Thailand’s growing economy holds enormous promise for startups due to its strategic location and low-cost labour. But navigating the Thai market for unlocking this promise isn’t easy. It’s because more than any other global region, Thailand represents a grouping of economically, culturally, and commercially distinct regions. Investors and entrepreneurs alike need to consider the localization paradox facing startups in Thailand.
Thailand has made its mark globally both in terms of an attractive tourist destination as well as a profitable business setting. Overseas investors have proved this and attest to the success of setting up businesses in Thailand.
Starting a business in Thailand is always a difficult prospect. How do startups in Thailand overcome the hardships? Here’s a guide to staking a claim for Thailand’s startup success stories.
Ensuring a positive relationship with other Thai businesses is crucial to launching a startup in Thailand. However, for a startup to then grow its market, especially considering its limited resources, it’s imperious to leverage local Thai businesses rather than building everything in-house. Partnerships enable rapid market growth and enable startups to roll out products and services faster and more efficiently. Contrarywise this, building in-house is often more expensive and takes longer.
Developing and maintaining partnerships is particularly valuable in Thailand given its diversity as a region. Startups should partner with consulting firms in Thailand as well as local companies. A partnership success story worth mentioning is the partnership between Lalamove – a Hong Kong-based logistics startup and Line – a popular chat app in Thailand in 2016. Combining forces to create LINEMAN, Line used Lalamove’s delivery network for its entry into the delivery business, while Lalamove leveraged Line’s Thai user’s network of over 30 million for scaling into the Thai market.
Engaging With Thai Regulators
Each time a company enters or rolls out a new service in Thailand, it should initiate and engage in a proper dialogue with Thai regulators in advance. One of the key benefits of engaging early is it enables startups with an opportunity to build trust with Thai regulators. The difference between a successful startup and failed business model in Thailand could very well boil down to mutual understanding and transparency with Thai regulators–to the trust that the technology it uses is secure, that the startup promotes the best interests of Thai consumers, and that the startup’s goals and objectives are aligned with Thailand’s national objectives.
The foremost lesson for an existing startup in Thailand is to expand early–to activate and develop a market expansion strategy from its onset instead of waiting to scale and becoming entrenched in a single region in Thailand. The reason this factor is critical is because the experience of a startup scaling in Thailand is particularly determined by the rate it expanded across multiple regions, its relationship with Thai regulators and partner network, and its product development. E-commerce giant Lazada and transportation services app Grab are two key examples of businesses adopting the mindset of scaling from day one.
Early expansion doesn’t mean startups should expand throughout Thailand and nearby countries without proper market research. As mentioned above, localization holds the key in Thailand. Thailand market research firms can help you with this regard as each country contains its own consumer habits, consumer spending power and other market nuances.
Particularly for startups based in Thailand with fewer resources and capital, it’s imperative to be capital-efficient and ensure you get the optimal return for each dollar you spend. With this in mind, selecting the right market strategy in Thailand for early expansion will have reaching implications with scalable company growth.
Adaptability of Products/Services
While early expansion and having a dialogue with regulators and partners is crucial for scaling across Thailand, startups in Thailand can’t afford to lose focus on the development of their core offerings, and adaptation of those offerings in the Thai market. Often, businesses that are focused on a particular country for several years, take product development lightly and don’t have the budget and time for investing to differentiate their product experience in the Thai market.
Investing In Talent
The next success factor surrounds experienced talent, which is hard to find in Thailand. When a startup wishes to expand or start a business in Thailand, it is imperative to invest in robust senior talent. A leader who would manage the Thai market is very crucial, needs to be culturally sensitive, understands the business model thoroughly, and be watchful enough to learn from the Thai market and respond accordingly.
While employees have their influence over the execution of the overall company’s vision, it’s still the company’s vision at the end of the day. It implies when hiring the initial members of the team, a startup in Thailand needs to look for people demonstrating a clear understanding of its vision and having ideas that would help the business. A startup must have people who understand its purpose, its customers, and how to make the vision of the startup a reality.
Finally, you have a business in Thailand with the finest product line, still, people aren’t buying? Probably you haven’t done enough market search or selected the right niche very carefully to meet audience requirements. Reaching out to potential customers towards your business entails persistent efforts in marketing. If you’re starting a business in Thailand, you would need the help of Thailand market research firms that helps you in focusing on the overall process of providing customer service, choosing the right niche, delivering a message to the right audience, and promoting the niche in Thai market.
Marketing your business in Thailand is an art form in itself. Thailand is becoming more heterogeneous, but the foundations of its culture won’t budge for anything: Thailand’s traditions, humour, protocols, discourses, are unchanging and at times stubbornly unaccommodating. Hence, the identity of your product offerings needs to seamlessly fashion itself. Cultural sensitivity and sympathetic protocol are of paramount importance for marketing in Thailand. The intricacies of its beliefs can make or break your business.
When setting up a company in Thailand, it’s tough to do everything right and avoid any mistakes. There’s much work to be done, several KPIs to keep track of, and limited helping hands. In addition, you need to be aware of external forces beyond your control.
There’s no guarantee that a startup would succeed, but with a robust strategy built upon the above success factors, there’s a fighting chance that the startup’s idea might succeed. Startups that approach their business strategically without leaving anything to chance, generally stay in business longer and achieve scalability faster.
The Thai economy is ripe for disruption and the country is emerging as a mecca for both overseas and local startups with the Thai government concerted efforts of redirecting the country’s economy to a tech-based economy from an agriculture-based economy.