AIBP ASEAN B2B Growth
AIBP ASEAN B2B Growth
Big C: Overcoming Legacy Systems for Online-Offline Retail Integration
Guest: Surachai Hirannitichai, EVP - Digital Technology & Transformation, Big C
In this episode, Khun Surachai Hirannitichai, EVP of Digital Technology at Big C, shared the company’s digital transformation journey on the AIBP B2B Growth Podcast. Big C is modernizing its retail systems by integrating legacy and new digital infrastructure, focusing on omnichannel capabilities. Key innovations include an AI-powered delivery model, enhancing truck utilization and last-mile efficiency, and using AI for demand forecasting and loss prevention. Big C is adapting to changing consumer behavior, catering to both online and offline shoppers, and planning to implement hyper-personalization and generative AI in future operations.
The AIBP ASEAN B2B growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. Topics discussed include business strategy, sales and marketing, enterprise technology and innovation.
Valerie Tan:Hello and welcome to the AIBP growth podcast, where we sit down with individuals responsible for driving growth of their businesses here in Southeast Asia. My name is Valerie, and today we have with us, Khun Surachai HiranitiChai, EVP, digital technology and transformation at Big C. So Big C retail corporation is a modern retail, wholesale and traditional trade platform in Thailand and overseas, retailing a wide assortment of competitively priced products across online and offline sales channels across Thailand, Laos, Cambodia and Hong Kong, through large and small format retail stores, wholesale as well as specialty stores. So Big C was also a winner of the 2024 ASEAN Thailand enterprise innovation awards under the Data and AI category, with their case study on AI Powered Hub delivery model for truck utilization efficiency, which resulted in the establishment of 18 retail hubs, improved workload distribution and better utilization of delivery resources. Let's hear from Khun Surachai himself. Perhaps you may share a little bit more about your role, your background, a little bit about your current roles and responsibilities at Big C. Khun Surachai , please.
Surachai Hirannitichai - Big C:Hi, my name Surachai. My background is telecommunication engineering, working in the mobile telecommunications and then I changed my role to be the IT of rating and charging and also the front end developments in terms of our agents and also our customers. When I change my jobs to be on retail with Big C is very challenging task, looking into the whole retail business value chain, and it's gave me opportunities to apply a lot of technologies, including AI into the business.
Valerie Tan:Thank you very much for that short introduction, maybe you can share a little bit more about your current role and responsibilities at EVP, digital technology and transformation at Big C as well as how this all positions within the overview of big C's business, and maybe it's current initiatives in history,
Surachai Hirannitichai - Big C:my role as EVP of digital technology and transformation, starting with the responsibility of the online channel, development of our E-commerce channels. So we responsible for the development of the platform e-commerce and also the front end applications. The whole team bear responsibilities for 100% in house, development of the whole platform. Then I get additional responsibilities as a hybrid to look after the legacy system infrastructure as well, in terms of the data centers, the data platforms and also the supply chains. Recently so to bring our digital transformation from the E-commerce and bring it over to the legacy transformation as well.
Valerie Tan:Understand. Thank you very much for sharing. So looking at end to end, from Legacy all the way to newer digital implementations, yeah. And I think along the same vein, could you maybe, along your experience, give us a brief overview of your opinion on the impact of digitalization, on developing digital solutions aligned to strategies for consumer facing businesses like Big C.
Surachai Hirannitichai - Big C:Yes, I think we all can see the trend of the retails or groceries, will more and more be online. So that's why Big C is starting to to open this online channel for both the supermarket sizings and also the grocery small grocery sizing as well, bundle it into the same application that we call Big C+ applications. So our that will bring a lot of digital digitalizations to develop these solutions. We have around six squad to do the in house development of back end and front end. This will align with our strategies to be more online, but at the same times, will help utilizing the legacy offline infrastructures. So as we discussed, we still using the infrastructure of our supermarket and small size grocery store to deliver or fulfill the online transaction from our E-commerce customer.
Valerie Tan:And with regards to, you know, looking at making use of your current supermarkets as well as your current retail stores itself to fulfill your online as well as customer demands. How are you actually approaching this modernization of, say, Legacy retail systems, or even integrating legacy retail systems to enable Omni channel capabilities at Big C.
