The Case for Green Samlor
Mobile street vendor in Thailand (Photo Courtesy:Richard Barrow)

For centuries, Thailand’s mobile street vendors (also called “Samlor” vendors) have played a prominent role to public spaces, promoting social cohesion and socio-economic prosperity (Tiyanukulmongkhon, The value and role of street vendors in the Thai high street, in promoting social cohesion and socio-economic prosperity, 2019). As Bangkok Metropolitan Area (BMA) began experiencing rapid urbanization, the demand for and supply of ‘Samlor’ street vendors around popular streets of the city (e.g., Soi Ari, Victory Monument, Silom road, Yaowarat Road) have increased manifold times and have continued to be the most visible face of the country’s informal sector which employs around 45% of labor force (International Institute for Environment and Development, 2016). They have gone beyond their self-employment to contribute to “everyday urbanism”, decreased unemployment rate and provided affordable food (Tiyanukulmongkhon, The value and role of street vendors in the Thai high street, in promoting social cohesion and socio-economic prosperity, 2019) . Whereas BMA’s policies of returning the sidewalks to the people still hinges on loose grounds (Tiyanukulmongkhon, The value and role of street vendors in the Thai high street, in promoting social cohesion and socio-economic prosperity, 2019), the charm of the “Samlor” vendors hasn’t caught attention in debates on the shape and pace of electrified mobility (E-mobility) transformation in the country.

Global Context

The latest “E-Mobility Index 2021”, shows that the industry is booming despite the COVID -19 pandemic (Roland Berger & fka GmbH, 2021). Even with stricter climate targets as a challenge for the industry, leading automotive nations such as China, Germany and USA showed strong growth (Roland Berger & fka GmbH, 2021). While the electric vehicles (EVs) registrations were still far behind the target for Thailand[1], the focus on numbers alone is not enough as the state and private sector need to seriously work on building forward thinking solutions to manage technology disruption at the Bottom of Pyramid (BoP) markets (Vitor Koki da Costa Nogami, 2017), particularly for Samlor vendors who have limited cash for investments and cannot afford an EV to sell food and/ or use for transportation purpose.

Whereas, majority E-mobility businesses are ‘playing to win’ with their EV strategy (e.g., Energy Absolute Plc in EV buses)[2], axing business deals internationally (e.g., PTT & Foxconn in EV manufacturing)[3], creating local partnerships and startup investments (PTT & Delta in EV charging infrastructures)[4] and many more, the off-the-street vendors in BoP markets are left behind in the nations’ race for E-mobility transformation by 2036[5]. This will not only widen the country’s innovation gap but will also bring dim prospects on the vendors socio-economic livelihoods and the future of mobile vending.

In this line, the role of E-mobility businesses and/or startups is pivotal in order to sustain their livelihoods and bring them under the innovation net. Broadly speaking, businesses have tough choice to make — include smaller and fragmented market segments that exist in the value chain, such as Samlors with specific characteristics into their business models. Unless they design and experiment with diverse business models for commercialization, some of which is catered to the BoP market, efficient uptake of E-mobility will only be a ‘wishful thinking’ as it is not only the attractive market segments that are counted in the transformation. Equally important, are the BoP markets for which efficient e-mobility solutions are needed for long term success.

The world has witnessed successful adaptations of e-mobility solutions beyond the classic ‘direct sales’ business model. Startups in East Africa, particularly Kenya, provides an example of how business model innovations focused on Circular and Shared economy approaches have accelerated transformational change towards sustainable urban mobility for BoP markets. E-Conversion is a proven business model innovation to reduce the investment cost of EVs. A number of startups have already specialized in the conversion of existing Bajaj and TVS motorbikes by exchanging the fuel tank and combustion engines with Lithium-ion batteries and an electric engine. Paying for the new engine and battery is possible either the classical way via the selling price (pay for equipment) or via a fixed rate dependent on use (pay-per-use). Targeted pay-off times are between 1–3 years for the customers, making it a profitable investment (Siemens Stiftung, 2020).

