Jack Ma, durian, e-commerce and tax

LOTS of questions have been raised following the visit of Jack Ma, who met with Prime Minister Prayut Chan-o-cha last week, as to whether that would benefit Thailand or put Thailand at a disadvantage especially where trade is concerned.

Those concerns have been raised in the local media on- and off-line. The issue has therefore unavoidably become as usual political, as those on the opposite side of the government allegedly said the visit of Jack Ma could affect the Thai economy in the long run.

Jack Ma, who owns China’s e-commerce giant Alibaba Group, came here and pledged to invest a combined 11 billion baht in Thailand in a move that PM Prayut said could benefit the country’s small farmers and rural enterprises due to the firm’s expertise in diverse technology.

Jack Ma signed with the Thai Government four memorandums of understanding (MoUs), marking the start of Alibaba’s significant investment in Thailand’s much-heralded Eastern Economic Corridor (EEC), as well as a related “Smart City” project, in addition to cooperation in tourism promotion, digital economy and human resource development programs.


Actually lots of criticism had earlier been made against the Prayut government when Alibaba made its first investment within Asean in Malaysia, saying that’s a failure of the country’s “Thailand 4.0” master plan to attract foreign investment.

And unfortunately the story about Alibaba’s huge investment pledge in Thailand has also been overshadowed by overwhelming reports by the Thai media on the 80,000 Thai durians being sold online within one minute by Jack Ma’s e-commerce magic after Alibaba signed a deal for durian worth 13.4 billion baht with the Thai government.

The drama since then been spread by the Thai media, especially online, that in the end the Thai durian market could be in the hands of the Chinese buyers, who can in the future dictate the price of durian at will.

But many disagreed, saying those who voiced concerns are Thai middlemen who used to buy durians from growers at a relatively low price as they acted as a cartel, waiting for growers to come to sell to them.  With the Chinese buyers, they came to buy from growers at the sites and offered better prices, mostly since the beginning of the durian season.

 Ms Charin Sirkkarn, a purchasing officer of Superfruit Thailand, a Thai company selected by Alibaba to export durian to China, said she was pleased with the unexpected response and the good price for the durian.

As a result of the unexpected online sale, she said that the price of Grade A durian at the wholesale markets has gone up to 78 baht per kilogram from 65-70 baht and the Grad B fruit from 55 to 65 baht/kg.

But a well-informed source said nothing comes for free.  He said Jack Ma is a merchant, so profit is the name of the game.

He said at present Thailand exempts import tax on online goods worth less than 1,500 baht per pack. He said it is possible that Jack Ma may sooner or later ask for the increase of the value of the goods to be exempted from 1,500 baht to 3,000 baht.

At the same time, the Thai authorities have been studying whether to scrap the tax free privilege, meaning every imported item will have to be subject to import tax.

“Let’s wait and see how it goes,’’ he said.

So far Thailand’s boarder trade has been affected by cheap goods from China and Vietnam, and with Alibaba coming in, the situation may get worse if more tax privilege is given for online product, he predicted.


Top: A sketch of the massive online business Alibaba does. Photo: Alibabagroup.com

In-text:Alibaba e-commerce giant founder Jack Ma holding talks with Prime Minister Prayut Chan-o-cha. Photo: NNT

By Kowit Sanandang