Surachai Hirannitichai - Big C:Yes, very good question. We, since we need to integrate to the legacy system in this physical store, we need to make sure that they modernize their architectures to allow the necessary APIs micro service to be exposed to our E-commerce platform. The challenging is that all the legacy infrastructure is still running on premise, whereby the E commerce, the whole run on cloud. So with these hybrid architectures, we set up the dedicated link between on prem and on cloud and open the point of sales API micro service to allow the E-commerce platform to call. That's where we start these hybrid journeys.
Valerie Tan:Understand. And you mentioned earlier that you're also looking at things around supply chain. So, from the back end to the front end. How does legacy systems actually affect the back end as well? You know, in addition to just the front end POS systems.
Surachai Hirannitichai - Big C:The the current Big C supply chain management is very legacies. The way to integrate with them as of now is by batch. And we run this batch interface every morning. Somehow we need a more real time stock information and the product master information, pricing and everything more often. So what we're trying to do is we embed with the message streaming technology such as Kafka, so all the change in the legacy system will stream to the E commerce online platform. So technology will will help overcome this kind of problem for the legacy and digitalization integrations.
Valerie Tan:Understand. Thank you for elaborating a little bit more about that. And you mentioned briefly about a challenge you know, of looking at hybrid model, so some of your applications are on prem and then some on Cloud. What are the biggest challenges? You know, in addition to this, integrating online and offline systems that you have faced at Big C.
Surachai Hirannitichai - Big C:We not facing much of the challenge, maybe because of the mindset, even though the legacy system has have, haven't been transformed for several years, but the mindset of our people is quite ready to do so. So what we're trying to do is we, we equip the legacy system with a plug in or a bus, you can call it a bridge, that make the legacy APIs into the micro service APIs for both the batch interface and online interface. That's why we can integrate with with their system quite fast and make the online E-commerce up and running in only a few months.
Valerie Tan:So the people are very supportive of the new plugins that you're using to actually enable this change as well. And in terms of, you know, you mentioned earlier, you are looking at some APIs you are using to bridge this gap between the online and offline. Is this is similar within what you're doing for legacy and modern retail systems as well, and also for the supply chain. And how are you actually balancing this need to actually maintain existing operations while also driving digital transformations? Because it seems like there's two different areas, but there's also the bridge that you're building within them. So what is what goes into maintaining, as well as driving new digitalization.
Surachai Hirannitichai - Big C:Very good question. We need to access the system as an end to end, and also we need to interview our stakeholders, especially on the business side, what they need to change? What is their pin point? And we find out that some of the legacy system, we need to keep it there, because there's a lot of like customizations or big C or logics, has put in the system for so many years to transform it in one time might be a lot of words to do. So for that categories, what we trying to do is we trying to create the additional layers to make the legacies behind that bus and make the bus to be a micro service API that other system can call, but for the system that user already agreed to do a transform, we will transform as a whole, like upgrade the system, or sourcing and other solutions to replace that. So there's two track as we speaking of
Valerie Tan:Now, you mentioned there are some areas or some legacy processes or systems that you have to keep in place because people already have been using it and it's necessary for the business. What are some of these areas? And the second part will be more of what are some areas that you can actually digitally transform at Big C, okay,
Surachai Hirannitichai - Big C:so, the categories that we need to maintain are, for example, is like our ERP system. So the Enterprise Resource Planning that related to financials, we need to keep it there, but the supply chain management that require a lot of transformations. Our first phase is to bring in the plug in AI in order to do the more accurate forecasting using those additional plug in and we not transform the system yet. And gradually, we try to explain to our business user the benefit of this AI logic added on to their current legacy system. And then we discuss together and come up with the agreement that if we upgrade the whole system, or replace the whole system, we could have more AIML, the new technologies that help them to be more efficiency, to forecast more accurate, and that's the way we convince our business user to agree on the transformation.
Valerie Tan:Understand, and you touched upon a little bit about AIML, which brings me very nicely to my next question, actually, related to the winning project at the ASEAN enterprise Innovation Awards. What were the key drivers you know, behind big C's decision to implement AI powered solutions for order and fulfillment delivery optimization in particular.
