Business
SE Asian banks slowly giving way to e-payments and payment apps

PHOTO: starbucks.com
That cold, hard cash in your pocket, and the traditional shop-front banks that give it to you, are slowly being phased out and replaced with e-payments.
It’s now expected that traditional banks in South east Asia will miss out on as much as US$5 billion, or 14.3% of their payments revenue by 2025. A report says they are being displaced by the growth of digital payments and competition from non-banks.
This comes as payments become more “instant, invisible and free”, according to professional services firm Accenture in a report “Banking Pulse Survey: Two Ways To Win”.
Banks will face further pressure on income from card transactions and fees over the next six years, with free payments putting 9.6% of payments revenue at risk in the south east Asian region.
In addition, payments completed in a “virtual wallet” on a mobile app or device, will put 3.1% of bank revenues at risk, according to Accenture. This is the case, for example, in Starbucks where you can pay for your complete transaction with your phone using the Starbucks App.
Card displacement by instant payments, where funds are settled and transferred in real time, and banks make little to no interest, is projected to put an additional 1.7% of payment revenues in jeopardy.
Divyesh Vithlani, who leads Accenture’s financial services practice in ASEAN, says that the world of instant, invisible and free payments is here to stay.
“It will squeeze margins further on a business that was already feeling a lot of pressure from new competition, particularly in South east Asia with the proliferation of e-wallets.”
“As payments modernisation has already made a good headway in ASEAN, with the introduction of instant payment schemes in many countries, revenue from the consumer space is already low or near zero, except in the cards space, so the push to find alternate sources of revenue and optimise costs is already an immediate concern here.”
He added that the non-bank payments market is booming, and that there’s a multibillion-dollar opportunity for those willing to invest in new technologies and business models based on the new digital landscape.
Overall, the survey, which polled 240 payments executives from the largest banks across 22 countries, found that the industry is aware of the challenges posed by new technologies in payments.
More than two-thirds (71%) of the banking executives polled in all markets agree that payments are becoming free; nearly three-quarters (73%) believe that most payments are already invisible, or will become so over the next 12 months; and even more (78%) said that payments are either already instant, or will become instant over the next 12 months.
“The digital transformation in payments throughout the region will have a deep impact on all industry players and banks will have to fundamentally change how they think about their revenue in this area.”
“Banks previously earned billions of dollars from some of these channels, and that’ll dry up eventually as competition heats up, so they’ll need to develop new digital business models to compete in this new era.”
SOURCE: Accenture | The Nation
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Thailand
Myanmar cancels Thai investment in the Dawei Special Economic Zone

The Dawei Special Economic Zone Management Committee has announced the cancellation on the deep seaport project contract with Italian-Thai Development (ITD), one of Thailand’s leading industrial firms, by saying that they “lost confidence” in the company after long, controversial issues.
The Dawei Special Economic Zone Management Committee said that the Thai company has caused them “repeated delays, continuing breaches of financial obligations under the contracts and the concessionaires’ failure to confirm their financial capacity to proceed with development”.
They say they will look for new development partners to continue the projects. Currently, there are still no comments from ITD.
The Dawei Special Economic Zone is Myanmar’s initiative to encourage international investments into the country, but the project has been delayed because of funding problems and local opposition.
SOURCE: Thai PBS World
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Business
Future of Thai department stores is being redefined

While department stores have been a familiar destination for Thai people for many decades, CBRE, an international property consultant, is witnessing a decline in popularity and stunted growth, particularly in 2020 when Covid-19 adversely impacted the sector. CBRE believes that to adapt to e-commerce disruption and the changing consumer behaviour, department stores in 2021 (and beyond) will have to fine-tune their business model in terms of customer shopping experience, inventive activities and value-added programmes to continue their status as the second home for Thai shoppers.
Jariya Thumtrongkitkul, Head of Advisory and Transaction Services – Retail, CBRE Thailand explained… “While department stores offer shoppers convenience, saving them time with many varieties of goods grouped in different departments and allowing the shoppers to find and compare products and choose what they want, the traditional department store model does not fit the needs, lifestyle and behaviour of its shoppers anymore, especially the new generations.”
According to CBRE Research, the total retail supply in Bangkok as of Q4 2020 increased to 7.8 million square metres, a 1.16% increase year-on-year. Out of this, only approximately 3% was reported within the department store format. The department store market in Thailand is mainly dominated by two domestic retail giants, with Central Group and The Mall Group holding the largest market shares. They do not only concentrate in Bangkok, but have also opened department stores in many major cities throughout the country which allowed them to build bigger networks and grow their customer base.
In the past few decades, Japanese investors had also shown interest in entering the Thai market and offered local features that are well-known in Japanese department stores: simplicity, premium quality and services. However, with strong competition many Japanese department store operators have ceased their expansion plans. Some have exited the country due to the fierce competition against the local players, their performance in Thailand and the shrinking Japanese department store business, especially in overseas countries.
“The department store concept as a one stop shopping place is still in demand for certain groups of customers. However, with the e-commerce disruption and changing consumer behaviour, department store operators need to adapt their models, offerings and value-added services to their customers to cope with the challenging economic and market conditions.”
Adaptability of department stores can be highlighted into 3 main parts: customer shopping experience, inventive sales and marketing activities, and value-added programmes. While more and more younger generations prefer to shop online to save time and money, the brick-and-mortar store is still believed to be the second home for Thai shoppers. Department stores should be more agile in the era of e-commerce and adopt some technological innovations such as in-store automation and mobile payment solutions to reach the younger crowds.
Design is another aspect that plays an important part in customer shopping experience. Department stores can be more creative in remodelling traditional department store space into some ingenious and interactive space with a great design and right product portfolio mix for their customers.
The Mall Group, for example, has launched its first “Lifestore” concept at The Mall Ngamwongwan at the end of 2020 by redesigning and renovating its traditional department store space to enhance customer shopping experience and enjoyment.
The second part to be considered for the adaptability comprises inventive activities related to sales and marketing. The prices of products being sold in a department store are normally set high to cover the higher establishment and operating costs by operators, narrowing their target to only upper- to high-income customers.
Brand offerings may also no longer meet fast-changing customer needs since today’s shoppers have more choices in buying products online, not to mention the declining footfall due to the growth of e-commerce. CBRE Research has seen domestic players pushing hard to drive sales growth via numerous promotions, marketing campaigns and activities and collaboration with credit card companies during seasonal sales.
The third part consists of value-added programmes such as personal shopper, customer loyalty programme, on-demand solution and service personalisation, which have become a new trend as customers, including the aging population, are now more sophisticated and demanding.
The retail landscape has changed drastically in the past few years from various factors like technological advancement, consumer behaviour and preference as well as Covid-19. Cookie-cutter strategy will be a thing of the past, especially for department stores where the format and offerings have remained the same for decades.
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Coronavirus (Covid-19)
Can Phuket survive? Interview with Bill Barnett | VIDEO

Interview with Bill Barnett from c9Hotelworks. Phuket has now been hit with a 3rd major crisis, each one more profound than the long-term effects from the 2004 tsunami. Now the island has new restrictions imposed on arrivals on the southern island, imposed by the Phuket Provincial Authority.
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