Phanu Limmanont, assistant vice president of Counter Service
Co Ltd and Retail Link (Thailand), the e-commerce units of Charoen Pokphand Group.
"We used to have about 500,000 SMEs but some 100,000 went under (because of the economic crisis). Of the remaining 400,000, only 10,000 can now meet global e-commerce standards. We cannot wait for B2B to start.
We have to push.
"The (next) government will have to help. So far, we've not heard any substantial policies on this important issue."
Phanu said Thai businesses will have to find out how to leverage what they have been doing in terms of both products and services if they are going to stay competitive in the global marketplace driven by the Internet.
Kartchai Jamkajornkeit, president of Apparel Avenue Co, an exporter of ready-made garments, said major buyers now want more information about the production process so they can quickly respond to the needs of importers and retailers.
"This means our production operation will be on the web. After keying in the password, they can check the production status of their orders.
"In supply chain management, this e-sourcing trend is coming. Instead of sending people to Thailand, China or other producer countries, they will source on the web using new standards. They don't have to fly here, but can cut deals on the Net. Factories that pass these criteria will be
allowed to enter the e-source network.
"We're among the first in the industry with ISO 9200 and first in Asean with ISO 14100 and Social Accountability 8000 on human rights, which is sought after by the US market. We hope to be among the sources that
meet the criteria," Kartchai said.
However, if the real sector or smaller Thai suppliers aren't ready, e-sourcing won't be possible. Even some of Apparel Avenue's own suppliers are still lacking an awareness and understanding of the system, he said.
"These factories still have one hand on the keyboard and the other hand speaking on the phone shouting to their clients in the traditional manner. But there are also SMEs that find it necessary to upgrade rapidly
to meet requirements in foreign markets. The government sector needs to help educate them and give them incentives to follow up on this trend."
Trin Tantsetthi, president of Internet Thailand Co Ltd, said B2B should lead e-commerce in Thailand, even though his company decided to try its hand at B2C e-commerce first.
"Earlier we thought B2B would need a high investment to automate all back-end operations," he said. "But we still don't expect our B2C venture,
which was launched on May 1, to grow to Bt100 million or Bt1 billion in turnover yet. This will simply help educate the market. Since May 1, there have been 20,000 hits on Thai.com's shopping site."
For Pichet Durongkaveroj, director of Electronic Commerce Resource Centre, National Electronic and Computer Technology Centre (NECTEC), said e-commerce is also important for Thailand's tens of thousands of farm and
other rural cooperatives.
"E-commerce can benefit villagers who will be able to sell their crops and other products with more bargaining power via the Internet ," he told the Nation panel, adding that government ministries such as those of the interior, agriculture, and industry have yet to respond to this initiative.
The concept is based on the idea of grouping the cooperatives and their output together, giving the villagers much stronger bargaining power in the market. This market will also not be limited to the producers' own
villages, towns or cities, but a much wider interprovincial or nationwide or even export markets. Villagers can also share resources such as logistics.
Pichet told the panel that e-commerce cooperatives do not require a big investment. The government only needs to equip cooperatives with the basic Internet tools.
"The villagers do not even need to know about the Internet, but cooperative operators do have to know. We simply need one or two successful cases or schemes to kick off the idea."
"Some people are also worried that rural villagers won't have access to phone lines. The fact is that if we adopt the policy for e-commerce coops it is not going to be an issue since we'll have a manageable size which is attractive for telecom operators and ISPs to provide services. It's the demand side approach. There will also be business opportunities for ASPs (application service providers) and web designers etc"
Pichet suggests the government start with a pilot project for one or a few cooperatives to do e-commerce for handicrafts, another for the food business and a third for herbal products. "In fact, the e-commerce cooperative
project is a good idea for the next election. It may sound difficult for those who cannot visualise it. But e-cooperatives will satisfy existing demand."
Pichet said NECTEC has also adopted a sectoral approach to promote e-commerce, starting with tourism and the country's top-10 export products. It also aims to tap other companies with the critical mass such as Board
of Investment-promoted firms and the 6,000 enterprises that are members of the Department of Export Promotion (DEP).
"No big plan is required. The DEP only needs to facilitate these enterprises with a little push to start doing some e-commerce. From the strategic point of view, we need to do b2b e-commerce before b2c (business to consumers) because b2b are masses and b2c will follow naturally," he said.
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E-BUSINESS: A B2B boom may over take B2C, The Nation (Thailand); 07-26-2000
The Internet evolution in Thailand will likely see a boom in business-to-business (B2B) e-commerce ahead of the business-to-consumer (B2C) mode due to a number of factors now favorable to B2B.