Surachai Hirannitichai - Big C:Yes, during our first phase implementation of our E-commerce, we try, as you know, we will use the the legacy infrastructure of our store, either bigger size or smaller size, and we monitor the statistic. We found that there's a lot of costs in terms of last mile deliveries, and even though we put a lot more trucks that to make sure that the delivery to our end customer is enough, but we still find that the satisfaction score or the delivery completions is not better than what we expect. So we try to find the ways that how we balancing for both the truck utilization, the cost for our last mile deliveries and also to gain customer satisfaction as well, and we seeking for the the technologies or AI. To make sure that our delivery is within the boundary of the coverage of the store is not overlapping, and also the kilometers or the distance from that store to our end customer has been calculated accurately,to make sure that the delivery times of each order is within the SOA doing. So we apply the AIML for so called delivery hubs. Hub models that doing the polygon service area of its specific store not overlap each other, and we are able to put some additional conditions, like number of orders that each store can handl. The coverage areas that we don't want to cross the rivers of Bangkok. Bangkok have a very long rivers cutting across, so called rivers, crossing the rivers cost extra distance, and also making the delivery time longer. So all this condition, we put in the AIML, and it's come up with the more accurate coverage of its stock. And after we implement we again measure the result, we found that the utilization of our truck is better. We can reduce several number of trucks that we save per year, and also the satisfaction of our customer is increased as well. The delivery on time is better. Complaint to our call center is reduced.
Valerie Tan:And those are quite interesting outcomes, I think, especially the one where you avoid rivers in Bangkok. I think that's quite specific and localized to Bangkok itself. And you know, would like to delve a little bit more into when you mentioned the use of data to actually train all these models, right? What types of data were you working on? Were they qualitative, quantitative, and you know, during the process of that, were there any challenges that you managed to resolve that actually enabled you to make use of the data itself that you needed for this solution?
Surachai Hirannitichai - Big C:The majority of the data, as we use the quantitative datas that we collect from our E-commerce system, so the number of orders that each store can handle. The order history in the past, the time that the order has been delivered, all the KPIs that delivery on time and order fulfillmentsuccess, those kind of thing, we put it together and putting in this AIML algorithm, and using the so called the artist tool in order to plot it accurately on the on the on the map and come up with the coverage areas. Also need to thanks to our corresponding business unit that they also collaborate with each store to provide the conditions or additional parameters of each store, like number of staff, number of order they can handle at certain period of time, all those information also necessary to identify the coverage of each
Valerie Tan:So it's both data that's derived from user store. activity, as well as hearing from the internal business users themselves. What are the challenges and how they can cope with all of this solutions that you're developing, and that actually also brings me to my next question with regards to the potential for data and AI. You know, what other areas within the big C business operations or even initiatives. Do you see potential for AI and Data analytics to drive growth or even drive innovation in the organization?
Surachai Hirannitichai - Big C:This is a very good questions, and I see a huge opportunities bringing in the data analytics to our company, and that's where our CIO, she's talking about, our data driven organization and AI transformation strategies, after the success of our projects with AIBP Awards, bring a lot of attention to our companies, and a lot of department contact me to help them making the data mark that they want to collect all the information, and we provide the analytics tool for them for self service data analytics to serve their needs. For example, the loss prevention. They want to look into the data collections to determine loss before it happened, as an indicator for them to look after his store and another department, is supply chain management that they want to look into the more accurate demand forecasting of each store for specific category, like fresh food. And there's a lot of demand now we bringing the attention to the company, and as I told you, I think Big C, they very open to this change and open to the transformation. It just that they might need someone to drive or help them in terms of technology, that's where my roles match into this
Valerie Tan:Understand, I hope this role is something very exciting and doesn't give you and that's also very interesting. You know, you mentioned some key areas are looking at loss prevention, supply chain departments. I'm sure there are a lot of other departments within operations of Big C that would benefit from this data driven organization. What are some key metrics that you know will demonstrate that success of your digital transformation initiatives so specific to maybe specific business units, or in terms of, say, revenue growth or even market share when it comes to digitalization,
Surachai Hirannitichai - Big C:Yes, I think it's very clear to us, once we bring this digital to our E-commerce platform. The revenue growth for E-commerce is grow, not that fast, but it's grow in the I mean, the trend is growing, and it turned from a negative, at the beginning of the investment for now is turn positive already in terms of PnL. So it shows that whatever digital tools and digital development that we bring to the platform, we make sure that is shown in the bottom line of PnL of E-commerce as well. And it sound promising on that. To apply this change to the legacy system, the key KPI is specific for each business owner. For example, the LP the loss prevention. Of course, they want to use the AI to reduce the loss of the whole company down for each categories, and also supply chain management. They want to use the AI ML to have more accurate planning for casting. So also aim to reduce loss. And also aim to reduce the day on hands, on the supply chains as overall stock, and also looking into the supplier management side as well, to optimize the whole supply management, supply chain management.
