Bangkok--21 Jan--Tesco Lotus
The Bill Payment Service business has been around in Thailand for about 15 years. At present, the value of the business is estimated at 4.5 to 5 billion baht. The competition was low since there was only one big player in the market.
It is estimated that the capital investment for the business is around 50 to 75 million baht for each player. The investment is mostly on a mainframe computer, software and other IT equipment. Considering that the market is constantly expanding, the service fee of 10 to 15 baht per service would probably allow service operators to recoup their investments within one year. After that, the business would mostly be all about profits. This is the case especially when the largest player in the market controls almost 7,000 franchised and non-franchised outlets across the country and makes at least 150 million baht a month from the service. Of course, there are some management expenses. But the cost is minimal.
The reason why Tesco Lotus becomes interested in the Bill Payment Service business is that we currently have 80 hypermarkets and 500 other medium size and small size stores. We see that the business is a good value-added service to our customers who want convenience and quick service when they do their chores or pay their monthly bills while shopping at Tesco Lotus.
From our business planning on this service, we realized that, even if we charged a fee of 5 baht per service, we would still be able to get a return on our investment within 2 years. After that, we will be making profits. However, we decided that our business is not about making big profits. Therefore, the business direction is that we would like to provide the service to our customers as a value-added service to them, especially those who have to pay their utility bills every month, while their overall monthly financial burden is already high.
This is why we decided to provide the service at a low and fair price in order to help reduce the cost of living of our customers. When we first launched the service late last year, we have run two promotions for a brief period in order to call the attention of our customers to the new service. At present, we have a total of 49 government and private entities subscribing to our service. Officials from utility provider agencies, in particular, praised us for our effort in providing low cost and fair service to consumers at a time when almost everyone is affected by the current economic situation.
As for complaints that were sent to the Ministry of Commerce, we have already gone in to explain to the Competition Commission officials. We don’t foresee any problem since we have always conducted our business with transparency and we have been fair to everyone, especially the consumers. Most importantly, our policy is that we will not seek unjustifiably high profits from our customers. In fact, we are pleased to see that, after we have entered the market, the players who have existed before us are now beginning to reduce the price of their service or come up with promotion schemes to give back some of the profits to their customers. This is a good thing for consumers.
Dr. Darmp Sukontasap, Senior Vice President, Tesco Lotus
For more information please contact
Phunthipra Tharaphibarn
[email protected]
081-753-6844
Tesco Lotus. Ek-chai Distribution System Co., Ltd.
629/1 Moo 10 Navamin Rd, Klongkhum, Bungkhum, Bangkok 10230, Thailand.