Exclusive: Startups in Thailand optimistic about growth despite pandemic, call for government support
There are hundreds of business startups in various industries in Thailand, with 235 currently listed in the directory of Techsauce, the leading site for tech and business news in Southeast Asia. Many are, however, struggling due to the COVID-19 pandemic. Some have adjusted their business models in response to the changing times or are even hopeful the “new normal” post-pandemic lifestyle will benefit them.
Thailand has no “unicorn” yet, a term used to describe those with at least a billion US dollars in value, and very few have expanded into other countries at a regional level. This could, however, be about to change, according to Oranuch Lerdsuwankij, Techsauce CEO and Co-Founder, and those in the startup sector, believing a unicorn, or a success story, may emerge by the end of this year.
Thai PBS World arranged exclusive interviews with some startup co-founders and executives.
Struggling but hopeful
KnockDoor is among a few Thai startups providing a variety of home services, such as cleaning, plumbing and electrical repair, through online bookings. There are currently more than 700 service providers available on the platform.
With people afraid of having their cleaners and repairmen in their houses during the pandemic, bookings reduced from 50 a day to about 35 last year, and to only 5-10 this year, as the current COVID-19 wave has infected and killed far more people than previous outbreaks.
“Our services have suffered a lot,” said CEO and Co-Founder Wichai Rammaroeng.
The businessman and software developer remains, however, hopeful that his business will recover and even strengthen post-pandemic, especially when the majority of the population have been vaccinated.
“I have a strong belief that the business we’re doing will be here for the long term, since customers still need maids, technicians and someone to provide services in their houses,” he said.
Coping and adapting to the “new normal”
With lockdown measures imposed in several countries, which include restaurant closures and travel restrictions, it is not surprising the hospitality sector has taken a very big hit from the pandemic.
Eatigo, a leading discount restaurant bookings app in Asia, which operates in Thailand, Singapore, Hong Kong, Indonesia, Malaysia, the Philippines, India and South Korea, can still cope, despite substantial drops in the commissions it used to receive from the bookings, especially for hotel buffets, thanks to how lockdown measures in each country have not occurred simultaneously.
“I think pre-COVID, we were doing quite well. We started off in Thailand and Singapore, and we got big rounds of funding coming in,” said Co-Founder and Director Pumin Yuvacharaskul, who called the COVID-19 impact “quite tough for us, because the restaurants were going through the tough time.”
“Luckily for us, at least for Eatigo, because we have so many locations, the timeline that each country goes into lockdown is actually different. It was good that we do have some income from one or two countries even through COVID to keep us going,” he added.
To adapt to the new normal, where food deliveries have become the norm, Eatigo has also launched discounted delivery services, by outsourcing to delivery partners, such as Lalamove and Grab. “We’re bringing 50% discounted food to your home,” he said.
Deliveries now account for 5% percent of Eatigo revenue, but the company is planning to increase that to double digits in a few months.
While planning to continue both dine-in and delivery discounts after the COVID-19 impacts have eased, Mr. Pumin is confident of a quick market recovery. “I think the F&B business will be one of the fastest sectors to rebound,” he added.
For Freshket, a mobile app and web-based platform, which offers 22 categories of food ingredients, for delivery in selected districts in Bangkok, Nonthaburi, Samut Prakan and Pattaya, opening the platform to individuals, instead of just restaurants, has helped compensate for the loss in revenues from restaurants which have been ordered to close or are scaling down their operations.
About 80% of its revenue from restaurants was lost in March 2020, but that was replaced by orders from regular consumers, stocking up on ingredients to cook at home. The same has happened this year, when 50% of revenue was lost from restaurants and was made up by the level of household orders.
Online classes, online concerts: cashing in on the “new normal”
With online classes being the “new normal”, Globish, a language online learning platform, is seen as being ahead of its time, having provided online classes since 2014. With 200 teachers, many of whom are Filipinos, with some Thai nationals, Britons, Americans and Eastern Europeans, the startup began with the English language first, before venturing into Mandarin in May last year.
Nearly 20,000 students have joined the platform so far. Apart from having its main office and operations in Thailand, there is an office in Vietnam, with 10 staff, to accommodate hundreds of Vietnamese students.
Having developed and used its own platform, the classes are both individual and group.
“We got the idea from a Japanese investor. He has worked in Thailand for a long time and wants to help develop the country’s education. We followed the Japanese model, in which English classes are held via Skype. We have adjusted things like the curriculum, to respond to Thai people’s specific needs,” said Co-Founder Chuencheewan Wongsaree.
Unlike many other businesses, the pandemic has not impacted Globish’s performance, with continuous growth over the years and a peak in 2017. Most of its students are of working age and school students. This has changed though, with fewer employed people but three times more school students. The former may be saving up, while the latter were already at home, she said.
Meanwhile, BiggestFan Productions is developing a platform which responds to the new “norm”, offering a concert experience without going out. Not just streaming performances, the platform allows performers and audiences to see and interact with each other, with lower latency than most other apps. Each audience member pops up on the screen, and they can choose up to three friends to see and hear more clearly than others, just like going to a concert with a group of friends.
Founded as recently as June 2020, the startup employs 26 staff, most of whom are software developers. A public test of the platform was conducted in April and the next one is on June the 4th. It is hoping to launch the full service in July.
“Our business model is a post-lockdown business one. It just happened to be that the lockdown was sort of an impetus to give this a try. Everyone being locked down, it’s like okay, definitely people will try it now, and so we just need people to give this experience a chance,” said Benjamin Scherrey, CEO and Co-Founder.
The platform will be available on laptops, tablets and smartphones once it is launched, and it can be used to augment physical events.
Startup landscape in Thailand, calls for government support, and hopes for a unicorn?
Most of the startups are looking for a way to tread water through this time of the pandemic, instead of growing, like they should, said Mr. Pumin. “Whoever makes it at the end of COVID will be in a really good position.”
Urging the government to make it easier for foreign investors to get into Thai startups and make Thailand more attractive to them, the Eatigo executive feels that, currently, Singapore and Vietnam are the most attractive in the region and that a better funding landscape would lead to a growing startup landscape here as well.
According to Mr. Wichai, the government needs to provide more support to Thai startups. He cited an example of Traveloka, an online platform for flight and hotel bookings, which has become a unicorn thanks, in part, to the Indonesian government’s promotion of the platform.
Calling startups “groups of people who are pushing for something new” and should be supported, Freshket CEO and Co-Founder Ponglada Paniangwet said “This will be good for the country. There should be a structure to support them.”
Apart from government support, Ms. Ponglada also urged for knowledge sharing, by those who have become successful, and for strengthening of the startup community. She said the stage of the business is also an important factor in government support.
There are still too few startups in Thailand and it will be very difficult to become a unicorn, if a startup remains domestic, said Ms. Chuencheewan, adding that it is not necessary to become a “unicorn” “If a product has value, the business will live on.”
“A challenge for Thailand is human capital,” she said, pointing to how, without good business management, experience and understanding of the market, a startup may not be successful, even with government support.
“The government has provided a lot of support, but mainly at the early stage. For bigger startups, the forms of support change and may be less,” she added.
On the other hand, Scherrey called Thailand’s Board of Investment listing of BiggestFan a “very positive thing Thailand has done to attract direct foreign investment.”
By Hathai Techakitteranun