Valerie Tan:Understand. So different business projects will have different outcomes that you're looking for, but at the end of the day, you're looking at bottom line,PnL, especially when it comes to digitalization. And I think moving into, I think a step back into some of the areas that you mentioned, you know, around looking at planning and forecasting for customers, and then your products to take a step back and see. What are some, you know, I think we within Thailand consumers itself, what are some consumer behavior changes or even development that you have observed as a result of your digitalization or Omni channel approach at Big C? Are there any results that are measurable or that, you know, company has observed to have changed.
Surachai Hirannitichai - Big C:Yes, I think due to the economics situations in Thailand, we see that the the buying powers on the physical store has been declined. So what we're trying to do is to compensate that using our E-commerce. And the result is true, promising result, and that's why we we try to do the hybrid models that the E commerce will be the front end for collect all the orders from customer, online customer, but the fulfillment and everything we will utilize the current store that also open for the offline customer as well. Doing so we balancing the order online to offline or offline to online. We have the we provide the options for customer to deliver to their home or pick up at store, and we will also doing it. Vice versa We have a road map to develop our POS system to allow customer to shop in the physical store, but if they want, we might be allowed them to deliver to their home as well. If they want, not want to carry things back home by themselves. So all of these will promote the Omni channels, and also, we not only thinking about our Thai land territories, only, we thinking about tourism, tourists from China, from other countries. So we open other channels, like we have the WeChat. The company application of Big C, to allow the foreigner from China roaming into Bangkok to order things that they want and deliver to their hotel as well. So this will be the only channel promote among the big C network.
Valerie Tan:Understand, that's very interesting to even take into account the tourists who actually visit Thailand for your very famous snacks all over the country. I myself visit Big C, every time I'm in Bangkok as well to get some snacks back to Singapore. So I think you know, you mentioned looking at different types of customers that you can support through different networks. How about within the store network itself, with the extensive store network in different formats of stores that you have, how do you remain competitive within the consumer market by maximizing customer value at Big C.
Surachai Hirannitichai - Big C:Okay, I think we need, what we need to do is to have a right segmentation of our store position, so we might categorize it into the tourist store, the normal consumer store, And the store to attack young generations and the assortment plannings for each store might be different based on the target groups and based on also the geographic locations of East store as well. That's what we trying to achieve, using correct planning tools and AI to help determine that.
Valerie Tan:Understand this is where you have to collect data from the stores on customer shopping behavior as well. And I think before we wrap up, we have understood a little bit of your insights into the big C's future plans as well as current initiatives. For yourself, what future trends do you foresee for digitalization to actually increase customer value or even solve business problems for your users within Big C as an organization?
Surachai Hirannitichai - Big C:I think the the trend of digitalizations will be more on the, especially for retail, will be more on the personalizations. You might call it the hyper personalization. We need to collect as much as data has for each customer, and we can provide the recommendations in term of both promotions and SKU that they might want, and to offer these consistency among online offline as well. So I think this is, this is the key task for us within this this year, next year.
Valerie Tan:Understand and within your own role at EVP of digital technology and transformation. Are there any future trends in technology or digitalization? They are very excited about for the retail segment.
Surachai Hirannitichai - Big C:Of course, generative AI. We try to look into the use case of generative AI for both customer front end and also the back end, that will help our agents to do their work more efficient.
Valerie Tan:That's a very hot topic in Thailand right now. And with that, I think I would like to get Khun Surachai to actually leave some last words or words of advice for all our digital transformation and technology leaders out there, your peers. What are some areas or pieces of advice you can give with regards to transforming, say, Legacy retail, physical retail into you know, currently what customers want with regards to Omni channel and hyper personalization,
Surachai Hirannitichai - Big C:I think the key for digitalization is the mindset of the companies, and you might need to be patients with your stakeholders and try to convince them on the benefit. Bringing in the digitalizations, and have to mutually agree, or Win Win between the IT system and their business partners. If you can achieve that, it will make a smooth transformation.
Valerie Tan:Thank you very much. Khun Surachai, and I think with that, we've come to the end of today's podcast episode. Thank you for joining us here today, and we look forward to the different projects that you'll be bringing for the different departments within Big C itself. Thank you.
Surachai Hirannitichai - Big C:Thank you. Thank you very much.
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