Research Background

CHAPTER 1 : INTRODUCTION

1.1 Research Background

In the past, presenting products both domestically and internationally had to use print media such as catalogs, brochures and various forms of advertising and it make high cost. It is time-consuming to revise the catalog information to improve the products, nowadays, electronic commerce or E-commerce can be presented in the form of online catalogs or online shop, which helps to reduce the time for updating the information. (Kimaporn, Suranart, and Thanita, 2013) E-commerce came to Thailand around 1970 by using an internet on Government process, such as sent an e-mail or document, they develop an internet and create media to disseminate knowledge on the internet. Start with website of the Ministry of Science (www.nectce.or.th). Next period is when the internet is becoming popular, people are getting to know the internet better than in the past. Including, becoming very interested in the internet because it was during the time that various schools began to use the internet as a medium of instruction and infiltrate into various studies. The last is the current range, there is a completely competitive range, which is the start of fierce competition and the era in which the government has been involved. The Ministry of Commerce started to push for businesses that want to build stores via the internet to have more ways to create under the name “Electronic Commerce” or “E-commerce”. There are many entrepreneurs supporting it because an online business can make huge profits for their business.

There are many methods of technology used by humans to communicate. One of them is that social media is a way for people can communicate with each other all the times, leading to make business through social networks or E-commerce businesses. It can also be called as the online shopping platform. The term online shopping platform is like the way the business connects with customers might in the form of websites or applications. E-commerce grow up because of the increasing demand for customers to buy products at all times, in every location. The spending behavior of Thai people changes according to society and various values occurs within the society. Found that online trading tends to expand rapidly from Thai people prefer to buy online because is convenient and fast. Thai people like anything that is easy and uncomplicated. Therefore, it is not strange to make online trading very popular in Thailand at this time. Moreover, sometimes shopping online is cheaper than buying from in-store because there has a promotion or discount price.

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E-commerce also has some process support shopping time by easily compare prices with a lot of options to show within that time period. When convenience becomes an important factor in online shopping, in just a few clicks, products can be delivered straight to their homes. That is the main reason why they prefer online shopping more than going out to buy things by themselves.

At Thailand, there are many kinds of an online shopping platform. An online platform that starts with the consumer to consumer (C2C) market and later increases the marketing channel between the business and the consumer (B2C) in a combined form Hybrid Model for example Lazada, Shoppee, JD Central, and 11street. In addition, it also includes online platforms that are scaled up to enable trading, such as the Facebook market or business category on Instagram. One of the largest platforms in Thailand at this time is Lazada and Shopee on both platforms, reaching the highest monthly viewer visits gain of 44.1 million times and 31.19 million times, but downloading the application, Shopee came in at number one surpassing Lazada.

They are both huge online shopping platform that is a contender all along. The value of the E-commerce market is steadily growing, according to a survey of the Electronic Transactions Development Agency (ETDA). In 2017, Thailand has a value of E-commerce is 2.8 trillion baht (around 92 billion USD) and in the following year 2018, the value of E-commerce has grown by 14.04%, with a total value of 3.2 trillion baht (around 105 billion USD). Thailand is considered to have the highest growth rate of business to consumer (B2C) in ASEAN due to the confidence in E-Payment technology and fast transportation.

Today's online entrepreneurs should know how to use online platform to benefit their businesses by using technology to generate more sales. If used correctly, it will become a way to grow their business. At present, many online entrepreneurs have started to expand the business from only having an offline storefront move to do an online store while most new business owners have an online storefront only, as this online platform does not require high investment like store rent fees and can open for sale 24 hours a day. The thing can help E-commerce businesses in Thailand to grow quickly is the development of telecommunications. The development of the speed of the internet has made data communication via the internet much easier than in the past. It combined with devices used to access the internet, such as smartphones or computers, are cheap and allowing customers to buy can be easily owned.

Resulting in customers being able to access the internet anytime. These things make the market of E-commerce in Thailand bigger and more trend continues to expand.

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The high competition in this type of business makes marketing as important factors to beat competitors and get the loyalty from customers because the marketing activities of E-commerce will lead customers to know the shop and create satisfaction for customers by offering products that meet customer's needs until causing trade at the satisfied level between sellers and customers. In addition, marketing factors are not just a tool for exchanging but are also a tool that continuously creates satisfaction for customers causing customers to be loyal to the product as well as re-use or re-purchase when needed. (Thawatchai, 2014)

The thing makes E-commerce still launch is the customer. Customer Loyalty is a relationship or commitment that customers have with the brand, store, manufacturer, service, etc. that is based on a satisfied attitude or behavioral responses, such as participating in marketing activities online shop and repeatedly purchasing goods. Customer loyalty is also the level of customer relations with the online shop. Loyal customers are not interested in other competitors, whether or not they are better than us. Customers will believe that the business will be able to offer things to them knowingly without having to wait for them to speak and the business should able to continuously meet customer needs and satisfaction. Strategy for making customers be impressed and returning repeatedly, the business believes that customers come back to buy because of reasonable prices and the availability of various promotions, brand image, store location or buying channels, and brand image in the media. Business owners are always looking to open up new markets.

Grouping new customers are important but those owners forget that one of the key factors that make a business survive is a success is customer loyalty or re-purchasing from the customer. The moderated effect of E-satisfaction that results in customer loyalty can be explained by Figure1.1.

Figure 1.1: Moderated effect of E-satisfaction on E-loyalty.

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However, nowadays E-commerce businesses are rarely interested in maintaining the loyalty of their former customers. Most of them tend to give special privileges to new customers while existing customers will have different privileges depending on promotion or the store's opinion. The benefit of customer loyalty is that it allows you to have regular customers, make the activity have a continuous income, and customers may also help to publicize for us in another way as well. Regular customers always satisfied with the product, quality, and price then become customer satisfaction. Making products still able to sell in the market is being unique and different because if they stand out and different from the same product will make their customers choose them instead of choosing competitors. Value and reliability are important, but this is customer satisfaction that sellers can't determine. Value and reliability are determine by the customer's own mind. Above all, apart from excellent products and services, an important component of buying and selling products is customers, because customers are the most important components in doing business. Regardless of advanced technology equipment or beautiful picture of products, customers are still the heart of doing business. Customers are the person who drives products and the main push for any business, on the other hand, if they are not successful in communicating with customers that business will be difficult to survive.