On the design and targeting of E-mobility programs for BoP markets, evidence from India can be of great help. India has specifically targeted electric two- and three- wheeler as a segment eligible for subsidy support under its Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles (FAMEV) scheme which began in 2015. Philippines is accelerating the adoption and scale up of e-mobility for low carbon city development with a child project program which focuses on development of charging infrastructure (incl. battery swapping) integrated with renewable energy and supporting the development of viable E-mobility business models starting with two and three wheelers. Same with Ecuador, a child project had been established last year and one of the key components of the project is to create confidence in EV technologies and confirm its feasibility through a demonstration project. Similar programs have been rolled out in Jordan, Albania, Tunisia, South Africa, Grenada, Indonesia, and Bangladesh through support of Global Environment Facility (GEF) in 2020 [6].

Thailand’s Case

In a bid to mainstream electrification, EGAT, a state enterprise under the Ministry of Energy, has introduced an E-mobility program “EGAT for All” to transition fuel motorcycle to E-bike which includes — to provide loan welfare to buy E-bike for EGAT employees, sell E-bike through cooperative stores of EGAT, pilot 51 E-bike taxis in Bang Kruai district, set up platform to use E-bike and swapping station with partners and develop knowledge and service point (production, assembly, maintenance with partners in 2021) [7]. As their mission is to leave no one behind, the state enterprise seems adamant on fleet electrification for overall good. It is therefore not surprising to see that the BoP markets is still out of their radar.

Another leading Thai energy company, Bangchak’s Winnonie E-mobility program has some bent towards the BoP markets such as motorcycle taxis [8], yet seemed to have missed a critical segment. Their research suggests that 50% of income of those motorcycle taxis goes to covering operating costs like fuel & maintenance, leasing etc. and the need for legitimate and competitive source of funding is imminent for their survival. Bangchak’s solution aims to reduce the cost of E-motorbike and battery rental solution by 50%.

The largest energy provider for Thai people, PTT’s new venture called PTT SwapGo and PTT Expresso is transforming the traditional electricity value chain into an innovative business, especially with Mobility as a Service platform (MaaS). They target 50% electrification in three potential rider groups — — private motorbikes, motorcyles taxis, and ride hailing/good delivery. Except motorcyles taxis, the rest are above the pyramid markets.

The continuum view on E-mobility not only includes electrification, it is also about capitalizing on technology. Beyond electrification for environmental benefits which is true, there are numerous economic and technological benefits that could empower mobile vendors to improve their standard of living and find new business opportunities. Can Thailand turn the existing vendors into ‘smart’ vendors? With electrification, can they leverage smart vehicle technologies to enter verticals such as delivery business? All in all, can they reduce of cost of doing business in the near future? There are several questions to think about when technology disruption is not very far for BoP markets.

The Next Journey

Tackling technology disruption at BoP markets is not an easy task. Local businesses and/or startups only may not be in a position to fulfill this innovation gap which is surrounded with impending challenges and risks such as adaptability, status-quo and several unknowns. For Green Samlor, prosperity of the streets, and the future of vending, Thailand has wide opportunities to learn from the rest of the world, and adjust as per the needs and requirements locally. Three things are very clear — national level agenda backed by full support from government for mobile vendors electrification, public-private partnership for business model innovations and use cases to demonstrate business feasibility. Additionally, research should be conducted at university level to explore the topic in depth.

What’s clear is that there is a gap in innovation around the future of vending when taken from the standpoint of e-mobility transformation. As the drive towards carbon and sustainable mobility intensifies, the country needs mobility developments, fleet electrification, and well-regulated policies to meet the specific needs of those in the high streets of Bangkok[9] . The question is, are we ready to empower them?

Mr. Paudyal, MBA, is by profession a Certified Public Accountant and works as Innovation Consultant in the field of E-Mobility. He can be reached at bishalrajpaudyal@gmail.com

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['Electrification', 'Motorbike', 'Street Vendors', 'Thailand', 'Green Energy']