The role of R3A road and digital platform to promote Thai agricultural product into China market
China Intelligence Center (CIC) (泰国商务智能中心)
CAMT DIGITAL SCHOOL, CHIANG MAI UNIVERSITY
Dr. Danaitun Pongpatcharatorntep (李雄英)
Expert Group Meeting on Enhancing Rural Transport
Connectivity to Regional and International Transport Networks
9-10 July 2019, Bangkok
Researches and projects
which related to this presentation
Research Project
Evaluating the costs and value chain analysis of Thai fruit for exporting to China on R12
road (2017): granted by ARDA
Analysis of cost and obstacle on Thai rice exporting to China through R3A road (2013):
granted by National Research Council of Thailand.
Analysis of cost and obstacle on Thai fresh food exporting to China through R3A road
(2012): granted by ARDA.
“An analysis of the emerging of R3A route and E-commerce on Thai fresh fruit exporting
to China.” Proceedings the Fifth Thai-Chinese Strategic Research Seminar “Thailand-
China Strategic Partnership : Present to Future” 17 - 19 August 2016Centara Grand Hotel
and Bangkok Convention Centre at Central World, Bangkok, Thailand
National Strategies Project
- Cross Border E-commerce to promote Northern Thai product into China Market (2018)
Chiang Mai University New Innovation Platform
- Research to Commercialize (CMU carelicious) (2019)
China Important policies which related to
Thailand in China's 13th 5 years Economic
Development Plan (2016-2020)
Belt Road Initiative (BRI)
Made in China 2025 (Advance Technology)
Digital Revolution (Internet+)
Cross Border Ecommerce (CBEC) is one of the strategies that are directly related to the three main strategies of China And the government announced that it was one of the national agenda on 20 June 2015
“一带一路建设中,要电商先行”
CBEC is a step that must be taken to achieve the OBOR strategic framework
Belt Road Initiative (BRI)
1) North Western (connect to Europe Middle/Southern/Eastern Asia)
2) North Eastern (Western Russia)
3) Guangxi Zhuang Autonomous region as gateway (Inland (road,rail)/sea transport) connects to ASEAN countries)
4) Yunnan Province as gateway (Inland (road,river,rail) transport)
connects to GMS and South Asia countries)
4 Gateways
R3B
R3A
BIMST-EC
GMS
CHINA-
ASEANLand Bridge
Northern Thailand and southern China, the center of
an economic integration
EWEC
NSEC (R3A)
BRI through R3A road making Northern Thailand
move from “Land lock” to become “Land link”
R3A,Bangkok-kunming Road, NSEC
Bangkok – Chiang Khong (Chiang Rai
Province) (Thailand) (860 km)
Chiang Khong/Huay Sai (Bokaew) –
Boten (Luang Namta) (Laos) (240 km)
Boten/Mohan (Xishuangbanna) –
Kunming (China) (670 km)
The role of R3A for Thai fruit exporting to China
2003 ASEAN-China FTA early harvest program had implemented, increasing Thai fruit volume into China market
Since 2009 R3A was become one of Thai fresh fruit gate way to China market, but exporters cannot use FTA tax privileges on this route due to logistics quality issue.
May 2011 A Protocol on the Inspection and Quarantine Requirements for Exportation and Importation of Fruits between Thailand and China through Territories of the Third Countries was implemented, China accepted Thai fresh fruit can enter into China market through R3A road with 0% custom tax regulation.
Protocol was implemented in May 2011
To China
To Laos
2013 4th Thai–Lao Friendship Bridge at Chiang Khong
border custom was opened to the public on
11 December 2013
Table 1: China’s imported fruit quantity (ton) during year 2010-2017 Year Imported from Thailand Total imported quantity The proportion of
Thai fruits imports Quantity (ton) Proportion Quantity (ton) Proportion
2010
2011
2012
2013
2014
2015
2016
2017
474,886.0
605,808.5
720,023.1
773,838.6
634,366.6
635,310.9
572,317.4
638,994.2
27.57%
18.85%
7.47%
-18.02%
0.15%
-9.92%
11.65%
2,611,097.8
3,200,772.4
3,266,462.1
3,119,497.0
3,838,013.8
4,296,663.1
3,971,842.7
4,507,859.1
22.58%
2.05%
-4.50%
23.03%
11.95%
-7.56%
21.05%
18.19%
18.93%
22.04%
24.81%
16.53%
14.79%
14.41%
13.29%
Average Growth 5.39% 9.80%
Source: ข้อมูลสถิติน ำเข้ำสินค้ำเกษตรรำยเดือนของกระทรวงพำณิชย้จีน (2561)
China’s imported fruit quantity (ton)
during year 2010-2017
Table 2: China’s imported fruit value (Million USD) during year 2010-2017
Year
