How Line is turning Instagram into an ecommerce app in Thailand

Mark Bivens is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He has been working as a venture capitalist in Paris since 2001 (aka the RudeVC) and is currently based at Truffle Capital. You can read more on his blog here.

Editor’s note: this post originally appeared on Mark’s blog. It has been modified from the original.

On a recent exploratory visit to Bangkok, I observed an intriguing pattern among people on the trains and stumbled upon a consumer shopping behavior that shows how mobile ecommerce in Thailand is growing in unexpected ways.

In Thailand, experts peg ecommerce penetration at a mere 0.2 percent of overall retail. That is expected to grow. With a population of 65 million, Thais have over 90 million mobile SIM cards; internet access connects around 20 million individuals; and online commerce only just surpassed US$1 billion. Talk about potential.

Mobile ecommerce, or mcommerce, is likely to play a key role. During my stay in Bangkok, it seemed that nearly every single person walking down the street or riding the metro was cradling their iPhone or (more commonly) Android phone. Mobile networks were strong and reliable (4G in some parts, with 3G ubiquitous). Granted I did not leave urban areas, but mobile penetration in Thailand is almost 150 percent, with smartphone penetration at 35~40 percent today and expected to double.

Social buzz

Line and Instagram stand out as two of the hottest social apps in Thailand.
Line is the dominant messenging platform in the nation, with over 33 million registered users. Messaging with Line has become so quotidien – one entrepreneur told me about how her mother operates several Line groups for her various circles of friends – that the app has emerged as arguably the most trusted channel of interaction outside a physical encounter. I’ve even heard of cases where people send Line photos of bank transfer confirmations to provide proof of payment: this suggests that people trust Line more than the credit card processing infrastructure.

Then there is Instagram, Thailand arguably boasts the most engaged user base on Instagram in the world. Estimates place Instagram accounts in the country in the range of 2 million today. Amazingly, a mall in Bangkok was the top Instagram location in the world in 2013.

Social shopping