TCC Group, owned by billionaire Charoen Sirivadhanabhakdi, is flexing its muscles in the Thai e-commerce market, until now dominated by Chinese titans Alibaba and JD.com, by acquiring a majority stake in Tarad.com at an estimated price of at least 250 million baht.
The investment will strengthen TCC's digital business arm, the company's "new engine of growth", by allowing it to better analyse and monetise data.
The increasing emphasis on data will let TCC better tailor products to consumer needs and add new revenue streams.
Synergies with TCC-owned ThaiBev and retailer Big C will be among the earliest and clearest benefits of the transaction.
TCC is also planning to enter the corporate venture capital (CVC) sector to invest in local e-payment, e-logistics and big data startups, which could work to improve TCC's current offerings.
Meanwhile, Tarad.com aims to become profitable again by the end of this year, by transforming itself from a local e-marketplace to an end-to-end e-business solutions firm, also known as universal commerce (u-commerce).
"After one year of negotiations, we decided to acquire 51% of Tarad.com to pave the way for the digital business of TCC Group, and the deal will be complete in the next two months," said Marut Burannasetkul, president and chief executive of T$pace Digital Co, a subsidiary of Adelfos, the digital and media investment arm under TCC Group.
Established this month with registered capital of 1 million baht, T$pace will hold a 51% share in Tarad.com, while 49% will be held by founder Pawoot Pongvitayapanu, who will keep managing Tarad.com.
Mr Marut declined to disclose the value of the deal, saying only that the debt of Tarad.com was included. According to Business Online Ltd, Tarad.com in 2016 had a 119-million-baht loss and was 11.7 million baht in debt.
Meanwhile, some 70 Tarad.com employees already moved to TCC's Cyberworld building two months ago.
Mr Pawoot said Tarad.com will turn a profit this year thanks to the new strategic investor. Tarad.com faced deficits the past few years because of intense competition from Chinese and other overseas giants.
Tarad.com's partnership with Rakuten was terminated because the Japanese business model did not fit the local market.
In 2009, Rakuten acquired 67% of Tarad.com for US$3.35 million. The stake was sold back to Tarad.com in 2016.
Mr Pawoot said Tarad.com no longer focuses on the e-marketplace, due to fierce competition.
"We will turn the rivals to partners with our new business model, u-commerce," he said.
Tarad.com is currently in the process of integration with Shopee.com and 11street, is in discussions with Lazada and plans integration with the Facebook engine.
"We are also exploring cross-border opportunities by collaborating with Alibaba.com in ways that can bring local businesses to the global market," Mr Pawoot said.
Apart from e-marketplace and data management, Tarad.com also provides e-marketing, e-logistics, e-payment and e-knowledge through training solutions for local merchants.
Thailand's e-commerce value reached 2.8 trillion baht in 2016, of which social commerce made up 134 billion baht and e-marketplace accounted for 98 billion baht.
Mr Pawoot said Tarad.com will change its revenue model from commission fees to the freemium model by letting merchants use some basic features free of charge and pay for additional services.
"This year, Tarad.com will invest 100 million baht in technology, in particular data analytic capability," Mr Pawoot said.
