For a Hong Kong company that specializes in providing electronic-trading platforms for financial institutions and real-time stock information for retail investors and corporate customers, Thailand might not seem the obvious choice to launch two new products.
Internet penetration is low in the kingdom, infrastructure is not of a high standard, the stock market is about as flat as road kill and elections are just around the corner. So some might question the timing of Quotepower International’s (QPI) latest product launch.
But CEO Ted Sze says he heard similar things when the company launched its first product – an online, real-time stock information system – at the height of Hong Kong’s stock market woes in 1997.
“We’re not too worried about where the market is now. It’s about getting in and building a strong presence,” says Sze. And, he adds, establishing a presence in a country is much easier when the market is quiet.
QPI hopes that its first new product, a set-top box, will boost the company’s presence in Thailand and attract investors who are looking for a simple technology that allows stock trading without the expense and learning curve involved with buying a PC. The box provides real-time securities trading information, such as prices, charts and breaking news, via a broadcast TV signal.
If a person buys the box from Quotepower, and is also a client of one of the three securities houses in Thailand that have bought Quotepower’s complete electronic trading platform, that person can attach a regular phone line to the set-top box and execute buy and sell orders direct to their brokers via a closed network.
The three companies that have purchased Quotepower’s trading platform in Thailand, are KGI Securities One, TISCO Securities and Global Thai.
In conjunction with the set-top box aimed at the retail investor, Quotepower has also announced a new product for brokers – an Interactive Voice Response (IVR) system. IVR uses speech-to-text technology that allows brokers to offer trading and information services efficiently over any telephone network.
It’s hardly cutting edge technology, but Sze points out that the latest bells and whistles don’t always have an immediate place in every market. And if that means his company is labelled low-tech, Sze says he can live with that. “We’re a solutions provider. We can’t just wait for the infrastructure to catch up.”
Slow adoption
It seems, in Thailand at least, that the race to catch up is being run quite slowly. At a meeting between Stock Exchange of Thailand (SET) officials, investors and securities executives on 3 November, SET President Vicharat Vichit-Vadakarn claimed that only 1,000 investors are actively trading online one full year after internet trading was introduced. This represents just 1% of the total investor base of 100,000.
As an explanation for this, according to a report in The Bangkok Post, Vicharat said that the Thai market is still in the early stages of internet use and that many investors are still unfamiliar with the services. He added that investors were probably concerned about security and settlement issues.
Managing director of Quotepower International Thailand, Al Bien, agrees. He notes that over 2,000 people have signed up for the recently launched quotepowerthai.com website service, and that while the internet is being used for research purposes, many investors are still trading by phone or even visiting the large trading centres run by the larger brokers.
Besides the Thai brokers using QPI’s trading platform there are five other brokers using a bureau service, built by SET in conjunction with German company Netlife, to offer online trading. Their settrade.com initiative also works on an outsourcing model, with brokers connected using the same trading infrastructure to route orders from the internet to the broker’s individual systems.
Szesays that QPI’s outsourcing model is different because they work with their client brokers to customize a solution that allows them to differentiate their business in an increasingly competitive environment. In October, broker commissions were deregulated and some brokers are now offering zero commission in an effort to attract more customers. Sze says that now, more than ever, giving potential customers the widest choice of communication and transaction channels is essential for brokers to stay competitive. This applies not only in Thailand, but in every market.
Expansion plans
Sze says his goal is to build QPI as a pan-Asian brand in a similar way to how the company entered the Thai market. This was achieved through last year’s acquisition of Unitech – a company that offered real-time stock information services in Thailand, The Philippines and Indonesia – in a $5 million stock swap.
Quotepower is currently in negotiations with a company in Taiwan, and although Bien declined to say which one, he did say that the company currently has 10,000 customers using a similar set-top box to the one Quotepower is introducing into Thailand.
The company is also looking at buying into Malaysia and Singapore by the end of the year and Korea and Japan in early 2001.
