Siam Commercial Bank (SCB) and China's e-commerce giant JD.com have jointly launched an e-commerce platform to open more opportunities for Thai small-business operators to access the Chinese market.
The soft launch of the platform in mainland China began at the end of last year. There are five Thai brands with about 40 items available on the digital platform, said Manop Sangiambut, executive vice-president for China business.
Local brands are expected to increase to 20 by the end of this year, he said.
SCB, the country's fourth-largest lender by assets, is in talks with Alibaba's online marketplace and Tmall.com to join its Chinese e-commerce platform, Mr Manop said.
Negotiations are expected to be completed soon. The bank plans to launch the SCB China e-commerce platform in the next two months.
SCB wants to increase the number of its Chinese e-commerce platform partners to four or five and local brands to 200.
Local products with potential are healthcare, spa and skincare, baby and mother products, food and beverage, and light fashion and accessories, Mr Manop said.
"Online vendors have better business potential and manage to deliver higher sales growth than the method of business matching between Thai and Chinese business operators," he said.
Customers who want to sell products on SCB's e-commerce platform must meet the bank's requirements, and their products should be well-known with premium quality.
Clients need to have a good track record and annual sales of at least 50 million baht. Preference is given if they have never entered the Chinese market before but have a passion to make a foray into China and are willing to do consignments.
The bank is ready to support these customers in terms of product development, branding, marketing and financial assistance.
Mr Manop said the bank charges a monthly fee to online merchants and shares the profit based on sales derived from the e-commerce platform.
The SCB China e-commerce platform is shown on a mobile screen.
Supporting customers entering the Chinese market via the digital channel is a key objective of the service. For customers who manage to expand their business, the bank will also earn fee-based income from the digital service as a new income source.
Meanwhile, SCB sees no need to revise its Chinese business plan this year, Mr Manop said.
He said the coronavirus pandemic could create greater opportunities for Thailand to capitalise on the expected acceleration of Chinese outbound investment.
Even though some details are likely to change in line with the situation, the bank's Chinese business plan remains unchanged overall.
Despite the outbreak, China's direct investment in Thailand has showed no sign of slowing since the beginning of this year, Mr Manop said. The outbreak in the mainland has also shown signs of coming under control.
"The pandemic will encourage Chinese investors to diversify risks, focusing more on outbound investment," he said. "The Asean market is still a key destination for Chinese investors."
Thailand's total foreign direct investment amounted to 506 billion baht last year, while China overtook Japan as the biggest foreign investor in Thailand at 262 billion baht, up 50 billion baht from 2018. China is expected to maintain this foothold for the next 3-5 years.
For Chinese inbound investment, SCB largely concentrates on Chinese listed companies and state-owned enterprises in the manufacturing and building and construction sectors, in line with Thailand's Eastern Economic Corridor scheme.
