ICT distributor VST ECS Thailand is tapping into the local authority market where IT solutions can serve its specific projects as part of a new push for growth amid a decline in consumer demand and economic headwinds.
"With the high inflation that affects consumer sentiment, the country's IT product sales for the consumer segment are expected to drop 4-5% in 2022," said Somsak Pejthaveeporndej, chief executive of VST ECS Thailand, a subsidiary of Hong Kong-listed VST ECS Group.
However, sales to commercial and corporate groups are expected to grow 12-15% this year, thanks to the trend of business transformation and upcoming mega projects, such as One Bangkok real estate scheme, he said.
The supply shortage is unlikely to be an issue from the third quarter, he said. Demand is expected to pick up in the fourth quarter, which is a peak season for IT products.
VST ECS Thailand has provided assistance for dealers to assure their cash flow while keeping a close watch on the prospect of bad debt.
According to Mr Somsak, the economic woes make it more difficult for small and medium-sized enterprises (SMEs) to access sources of funds while the weaker baht also affects importers.
Measures should be ushered in to intervene with the exchange rate, he said.
He said the company sees an opportunity in project-based solutions for provincial administrative organisations, municipalities, city municipalities as well as the Bangkok Metropolitan Administration.
"Local authorities have their own budget from local earnings but they mostly invest only in physical infrastructure, such as roads. We see that IT can play a role in enhancing their efficiency and improve their cities to have better living conditions," Mr Somsak said.
The IT sector, he said, can share 10% of its total budget spending or 74 billion baht with 40 provinces, he said.
A variety of solutions can be offered to them with dealers designated to engage with the local authorities, he said.
The company is supporting "device as a service" for customers, but the business also needs risk management.
The firm is also distributing Kavallo and Super Soco electric motorcycles as part of its business diversification strategy beyond IT products.
Electric vehicle (EV) is a growing area in response to the global sustainability trend.
By the end of this year, the company expects to see revenue reach 34 billion baht, up 10-12% year-on-year, with the commercial sector sharing 55% of the firm's revenue and the consumer segment sharing the remainder, unlike last year when the opposite was the case, with the consumer segment accounting for 55%.
"In 2023, the economic situation is expected to improve, which could drive our revenue to grow 10-15%," said Mr Somsak.
