As Internet access only reached the Thai masses after the introduction of the smartphone, Siam has a very different online landscape compared to the West. Online sales caught on relatively recently, but in a very remarkable way. Massive volume isn’t generated in online stores, but on Facebook. Why is that and what dangers does it imply?
When internet access became available in Thailand in 1996, mainstream adoption needed to wait for the smartphone. While most European and American families owned a personal computer long before the Internet even existed, this was not the case for Thai families. With the middle class only starting to grow fairly recently, the average Thai household did not have the need nor the budget to afford such a device. For quite long, internet access was scarce and limited to Internet shops. For that reason, online shopping simply wasn’t convenient.
When 3G and unmetered broadband were introduced in Thailand around 2005, explosive growth of connectivity followed. Access was suddenly available at high speeds, using a cheaper device. As a result, the masses stormed online.
Instantaneous affordable broadband availability had two consequences that would significantly impact Thai internet usage and online future. First of all, it was mainly app based. By the time the Thai public connected, Facebook was well-established. It became the Thai online operating system, next to apps like Line. Secondly, the absence of online access had meant that Thai entrepreneurs had had no reason to start developing online stores. With the disposable income only slowly growing, the incentive to do so only picked up at the same pace, after 2005.
Traditional foreign online retailers initially did not show significant interest in the Thai market for that very same reason. Only in 2013, JP Morgan-backed German Rocket Internet launched Lazada (an Amazon clone) and Zalora (sister to European Zalando). While Thai adoption of these business models seems slow, their growing success is illustrated by the fact that they have since been bought by the Alibaba and Central Groups, respectively.
In spite of not being completely absorbed by corporate initiatives, the Thai demand for online purchases did exist and took the net by storm in a very unexpected way. Micro-entrepreneurs started selling goods by simply posting them on Facebook. This 21st century low-tech approach got initial traction about two years ago. Social entrepreneurs in my personal circle suddenly featured so many commercial posts that I had to unfollow them to save my newsfeed. Without a doubt, this was one of the contributing factors to the recently reviewed Facebook algorithm.
The most frequently sold products seemed to be dietary products, cosmetics, fitness products, clothing and handbags. Timelines got even more clogged when Facebook launched live streaming video. Salesmen posted long video demonstrations, auctions and even lewd promotional videos.
Sadly, spamming and scantily dressed women aren’t the only shadows cast on this practice. Not only do many of the products (like the popular skin whitening products) have a shady origin and unverified side-effects, dangerous strategies might be in effect behind the scenes. Many of the sellers are actively recruiting sales people to operate under their wings. With potential revenue often illustrated with wads of cash, gold jewelry offered as sales incentives and well-crafted marketing material available, I have my suspicions that pyramid schemes might be involved.
The potential of online shopping clearly there, I look forward to seeing where this leads to. I have a dark suspicion that government intervention is looming.