Imported from Thailand Total imported value
The proportion of Thai fruits imports
Value
(Million USD)
Proportion Value
(Million USD)
Proportion
2010
2011
2012
2013
2014
2015
2016
2017
494.49
747.02
1,056.41
1,289.76
1,093.70
1,130.47
1,111.56
1,146.48
51.07%
41.42%
22.09%
-15.20%
3.36%
-1.67%
3.14%
2,059.71
2,926.56
3,671.96
3,981.97
5,021.36
5,865.85
5,704.32
6,215.21
42.09%
25.47%
8.44%
26.10%
16.82%
-2.75%
8.96%
24.01%
25.53%
28.77%
32.39%
21.78%
19.27%
19.49%
18.45%
Average growth 14.89% 17.87%
Source: ข้อมูลสถิติน ำเข้ำสินค้ำเกษตรรำยเดือนของกระทรวงพำณิชย้จีน (2561)
China’s imported fruit value (Million USD) during year 2010-2017
Role of R3A to increase Thai
fruit entering to China market
Responding to the needs of the western area market of China
Sea transportation
To “Jiang nan” market
in Guangzhou
Kunming become a new Thai fruit DC in China competed with
“Jiang nan” market
Flexibility to change routes to meet market demand and speed of transportation
4 days from Chiangkhong to Beijing
8 days from Laemchabang to Beijing
Time and cost comparison between R3A and
sea transportation from fruit plant to Guangzhou“Jiang nan” market
Cost Time
Origin Compare result Origin Compare result
From
Northern
Not difference From
Northern
R3A is faster 28.6%
From
Eastern
Sea is cheaper 32.1% From
Eastern
R3A is faster 25.0%
From
Southern
Sea is cheaper 22.5% From
Southern
R3A is faster 25.0%
Source: Danaitun Pongpatcharatorntep, (2012) “Analysis of cost and obstacle on Thai fresh food exporting to
China through R3A road”
New paradigm of China border area developed from BRI
1. To encourage bilateral trade between China and ASEAN,
especially increasing import volume through online platform
and cross border trade
2. Giving privileges regulation to border area citizens/firms- Guanlei port (MaKhong River) : tax privileges for import
frozen meat product- Mohan (R3A) : Cross Border E-commerce regulation
- PingXiang (R12): tax privileges for import fresh fruit
product
3. Identify ASEAN as a country, therefore, some product
from each country in ASEAN can apply border trade privileges
regulation to export product into China.
(VAT = 11%, Cross border fee = 4%-6%)
Compare the amount of transportation proportion R3A: R12: Sea transport
Transportation
route
Before BRI After BRI
R3A 10% 25%
R12,R9 10% 50%
Sea transport 80% 25%
Source: Interview Chinese fruit exporters by researcher
Danaitun Pongpatcharatorntep,
Evaluating the costs and value chain analysis of Thai fruit
for exporting to China on R12 road (2017)
R3A,R12 Logistics time/cost comparison
Fruit Plant (Jantaburi) to Guangzhou
1 container mangosteen to China (March 2017)
Jantaburi
Chiangkhong
Nakornphanom
Mohan
PingXiang
GuangzhouJiangnan market
R3A: Jantaburi→Chiangkhong→ Mohan = 36 hrs.
Mohang→Guangzhou = 72 hrs. (Total 108 hrs.)
R12: Jantaburi→Nakornphanom→ PingXiang = 108 hrs.
PingXiang→Guangzhou = 24 hrs. (Total 132 hrs.)
R3A: Jantaburi→Mohan = 75,000 (Tran.)+250,000 (VAT)
Mohang→Guangzhou = 80,000 (Total 400,000 Baht)
R12: Jantaburi→PingXiang = 220,000
PingXiang→Guangzhou = 50,000 (Total 270,000 Baht)
Opportunities along
the route R3A
1. Chiang Khong SEZ
2. Kunming-Mohan high speed train3. Mengla District SEZ (Include: Mohan)
4. Mohan (China)- Boten (Laos) border
SEZ
5. Kunming E-commerce FTZ
High speed railway
Kunming-Mohan
Chiang
Khong SEZ
Mohan
Kunming
- Mohan-Boten SEZ
- Mengla SEZ (Include:
E-commerce B2C product
OSS clearance)
Kunming
E-commerce FTZ
Opportunities along
the route R3A
China high speed train railway network 2020
Kunming-Mohan
2021 to link with R3A
Kunming E-commerce Free Trade has been increased
the potential to export Thai products to China by R3A
road and air freight (via Kunming International Airport)
Northern Thai can get benefit from
E-commerce FTZ and Mohan OSS (R3A (China-
Laos Border), to manage E-commerce B2C
shipment in term of establishing a Fulfillment
Center in Thailand, Laos or China
OSS : For B2C shipment in Mohan
SEZ Mohan-Boten (China-Laos Border)
Last railway station in
China and 1st
station in Laos
老挝磨丁经济特区: “一带一路” 的免税天堂 国际自由港
China supports the feasibility study of the construction
of Huai Sai-Mo Han Expressway (new R3A), to reduce a
distance from 240 km to 180 km. which takes only 1.5
hours travel time after an expressway finished.
