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Connecting Locals to Locals: Market Discovery through E-Commerce

Santitarn Sathirathai and Voraprapa Nakavachara
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Santitarn Sathirathai: Sea Group

PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: Despite rapid growth in e-commerce, there has been little systematic research examining the impact of online commerce adoption on the entrepreneurs in ASEAN. Using a unique survey data of around 7,000 merchants on Shopee in Thailand, this paper seeks to fill that gap through a mix of econometric and trade connectivity analyses. We found that e-commerce adoption is associated with improvement in household incomes for the sellers. The benefits come from two different channels. First, e-commerce empowers existing SMEs by significantly boosting their revenue, efficiency, and profit growth. The improvement in profitability seems to go beyond a one-off gain as going online seems to also result in stronger profit growth rates. Second, our trade connectivity analysis illustrates how e-commerce allows merchants, especially those in the poorer regions, discover new market opportunity outside their own regions. In addition, e-commerce allows people of various employment status including full-time employees, homemakers, students, etc. to earn additional income, while maintaining other responsibilities.

Keywords: E-Commerce; Digital Economy; Connectivity; Thailand (search for similar items in EconPapers)
JEL-codes: L81 F15 F63 R12 (search for similar items in EconPapers)
Pages: 50 page
Date: 2019-12, Revised 2019-12
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Published in PIER Discussion Paper Series

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