Internet users up 50 percent, Silicon Valley leaders to visit
Internet penetration has risen 50 percent in Thailand in just over two years, and e-commerce is projected to increase 17 percent this year as a group of venture capitalists from Silicon Valley announced they will visit Thailand as part of a tour of the region during which they will be searching for promising start-ups in which to invest.
“Leading Thai companies are getting into the digital game. To understand why, look no further than mobile penetration, which now stands at 149 percent. Internet penetration has reached 54 percent of the Thai population, almost a 50 percent increase since January 2014,” according to research by the Boston Consulting Group.
The Group cited Siam Commercial Bank as a positive example of companies going digital. The bank is pursuing a digital banking transformation strategy by launching e-payment and mobile payment systems and investing heavily in digital technology to gain greater insights into customer needs and the ability to tailor web-solutions for what they need.
In addition, the Boston Group said the “government and the Bank of Thailand have also played an important role in facilitating the digital transformation. The central bank is supporting the creation of a nationwide electronic payment system, including the “Any ID” payment infrastructure, as well as promoting debit card usage for payments and transfers of welfare benefits.”
Thailand’s government has set a policy goal of fostering a shift towards a digital and innovation economy so that the country can raise its levels of competitiveness and escape the middle-income trap that ensnares many nations that depend upon manufacturing and exports to fuel growth. More emphasis is being placed on STEM (science, technology, engineering and mathematics) education, and the government recently initiated a $570 million fund to support start-ups, with a focus on technology startups. The fund is overseen by the Ministry of Finance and the Ministry of Information and Communication Technology.
In addition, state-owned Krung Thai bank and SME Bank will provide a combined $170 million in seed money for investment in promising start-ups while also seeking funding from overseas and domestic venture capitalists, private equity trusts, individuals and companies.
To that end, they will be angling to meet a group of venture capitalists from Silicon Valley in California who will soon tour Southeast Asia, including Thailand, in search of promising new technology startups in which to pour their financial war-chests, according to The Nation, an English-language newspaper in Thailand.
According to Google, Southeast Asia has the world’s highest growth rate of Internet users, with more than 120,000 new users added every day.
The Nation said that Thailand regards technology startups as a new growth engine for the economy, but work needs to be done by the government on developing an ecosystem that will nurture startups.
To help build that ecosystem, the finance ministry is considering tax exemption on capital gains and dividends for venture capitalists, private equity trusts along with individuals and companies that invest in venture capital and private equity funds that support technology startups and businesses.