Saha Group, the country's largest consumer products firm, is exploring new e-commerce opportunities in China this year because the economic downturn and political instability have dampened local consumption.
It joined a Chinese partner to find new channels to distribute Thai products in China and elsewhere.
Thai One Mall Co was recently set up with 5 million baht in registered capital to operate an e-commerce business in China in the second half of this year.
Subsidiaries ICC International, Saha Patthanapibul and Saha Patthana Interholdings each hold a 19% stake in the joint venture, while the remaining 43% is held by Tmall.com, a Chinese website that offers Chinese and international brands in mainland China, Hong Kong, Macau and Taiwan.
An executive at Saha Group said chairman Boonsithi Chokwatana decided to expand outside Thailand due to the declining purchasing power and confidence of consumers amid the political crisis.
The group has cut its advertising and promotional budget for some product categories not showing good sales in the first quarter.
It also recently opened a beauty and fashion shop in Paris.
The source said Saha Group is interested in China because the country has a huge population. China is forecast to become the biggest online market in the world over the next few years but its e-commerce sector is still young.
It is estimated China has almost 200 million online shoppers, about three times more than the population of Thailand.
Though many Chinese people shop online, e-commerce penetration is still much lower given its population size. About 13-15% of China's 1.3 billion residents shop online, compared with more than 50% in the US.
"Thailand is one of the most popular destinations for Chinese tourists. Last year, about 4.7 million Chinese people visited Thailand. Therefore, it may not be too difficult to access them via our e-commerce business," the source said.
Online retail sales were about US$121 billion in China in 2011, up 66% from 2010. The market size of Chinese e-commerce is expected to triple over the next three years, with sales reaching $420 billion by 2015, accounting for more than 8% of China’s retail sales.
Saha Group will introduce its online business in China at its fair at Queen Sirikit National Convention Center in June.
Products such as BSC cosmetics and Becky Russell jewellery will be available via Thaionemall.com, Thaionemall.tmall.com and Thaionemall.tmall.hk from the second half of the year.