What to Consider Before Doing Business in Thailand

Business in Thailand

Tapp’s business expansion lead Heini Saari writes on her experiences in Thailand. This is the first blog out of three covering different aspects of doing business in this fascinating Southeast Asian nation. 


Located in the middle of Southeast Asia, Bangkok is a regional hub for start-ups. Thailand is a country full of opportunities and we have found it to be one of the most potential markets to expand our business. Low corruption, strategic location in Southeast Asia and high smartphone penetration are just few reasons to expand mobile marketplace to Thailand.

End of last year we made our decision to enter Thai market and now we are getting close to launch. Leading our market expansion, I’ve had opportunity to make a deep dive into Thai start-up scene. To avoid trouble, I feel that the following phases are the most important ones in the beginning of the journey.

 

Do your homework and visit the market

First you need to check how your existing business model will fit into the market. How much competition there will be and what are the pain points your target customers are facing. Are you solving their problems? Demographics have been the first starting point for us. Share of unbanked, GDP and smartphone penetration being one of the most important metrics.

Even though you can find a lot of information from internet it won’t be enough. After you have a hunch that you could be successful in the market, you need to book tickets and experience it yourself. To evaluate whether to enter the market it is important to feel the environment and see the problems of your target customers with your own eyes. Consultant or agency can conduct market and feasibility studies, but to get the most out of the results and understand your customers you need to be there yourself. You know your product better than any consultant, but they might offer you fresh view to look at things and offer you valuable market insights.

Our competitive edge comes from doing things differently. We don’t believe that we can change the consumer behavior, cash is still preferred way to pay your daily purchases in Thailand. We are offering a real alternative to cash-on-delivery payments.

 

Learn about the legal environment

If you have done your homework well, you already should have knowledge about the legal environment in the country. We discussed with lawyers and local executives, and visited Bank of Thailand and Board of Investment to understand what is needed from us to be able to operate in Thailand.

There are strict investment regulations in the country, and this might feel like a barrier to enter the market. However, you can receive support from the government. Thailand supports foreign investment and welcomes foreign companies if they see that the company’s business model is beneficial for the local economy. Our business model supports micro entrepreneurs who are acting as our sales agents. Instead of large chains, Tapp is empowering the local entrepreneurs, e.g. small shop owners in rural areas.

Board of Investment (BOI) is the government agency who can promote your market entry and remove the barriers. Before being able to incorporate in Thailand we needed a certificate from BOI. We found working with their application easy and process was smooth. We visited them three times before and during the application period discussing about our business model, and received approval ahead of time.

Good local lawyer is a great help. Setting up a company and applying for relevant licences and BOI certification is possible to do by yourself, but to make sure everything goes smoothly it is good to work with a lawyer.

 

Network

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Find help from someone who has been there longer than you. Here a good consultant with existing network is a great help. Our first trips to Bangkok were full of meetings with authorities, potential business partners and interesting companies our consultant had arranged us. We did not end up collaborating with many of them, at least for now, but we did learn a lot from them. From these meetings half a year ago I’m still introduced to new contacts who have heard about us from people we have been meeting back then.

 

Find the right people

To be able to sell to locals, you need to know the locals and you need to have local employees. One of the advantages of doing business in Thailand is the talented candidates you can find for key positions in tech start-ups.

When hiring the country manager to our soon to be established subsidiary we wanted to have a local superstar to lead the show, and luckily we found her. To build a sales agent network, highly skilled field sales is needed, and expat could not lead the team as well as local. In the beginning we are keeping the organization lean, everyone needs to know how to sell, and they need to do this in Thai language. 

LinkedIn is a good tool to find professionals to lead mobile commerce start-up in Thailand. We discussed with recruitment agencies as well, but in the end found the right candidate ourselves. Our new country manager Nicky Surapaitoon is a perfect match. She is highly skilled, and has a vast experience from the tech field.

 

Be present

bangkok-market

Even though locals are the force to drive the business further and scale within the country, don’t underestimate the importance of your own presence. It is important to be part of the local team when this team will be part of a global team.

After traveling back and forth between Finland and Thailand during the first half of the year I had the opportunity to stay in Bangkok for one month with my family. Living, eating, shopping and spending my weekends like locals offered better opportunity to explore the market than staying in five-star hotel and packing my days full with business meetings and networking dinners. Sure networking is super important, but you need to see the real life as well.

You might be questioning why to see the effort if you have local employees there. You can observe the world around you from different perspective as foreigner and come up with innovative ideas. Feel, taste, smell and hear the life around you. Otherwise you just can’t understand. 

 

Heini Saari is leading Tapp Commerce’s market expansion to Thailand. She loves exploring new countries & cultures, and thinks she has the best job in Finland. Follow Heini on Twitter.


This was Heini’s first blog out of three covering different aspects of doing business in Thailand. Her next blog will be on creating value for micro-entrepreneurs. Stay tuned!