Thailand’s conglomerate the Charoen Pokphand Group today announced that it will acquire Hong Kong-based e-commerce platform Chilindo for USD 18 million via its digital arm Ascend Commerce, Reuters reported.
With the acquisition, it will complement its online marketplace WeMall to help develop Thailand’s e-commerce market during the pandemic, said chief executive Suphachai Chearavanont.
Launched in 2013, Chilindo is a popular e-commerce auctions platform in Thailand that allows users to place bids and pay the price for products covering fashion and accessories, home and garden products, family and kids, electronics and gadgets, among others.
It uses a pure auction model where all products start from just THB 1 (USD 0.03). There’s no reserve price, that is, the lowest price the seller is willing to accept for an item.
It’s able to offer cheap products because of a consumer-to-manufacturer model, that is, it cuts out the middlemen by shipping goods straight from the factory to the doorstep.
The company says it’s currently serving over 15 million customers and delivering more than 900,000 orders monthly.
It is up against rivals such as Alibaba’s Lazada, Sea’s Shopee, and JD Central, a joint venture between Thai’s Central Group and China’s e-commerce giant JD.com.
According to J.P.Morgan, the online shopping sector, taking up just 0.8% of the total retail market, is valued at USD 26.2 billion in the country.
Considered as a mobile-first country, the mobile commerce market is the dominant e-commerce sales channel in Thailand, accounting for 52% of all online transactions, the report said. It also noted that the USD 13.6 billion worth market is expected to grow by 16.4% at a compound annual growth rate and generate USD 25 billion in annual sales by 2021.
CP Group owns Thailand’s telco operator True Corporation, which won 5G licenses in February. True Corporation recently formed a partnership with China’s telco company ZTE Corporation to build a commercial 5G network in Thailand. With its 5G internet, it could help with the rise of mobile commerce.
“Chilindo’s plan to enter the international e-commerce market will increase the ability of Thai e-commerce brands to compete on an international level,” Chearavanont said.
This article first appeared in Tech in Asia.