Thailand is a middle-income country with an open economy that, in 2020, ranked 26thas the largest market for eCommerce with USD$8 billion in revenue, coming ahead of Saudi Arabia and Finland. Since this country is projected to continue growing exponentially in the coming years, we took on the task of investigating the most recent E-commerce Trends in Thailand.
Thailand’s economy is forecasted to grow between one and two percent in 2021 as COVID’s negative impact begins to disperse. However, it is true that there are a couple of things that changed in the landscape of e-commerce in this country.
Which is why in this article we’ll tell you everything you need to know to expand your business and make your products available for Thai buyers.
Let’s dive in!
Over the next few years, Thailand’s market is expected to continue expanding according to the Statista Digital Market Outlook. Annual growth rate is expected to increase by 14% with a year over year growth of 60%, which is a sign that the market might be moderately flooded. Also, E-commerce is expected to continue growing.
Currently, 44% of the Thai population has made at least one online purchase in 2020 and it is only logical to predict that eCommerce will continue to increase with the rise of new markets and the development of the existing ones.
There are five categories that stand out in Thailand’s e-commerce trends:Electronics and Media which represents 34% of eCommerce revenue in Thai
With Thailand’s E-Commerce growth as an important part of the economy, now is a good time for online sellers to venture into their market.
An overview on the online business is reason enough to think about testing the waters, but there are other insights you should know about the market trends besides the fact that eCommerce revenue in Thailand is expected to grow to US$12.3 billion by 2025.
According to Statista, as of March 2021 there were 36.6 million online shoppers in Thailand and, as mentioned above, the number is only going to increase. Breaking it down, 52% of 20–29-year-olds are online users and 34% of them are 30–39-year-olds. Hootsuite published back in April of 2020 that 74% of users between 16 to 64 made an online purchase.
It’s worth mentioning that Thai users spend an average of ten hours online and over 50% of the population lives in urban areas, which makes logistics a lot easier.
Also, it should be noted that Thailand ranked #9 in eCommerce’s share of total sales transactions at 10% worldwide.
So far, users prefer to use the payment method of Cash on Delivery.
However, after the pandemic hit, there is an ongoing trend of choosing credit card payment or bank transfer. Since the mandatory distance policies started, customers have been encouraged to use their credit cards more instead of cash.
Besides, with the increase of smartphone use, the e-wallet is starting to become a popular payment trend. Digital wallets are used to pay for 23% of e-commerce transactions nowadays, along with bank transfers.
Discount vouchers and promotions are also important to encourage the use of digital payment methods on e-commerce marketplaces. Popular electronic payments in Thailand are PayPal, TrueMoney and Airpay.
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There is also a change happening in how marketing works.
Although brands do invest in digital campaigns, most of their investment goes to traditional channels like TV and newspapers. Digital/Internet advertising spend is relatively low in comparison to other networks (US$133 million).
Brands spend more on traditional advertising mediums like TV and newspapers. TV accounts for the highest market spend and the only advertising spend to surpass US$1 billion.
Back in 2019, Thailand implemented reforms in business regulations to make it easier for entrepreneurs to start a business with time frames being between twenty-nine days to six days.
Thailand also gained six positions in 2020 in the World Bank’s "Doing Business 2020” ranking.
This was due to the efforts made by the efforts made by the government to speed up the process and by adopting new systems to provide services online.
Recently, the Thai government adopted a new model called Thailand 4.0, which is a plan that focuses on making Thailand’s economy value-based over the next 20 years. The plan is to support sectors like science, technology, innovation, and creativity.
Thailand is also planning to improve its education system so they can have highly educated workers in target industry sectors like automotive, smart electronics, medical and wellness tourism, agriculture, and biotechnology, as well as robotics, aviation, and logistics, digital industries, and medical hubs.
This is part of the government’s plan to turn Thailand into a developed country by 2036.
It’s important to mention that the Thai government is also investing in having the right infrastructure to support economic growth. There is currently a $3 billion project to expand the port capacity in the Eastern Seaboard area.
Once the project is done, Laem Chabang will be able to handle 18 million twenty-foot equivalent units a year, which is important to consider if you’re importing goods.
The easiest and most effective way to enter Thailand’s market is through partners.
Having a local agent or distributor as a partner can help you reach the right potential of Thai buyers. A partner can share with you the knowledge and expertise and they can be a key factor in establishing distribution networks and creating rapport and relationships with business and government officials.
If you have no idea where to start, the Commercial Section in the U.S. Embassy in Bangkok has a whole range of business development services to provide for U.S. businesses who are interested in entering the market or expanding their presence there.
Industries in Thailand have to face strong competition from global and local suppliers of goods and services. Therefore, local companies tend to be family businesses with third-generation business leaders who not only have deep knowledge of the industry they work in but also are highly educated.
Here are a couple of more things to keep in mind:
It is a fact that the pandemic has caused a few setbacks in the global economy, including Thailand. However, online shopping rose due to COVID-19 and it is already a trend that is here to stay.
As many other countries, Thailand continues to show positive trends with promising projections for the following years.
E-commerce continues to become popular as internet penetration continues to increase among users of all ages as well, so this could be a great climate to enter a new market, depending on your products catalog and business vision.
AMZ Advisers is a full-service eCommerce consultancy focused on creating growth opportunities for brands, manufacturers, and private labels across the US, Europe, Canada, and Asia.
The AMZ Advisers team has been able to achieve incredible growth on the Amazon platform for their clients by optimizing and managing their accounts and creating in-depth content marketing strategies.