A country known as the Land of Smiles, Thailand is definitely the place to visit as a tourist for its friendly hospitable people, beautiful beaches, spas, scenic and cultural attractions. But as a tech ecosystem and business hub, how does Thailand work? What are the unique features and challenges of Thailand that local startups face?
To answer these questions, I took the opportunity to speak with the various local startups at the recent Echelon Thailand event in Nov 2015, which was held in Bangkok.
Market gaps and entrepreneurs-at-work
So what are the interesting market gaps in Thailand? And how have entrepreneurs come to address these issues?
In education, Charn Manawanitjarern, who hails from the capital Bangkok, claims that the education standards is among the worst in ASEAN. “Thais read less and less every year and our children are less interested in academic subjects. Poor quality of education system, sub-standard teaching professionals, and inadequate infrastructure all contribute to the country’s education problem.”
To energise students to learn, he founded Taamkru, a testing app platform which makes learning fun for children and allows parents / educators to track their children’s performance in real time. Taamkru also offers comprehensive testing platform to schools with over one million questions in its data banks.
Jens Pold, an Estonian who lived in Thailand in the last ten years, discovered a large expectations gap between employers and qualified talent. “Currently, Thailand has the second highest rate of job turnover in the world for young professionals.
Millennials in Thailand are not receiving adequate coaching in regards to career planning so once they graduate from universities, there is feeling of panic and the urgency to get quickly employed, which ends up landing a job not suiting unique skills or areas of passion. Companies, on the other hand, feel let down as they spend resources on training new employees only for them to leave soon after, resulting in the candidates not being able to move forward with their careers and to develop professionally.”
Pold co-founded Jobnisit, a career development portal that aims to provide better career opportunities for millennials in Thailand, by matching them with relevant job positions through an industry-leading algorithm called NisitMatch. Jobnisit makes finding the right career less of a rocket science, while also bringing transparency to workplace with company insights and reviews.
Jeratch Tongjitti, (Jay for short), a local Thai, talks about the eating habits of Thais. “People eat more than three times a day in Thailand, unlike Europe which I lived in some time ago. There are food stores and street vendors of many varieties everywhere in town 24/7 which serves the Thai penchant for eating.
The taste of the food is key: people are willing to queue up and wait for hours to eat at their favourite restaurant. As long as there is good food, people will come, regardless of distance.” At the same note, she also found that there were aspiring chefs who love to cook and share their delicious creations with others.
She founded Jaysource, an online Home-cooking platform, which gives everyone that loves to cook to have their own restaurant online and sell their yummy food to other people.
Vladyslav Grankin, who hails from Ukraine, found a lot of empty vacation property like luxury villas in the cities of Phuket and Samui owned by a diversity of nationalities who do not live in Thailand and have limited access to property management services. At the same time, there were many tourists visiting these cities and wanted a 5-star value-for-money experience.
Grankin is CEO of Phuket-based Villacarte, a property and vacation management platform to address both needs. To date, Villacarte, and its sister associate Bizphuket, have 700 over premium and luxury villas in Phuket, more than international competitors like Travelmob, Homeaway or Airbnb. On top of assisting to rent the villas, Villacarte provides a range of services to well-off tourists from nannies to drivers to assist the tourists during their stay.
Newton Poole, who grew up in Thailand till 13 and recently returned, explains Thais are generally conservative. As a result, individuals may not always express themselves publicly. But on social media, give them a channel in which they can express themselves from a device, and you will find amazing engagement in online communities, social channels and chatting platforms.
Knowing these points and adapting a business model that is socially engaging is critical. He thus founded Saner to take advantage of this unique trait. “Saner means offer in Thai and we are an online deals site, but without the discounts.
Instead, we let our users to make offers based on how much they are willing to pay for a deal or product. This happens all in the form of a blind bidding process where users compete against each other but do not see what each other is bidding. This makes it a fun yet different unique selling point.”
Piti Julkhananukit, who prides himself 100% Thai, found the Thailand market fragmented in the Video-on-demand market. He is Partner and CMO of OTV, a wholesaler for premium VDO on-demand. He found audiences would like to watch content in time shift mode and they want it for free. Thus, creating an advertisement supported video-on-demand (AVOD) platform is the best fit for Thai people as it is free. And he has a lot to be proud for, with OTV having 14 million users, being the second largest AVOD platform in Thailand after Youtube.
