Page 19 - Social Enterprise A New Business Paradigm for Thailand

around retail trade, lacks integration with online shopping. A new model is needed, one that
goes beyond simple buying and reselling, and instead adds value to products through

contemporary design or innovations that reduce production costs and enable higher pricing.

The enterprise depends on a volunteer-based management structure, which leads to varying
levels of motivation among its leadership. Moreover, while Pracharath Rak Samakkee focuses
on supporting farmers, its organizational leaders are typically urban businesspeople with no
prior experience in agriculture, resulting in ineffective communication with the farmer-supplier
base, despite the group’s eligibility for special procurement incentives. Finally, owing to its
name coinciding with a declining political party, it faces adverse impacts from political
instability, and its management remains constrained by bureaucratic frameworks.

22. Small social enterprises without public or private backing rarely profit in their first five years

Interviews reveal that these enterprises often operate in a stop-and-start, precarious manner,
facing significant challenges in their early years. As a result, they tend to place greater
expectations on the government for support through procurement policies, rather than
through tax incentives, since most are still too young and not yet profitable enough to benefit
from tax deductions.

Strategic Pathways for Advancing Social Enterprises

Addressing the challenges faced by social enterprises requires a big-picture approach to identify

core structural issues, which can be broadly categorized into two main groups: market-side
(demand) challenges and supply-side challenges.

1. Market Challenges
One of the main weaknesses of social enterprises lies in marketing. However, the social enterprise
market cannot be treated as a homogenous market, since these enterprises serve different types
of markets. Therefore, strategies to develop social enterprise markets must distinguish between
two broad groups:

1) Enterprises producing goods and services for the general consumer market
This group is capable of achieving financial sustainability if supported by a sound business
model. These enterprises do not require special assistance, aside from general marketing

training, similar to what small and medium-sized enterprises (SMEs) already receive from
government agencies and academic institutions. For social enterprises operating in this
mainstream market, if they are unable to develop adequate marketing skills, they may need
to reconsider reverting to nonprofit status.

One key development strategy that public agencies and external support organizations can
pursue for this group is to raise public awareness about the enterprise’s social value, in order

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