According to a report by US investment bank Goldman Sachs, B2B transactions (in which a firm does business with another via the Internet)in the Asia Pacific region are forecast to reach US$440 billion by 2005, representing 10 per cent of the world's total B2B transactions of US$4.5
trillion.
While it is still early days in Internet use for Thailand and other countries in the region, there are already a number of corporate leaders, including Hong Kong's Hutchison, Li & Fung and Hong Kong Shanghai Banking
Corp. as well as Thailand's Siam Cement plc.
Siam Cement, a newcomer on the B2B scene, plans to implement an e-commerce system that will link its manufacturing operations of cement and other building materials and industrial products with its vast network
of distributors and dealers. This will enhance its competitiveness in the New Economy which is arriving here. Siam Cement is on the list of recommended regional stocks of Goldman Sachs.
Besides this traditional brickS-and-mortar company, Thailand has also seen a number of pure Internet start-ups such as Point Asia Dotcom of the Loxley Group, Samart Exchange of the Samart Group and Shin Group's e-commerce
units which want to tap the potentially lucrative B2B industry.
At this stage, B2B appears to have a better chance to succeed than B2C. B2B will cater to the business community which is keen to increase its efficiency with Internet technology in the globalised marketplace in
order to stay ahead of the competition, whereas B2C aims to capture individual consumers, especially those aged from 15 to 35.
The needs of the business community should be much less diverse than those of individual consumers. For instance, Point Asia Dotcom wants to remove inefficiencies in the oil and other industries. Its Point Asia Oil
recently signed an MOU with the Bank of Asia to provide B2B solutions to the petroleum industry via a system in which oil buyers and sellers will use the Internet to improve logistics and speed up transactions with e-pricing, e-production, e-invoicing, and e-payment.
Point Asia has also set its sights on financial services, the automobile industry, building materials, and medical supplies.
The Loxley Group has a shareholding in the Singapore-based Bex.com, the regional e-marketplace, also partly owned by Shin Group.
As for the Samart Group, its Samart Exchange wants to enter into B2B e-commerce for the jewelry and rice industries.
Second, the income model of B2B is more encouraging for investors since businesses have more money than young consumers, many of whom are still financially dependent on their parents.
Third, business firms already have good logistics and other forms of infrastructure to facilitate e-commerce whereas B2C will still need a higher PC penetration rate than the current 1.2 million PCs in the country. Businesses
can also turn to mobile commerce via the new generation of cellular phones using wireless application protocol (WAP) technology.
The success of B2C also hinges upon the liberalization of the ISP (internet service provider) industry, due later this year, as well as other
cost reductions, especially in logistics that allow operators to deliver goods purchased on the Net to individual buyers in a cost-effective manner.
The Thai postal service is still a long way from achieving a high level of efficiency for e-commerce.
As a consequence, some pundits now believe that B2C e-commerce, which has gained much popularity lately, will not take off until 2003. The recent collapse of US Internet stocks also has dampened the hopes of investors for an early takeoff since even giants like Amazon.com now face questions of whether they will survive.
In the meantime, B2B will likely establish itself here sooner and overtake B2C.
This scenario probably led to last week's launch of vLinx, a San Francisco-based B2B and door-to-door e-commerce service - with co.- investment
by Hutchison Whampao's Li Ka Shing of Hong Kong - to tap the surplus consumer-goods market of Thailand, Malaysia and China. The Asean market of surplus goods alone is estimated to be worth US$3 billion while the Chinese market is
estimated to be US$10 billion.
The innovative vLinx will allow Thai suppliers of 29 product categories from baby and health care products to jewelry and furniture to reach buyers directly in the US and Canada - where Internet penetration is the highest in the world. Transactions will derive from competitive
bidding that removes the middleman. The US market is currently Thailand's largest export outlet.
In a following stage, vLinx will move into made-to-order goods to be sold at fixed prices. This network provides comprehensive services from banking (including payment guarantees) to buyer verification, insurance,
shipping and delivery just like in traditional international trade.
While the B2B model may thrive ahead of B2C due to favorable factors, other forms of e-commerce still have a good potential here and can converge with B2B. Take Saha Group, Thailand's major producer of consumer goods
for example. It has initiated the business-to-employee (B2E) model that allows the conglomerate to experiment in e-commerce with its 60,000 employees.
The B2E model has its merits in that there can a period of trial and error after which mistakes can be corrected to ensure a better chance of success. In this model, the operator has a good track record of its employees
and their income, so credit risk is relatively low.
