Tarad looks to tcc for survival bangkok post tech b tree database management system

TCC group’s planned acquisition of tarad.Com signals the accelerating consolidation of thailand’s hyper-competitive e-commerce market, which up to now was controlled by chinese online retail titans.

"We have been looking for a strategic partner since the end of last year, as the local e-marketplace faces stiff competition from global and regional operators," said pawoot pongvitayapanu, the founder and sole owner of tarad.Com.

Mr pawoot, who is also president of the thai E-commerce association, declined to disclose the names of additional strategic partners, saying the details would be announced at a press conference next tuesday.

Jarit sidhu, country manager of IT research firm IDC thailand, said: "only three or four e-marketplace platforms will survive the intense competition."

Businesses need

TCC group’s strong financials, conglomerate nature and extensive countrywide retail and logistics networks will complement tarad.Com’s offerings, mr jarit said.

"Digital commerce is another void in their portfolio," mr jarit said. "TCC, as a giant thai conglomerate, will arm tarad.Com with a strong SME database and knowledge of local needs in order to fight overseas internet giants like alibaba, shopee and 11street."

With amazon looming, small players will have a hard time competing where existing e-commerce giants already have a foothold, he said. These companies have huge marketing budgets and strong logistics capabilities, which lets them offer promotions and last-mile delivery.Jarit said

"E-commerce businesses need to know local markets well," mr jarit said. "For example, japan’s rakuten, which succeeded in many markets, sold back its shares to tarad.Com after taking a majority stake."

Tarad.Com can play a role beyond the e-marketplace. The company can become an e-commerce enabler that offers tools and services like logistics and payment to smes, instead of relying on commission fees.

"Mr pawoot invested in e-infrastructure that provides local startups with logistics and payment solutions to complement their tarad.Com businesses," mr jarit said.

Somwang luangphaiboonsri, secretary of the thai E-commerce association, said the deal will strengthen local e-commerce operators.Jarit said TCC has strong retail channels nationwide, unlike central, which signed a joint venture with china’s JD.Com and mainly operates in big cities.

Worawoot ounjai, the e-commerce pioneer who sold office supply retailer officemate to central group, said the deal will intensify competition in the market.

Money alone is not enough to compete with global e-commerce operators, he said, and e-commerce businesses need know-how and awareness of the total ecosystem. An uphill battle for locals

Tom srivorakul, co-CEO of acommerce thailand, said tarad is the first thai e-commerce platform. Support from a big group like TCC may help tarad remain competitive in an increasingly crowded market.Jarit said

Every conglomerate and multinational corporation will need to go through a digital transformation. "E-commerce and logistics are only the beginning," mr tom said.

He said 90% of the recent mergers and acquisitions and investment coming into southeast asia have been financed by aggressive chinese tech giants and foreign groups.

"TCC’s investment in tarad is a good defensive move, but will it be big enough to fend off alibaba, JD, line, tencent, ebay, amazon, facebook and google? B2C (business-to-consumer) is going to be a very difficult and capital-intensive battle to fight," mr tom said.

There are many indications that B2B (business-to-business) e-commerce will be the next battleground.Digital transformation B2B, however, is better suited to and more defensible for local players, mr tom said.

But there are few remaining digital companies in southeast asia of a certain scale or size that can be acquired to really make an impact towards digital transformation within any corporation, he said.