In terms of consumer behaviour, Charn of Taamkru is amazed about “how far people would go to get stuff for free in Thailand. The concept of spending money to save time does not exist among Thai digital consumers. They would rather wait, put a lot of effort, and do whatever it takes to be able to boast to their friends or colleagues that they got the best deal on the planet. We are so used to pirated music or movies that paying for digital content, especially in non-gaming category, sounds like a foreign concept.
Unlike other more developed countries where online payment and in-app purchase is a universally accepted transaction, Thai consumers still think twice before making the decision to pay. This can be tough if the only source of revenue relies mainly on selling digital content.”
This mindset challenges businesses that want upfront payment from users in Thailand. It took Taamkru quite some time to figure out the best way to generate revenue from these users in a sustainable fashion.
Vladyslav Grankin finds it difficult to obtain qualified labor force locally in Phuket where is he based at. Another challenge is the internet connection. There is no 4G unlimited packages and the ground internet is unstable and slow.
Newton Poole feels it is hard to stand out and get seen, especially when seeking investment. He feels Thailand is in a startup bubble, with many new startups cropping up, so it is hard to stand out.
“Getting people to understand new concepts in Thailand is hard, and takes a lot of time and money to educate those who are foreign to new ways of doing things.
Job loyalty is also a major issue; from the many companies I worked in, I have noticed it is the norm in Thailand for people just not to turn up and go work somewhere else. I have experienced this first hand with my startup Saner.”
Jens Pold concurs on the issue of job loyalty and mindset changes. “Recruiting is becoming one of the largest economic challenges in Thailand, therefore most modern Thai companies see great advantages of using our recruitment services along with our dynamic western approach & way of thinking.
However, there still is a number of more traditional large enterprises who at first approach are resisting innovation and utilisation of more effective solutions to recruitment. They tend to require more time to adapt new ideas and solutions, yet it is essential for them to change this mindset due to the increasingly more globalised marketplace and business environment in Thailand.”
Piti Julkhananukit felt Thai businesses are still very much traditional in nature and fixated on conventional business models. He laments that his “advertisers at OTV still put a big amount of money to TV where it couldn’t tell who is the real audience while spending a small amount on digital platforms which have a more effective yield.”
Advice to startups in Thailand
Jens Pold of Jobnisit advises on talent. “Make sure you have the right team in place, with each team member having both unique skills as well as a passion to learn more. Startups should place priority on recruiting skilled professionals in order to thrive and build a strong foundation for long-term growth and competitive sustainability.
With a rising number of interesting and innovative startups in each industry competing for the limited talent pool, it is essential to stand out with a strong employer brand in order to attract and retain the brightest of talent.”
Poole of Saner says, “branding and good marketing is key. In addition, a business should be socially active online and offline.” He advises startups to monitor Pantip.com, Thailand’s number 1 social & gossip forum for reviews on everything.
Jay of Jaysource feels that “you should be hungry all the time for information and not to be scared to explain your fantastic ideas to others. Believe me they won’t copy you. The more people you ask the wiser you get with your business, and be flexible all time.”
Piti Julkhananukit of OTV has this advice for those creating IP. “Thailand is a big competitive market with an existing entrepreneur culture. You must have a strong business model and comprehensive intellectual property to succeed. Piracy and copyright is still the big issue here.
Secondly, you must understand consumer behavior here in Thailand. Thai local culture is very complex. They are easily adaptive to new things which is a benefit but it could also mean you be easily left behind when new ideas come.”
From the conversations I had with startups here, it seems Thailand is frothing with many humps and hurdles of talent retention, traditional mindset changes and convincing consumers to pay for digital products.
But one good thing I find is that it has not deterred entrepreneurs from building their startups. They have shown that being well versed in understanding the local market culture and consumer behaviour is key to developing a successful business, and that would be the key takeaway when building a startup in Thailand.
This article is the second of the ‘Through local eyes’ Series, where local startups give their take on Asian ecosystems.
This article first appeared on Tech in Asia.