Technology's Impact on Gold Trading in Thailand

Goals

To analyze the impact of digitization on the local gold trading in Thailand, with a specific focus on the impact of AI, blockchain technology, e-commerce, and fintech.

Early Findings

Throughout our search, we have focused our effort on going through industry reports, local media analysis, and white papers describing the digitization impact on the Thai economy, especially how new technologies have impacted the local gold trade. While some information exists, there is not a lot of information pertaining to the direct impact on gold trading in the country. One possible reason for that might be the fact that the country is still trying to implement meaningful digitization policies, with most of its initiatives only coming to fruition in the last one to two years.

Digitization impact on Thai trading

  • According to the Digital Economy Report 2019 released by the United Nations Conference on Trade and Development (UNCTAD), Thailand is far behind some of its neighbors when it comes to implementing digitization.
  • The government of Thailand has been hard at work to encourage digitization in the country, introducing their Thailand 4.0 plan in 2018, with the aim to encourage more innovations and a higher use of digital technologies in the country.
  • Thailand's Board of Investments have even started granting tax exemptions and reductions to companies and individuals that invest in projects related to "electronic design, embedded systems and software, cloud service, data center, software and science parks", and manufacturing automation.
  • When it comes to precious metals, Thailand is one of the biggest exporters of precious metals in the world.
  • The industry in the country has been slow to adapt to technology innovations.
  • The introduction of 3D printing, IoT, and robotics to the manufacturing process has introduced many challenges to the Thai jewelry industry, including the "real-time pricing of raw materials such as gold and other precious metals as well as the exchange rate volatility in their overall production process."
  • Changes in the industry have mainly impacted retail and brand management, the manufacturing shareholder activity as well as the product development and design of precious metals.
  • Gold trading has not fared much better, as there have been reports that suggest that physical gold-buyers have declined considerably in recent years.
  • As a response to this trend, YLG Bullion International, the biggest gold trader in Thailand, recently announced that it will be implementing blockchain technology to further improve the security of its operations.
  • According to a 2020 ManpowerGroup survey, Thais save more than 50% of their savings in fixed deposits.
  • With the recent move by some of the largest banks in Thailand to lower their interest rates, YLG Bullion believes that local investors will switch their investing policies to either dividend stocks or gold.
  • The trader predicted that by the end of 2020, they are expecting to see their platform reach 10,000 gold savers, adding 500 million bahts to their portfolio.

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