China 36 CBEC City covering 20 Provinces + 4 Mega citySource: https://baike.baidu.com/item/中国跨境电子商务综合试验区
1. หำงโจว2. เทียนจิน3. เซี่ยงไฮ้4. ฉงชิ่ง5. เหอเฝย6. เจ้ิงโจว7. กว้ำงโจว8. เฉิงตู9. ต้ำเหลียน10. หนิงโป11. ชิงเต้ำ12. เซินเจิ้น13. ซูโจว14. กรุงป้กกิ่ง15. ฮอฮอต16. เส่ินหยำง17. ฉำงชุน18. ฮำร้บิ้น19. นำนกิง20. หนำนชำง
21. อู้ฮั่น22. ฉำงซำ23. หนำนหนิง24. ไหโข้ว25. กุ้ยหยำง26. คุนหมิง27. ซีอำน28. หลำนโจว29. เซี่ยเหมิน30. ถังซำน31. อู้ซี32. เวยไห้33. จูไห้34. ตงก้วน35. อ้ีอู36. ผิงถัน
ปี 2019 เหลือเพียง ทเิบต ซนิเจียง ชิงไห่ ซานซี หนิงเซี่ย ที่ยังไม่มีด่าน CBEC
Yunnan will become “Gateway” for
ASEAN product to China and Europe
Fresh fruit
E-commerce
Tourists
Etc.
R3A route and
E-commerce, opportunity
for small scale
gardeners/rural
community enterprise/
premium grade fruit
entering into China market
Number of users And growth rate (million)Growth rate(%)
2016 Proportion(%) 2017 Proportion(%)
Online Shopping 466.70 63.8 533.32 69.1 14.3%Mobile Commerce 440.93 63.4 505.63 67.2 14.7%
Number of internet users in
China (ten thousand)
2007-2017
Favorite mobile App and
number of user to buy
fresh product (Million)
China fruit E-commerce
Thai fruit logistic/distribution model to China
B2B (Traditional Platform)
- To via R3A, R12 route or sea freight transportation are main logistics way for a large-scale product (per container) distribution
(Low logistics cost per unit , a large scale of money to invest)
B2C online (E-commerce Platform)
- Logistics through cold chain air express delivery from Thailand to China
(Best for premium grade product and small scale gardeners, a high logistics cost per unit)
Model Strength Weakness
B2B Low logistics cost Need a big volume
B2C Small scale gardeners can
buy on the platform
High logistics cost
B2B2C Logistics by B2B method, and Order by B2C E-Commerce method
Model Strength Weakness
B2B Low logistics cost Need a big volume
B2C Small scale gardeners can
buy on the platform
High logistics cost
Using online platform to buy product and logistics by
the B2B transportation
Thai fresh fruit E-commerce channel and Delivered by R3A,
Shipment delivered by road transportation through R3A route
Shipment is sent to local express logistics provider, delivers to end customer (air+road)
1
2
3
4
5
R3A cross border logistics process
Fruit Ordered by customer(PC/Tablet/Mobile)
Online trading system
Thai gardeners receives order and delivers shipment
Logistics process in Thailand
E-commerce service providers
Logistics process in China
B2B2C: Thai fruit transported throuth R3A route and
change to domestic air delivery to end customer
Chiang
khong
Mohan
Jinghong
Xishuangbanna
international airport
Case study: Social network E-commerce platform
Fruit retail agents trade on
Social-Network
1
2
3
4
5
1. A fruit retail agents open social network channel to contact with end customers
2. Order is sent to the fruit cross border trading company, to deliver shipment to end customer’s address
Online trading system
Gardener receives order and delivers shipment
Fruit has ordered by customer(PC/Tablet/Mobile)
Logistics process in Thailand
Delivered by road transportation through R3A route
Logistics process in China Shipment is sent to local express logistics provider, delivers to end customer (air+road)
R3A cross border logistics process
My future businesses model study
B2B2b : Fruit has ordered through Chinese online E-commerce Platform which is manage by Thai enterprises and distributed by China transportation network to fruit wholesale market in China’s each provinces.
(Thai Online Middle man Model, ล้งไทย)
B2C, O2O
- Establish brand of the Thai fruit premium grade to promote in a famous tourists destination (Chiang Mai / Bangkok/ Pattaya/ Phuket) (Offline)
- Develop the multi-online platform on Chinese online channel (Online)
O 2 O C B E C M o d e l
Chiang Mai Offline shop
Online Supporting system(Information/Financial/Physical Flow)- Wechat official account /mini program- Mobile Application.- Payment gateway (alipay,wechat pay)- Back office service
Chinese online shop- Taobao shop - Tmall Shop - Social network- etc
Activities- Net Idol/Influencer- Product development- Business Matching
CAMT กบับทบาท CBEC
KIOSK ตน้แบบกบัเอกชน
CAMT
O2O
CBEC
Thank you
China Intelligence Center (CIC) (泰国商务智能中心)
CAMT DIGITAL SCHOOL, CHIANG MAI UNIVERSITY
Dr. Danaitun Pongpatcharatorntep (李雄英)
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