The Charoen Pokphand Group is another conglomerate that will likely thrive in this B2E model. More importantly, it controls a network of more than one thousand 7-Eleven convenience stores nation-wide that can serve as the point of delivery for goods and services when it enters deeper into B2C e-commerce in following stages.
Despite its clear benefits, e-commerce will bring a new era of intense competition to Thailand and the region due to cheaper and faster information and transactions. According to US investment bank Goldman Sachs, Asia's
larger economies with Internet-savvy operators should benefit greatly.
A recent Goldman Sachs report shows that South Korea and Australia are leading in the B2B Asia Pacific race, followed by Taiwan, Singapore and Hong Kong. China is emerging while Asean countries, including Thailand,
are lagging behind.
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Middlemen face online crunch; The Nation (Thailand;
by NOPHAKHUN LIMSAMARNPHUN; 07-18-2000
MIDDLEMEN, wholesalers, and agency businesses in Thailand may soon be swept aside by e-commerce trends unless they begin to offer additional value-added and consultant services, according to an executive at IBM Thailand.
Large enterprises have begun to execute e-commerce strategies to combine the strengths of their existing businesses with that of Internet technology, said Jadesada Kraisingkorn, IBM Thailand's country manager for the software solution market.
For middlemen and the like, the future is gloomy if they do not change with the times, Jadesada said. She cited travel agents as an example, saying their businesses may soon disappear as airlines have begun to sell directly
to consumers over the Internet.
"In Japan, you get a 25-per-cent discount when buying tickets from JAL (Japan Airlines) on the Internet. This has displaced the middlemen, who will likely have to find new value-added services to offer.
"Some other businesses may also simply disappear. This is why we see people flood into e-business seminars here. They want to know what the impacts will be on their existing businesses.
"Thai Airways International is aware of this trend. When the time is right, it will happen. It should not be too early or too late. Stockbrokers are another obvious example. They will be extinct unless they make a shift
to new value-added or consulting services."
The ongoing business expansion to the Internet, seemingly inevitable due to economic globalisation trends, should take place at the right pace so everyone has time to prepare and implement their e-commerce plans, she said.
Jadesada recommended that small and medium-sized enterprises (SMEs)buy Web-hosting and related services as the first step to prepare for e-commerce. After building on this foundation, they will eventually be able to carry out e-commerce transactions.
Hampering Thailand's agile private sector, the country's political leadership was reticent about participating in the Internet-based revolution
at the outset, resulting in slower adaptation to the New Economy than in neighboring countries such as Malaysia and Singapore.
"Our leaders have long been aware of the importance of information technology, but they could not (visualize the end results)," she said.
As a result, the country still has a poor online infrastructure that cannot yet fully support e-commerce. The lack of English proficiency among the majority of the population has been another hindrance, she said.
Jadesada said the existence of monopolies, government concessions and other remnants of the Old Economy were also delaying Thailand's adoption of e-commerce.
On the private sector's initiatives, she said large enterprises such as banks and telecoms giants , Siam Cement plc, Saha Group and Charoen Pokphand Group have been executing their plans. They are the key foundations
for the New Economy, as they must serve other enterprises, Jadesada said. Currently, however, their online facilities are not adequate to meet the growing demand for e-services from prospective clients.
For example, as the use of cheques will soon be outdated, some businesses want e-banking and e-settlements without using the traditional cheques, but banks cannot yet serve them due to regulatory hindrances.
Jadesada added that a former cheque-printing company in Malaysia diversified into an Internet-based bill payment service after it had realized that its business would soon disappear.
In Thailand, she said Siam Cement plc, for instance, is implementing its plan that will electronically link all suppliers and distributors/dealers to enable e-commerce, while Saha Group will test the business to-employee market due to its huge workforce of 60.000 .
The Charoen Pokphand Group, meanwhile, has announced business to consumer (B2C) Internet-based plans for its 7/Eleven convenience store chain of more than 1,000 outlets nationwide.
From the Asean perspective, she said Thailand appears to stay in the middle path among 10 Asean countries in terms of ecommerce readiness.
"We have a certain degree of IT readiness and large natural resources whereas Singapore and Malaysia , which have smaller natural resources, are better prepared in terms of infrastructures and personnel," she said,
adding that the Malaysian leadership has had a strong vision on IT for years so they could prepare better for the New Economy
The Asean grouping, which also includes Indonesia, Philippines, Brunei, Laos, Cambodia, Vietnam, and Burma, now has a combined consumer market of 520 million.
She said Asean should find more effective and collective ways to capitalize on its economies of scale in the New Economy.
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