Expanding your eCommerce operations into Thailand opens up many exciting business opportunities. In 2021, Thailand’s eCommerce generated $8.5 billion in revenues. Every year, eCommerce in Thailand grows, and new businesses are forming. Statista projects the local eCommerce market value to be $20.90bn by the end of 2023.
Online platforms are becoming the most popular method for distributing goods and services. Due to the increased demand for online retailers, more people choose digital shopping experiences. Customers in Thailand choose eCommerce because of lower online prices, a wide selection of goods, free delivery, and excellent customer service.
Understanding the ins and outs of shipping to Thailand is a great jump-off point to expanding your business to the region.
Thais have demonstrated an unprecedented interest in internet shopping after the COVID-19 pandemic. According to a 2022 survey, over 54 million people in Thailand, mostly between 16 and 64, are Internet users. eCommerce businesses are eager to establish themselves in Thailand since they have a vast customer base.
JP Morgan claims that rising domestic eCommerce vendors will significantly increase sales volume. The Thai eCommerce market is composed of roughly 30% cross-border transactions. Nearly 50% of online buyers have already made an international transaction.
The top five e-commerce websites currently are Shopee, Lazada, Kaidee, AliExpress, and Amazon, all of which are seller platforms with cutting-edge shipping and logistics systems.
The Basics of Shipping to Thailand
To get to Thailand, you’ll need a logistics service that can reliably and quickly deliver your goods to Thai customers. Look for partners who know what you can and cannot transport into the country and how to get paid for your goods. Although shipping partners’ experiences may differ, it always pays well to research and communicate your needs properly.
Cargo delivery involves several steps in cross-border shipping. That includes the first mile, customs clearance in the country of origin, air freight, customs clearance in the land of destination, distribution, and final mile delivery.
For example, your merchandise could be transported by truck from an Indonesian supplier’s warehouse to Jakarta’s Soekarno-Hatta Airport (CGK). After clearing customs, it takes air freight to travel to Bangkok’s Suvarnabhumi Airport (BKK). The final delivery is then made to the customer’s address using a vehicle or motorcycle.
Different shipping partners are more efficient in specific supply chain segments. While some businesses solely focus on a single delivery stage, others offer end-to-end fulfillment services that cover every step. Find a shipping partner that can best meet your eCommerce logistics requirements.
It’s a good idea to take your delivery deadline, the shipping partner’s areas of expertise, and the mode of transportation into account when choosing a shipping partner. Here are the three main ways that global goods are transported into Thailand.
1. Air Freight
Due to its quick and dependable deliveries, air freight is the preferred means of transportation for many online retailers when shipping to Thailand. Bangkok Airport, often known as Suvarnabhumi Airport, and Don Mueang Airport are Thailand’s two main airports.
2. Sea Freight
Sea freight is much slower than air freight but also significantly cheaper. Be aware of any lead times when transporting your items by sea. Bangkok Modern Terminal (THBKK), Laem Chabang (THLCH), Map Ta Phut (THMAT), and Sattahip Commercial Port (THSAT) are Thailand’s principal ports.
3. Cross-Border Trucking
Road transportation accounts for a sizable share of freight transportation in Thailand due to its advantageous location in the Greater Mekong Subregion. Roads in Thailand are well-developed and connect up to 98.5% of the population. They serve as a crucial last-mile transportation route, especially for many Thai eCommerce clients in Greater Bangkok.
You might consider road freight as a fulfillment option if your supply sources are closer to Thailand, such as Southern China or Malaysia. Trucks are more affordable than air freight for shorter distances, and goods reach Thailand. When choosing your road transport partner, consider their geographic coverage of Thailand and the costs of transporting your clients.
Shipping to Thailand: Customs Clearance, Import Duties, and Tax
The Thai government introduced its “Thailand 4.0” economic model to reorient and improve the nation’s economy from production to knowledge- and service-based. Thailand wants to lead South East Asia’s digital hubs within the next ten years.
Before approving products for import, Thailand’s customs demand significant documentation. For this, most carriers work with regional customs brokers familiar with the established practices and necessary documentation formats.
For you to be able to start shipping to Thailand and bringing your products into the country, you’ll need to provide the following documents to the concerned agencies:
- Import Declaration
- Commercial & Pro forma invoice
- Packing List
- Airway bill or Bill of Lading, if needed
The Thai Ministry of Commerce has authority over some products, and those goods are subject to various standards and regulations. For instance, to simplify their clearing through customs, some commodities require additional paperwork, such as a permit and/or import license from organizations like the Thai Food and Drug Administration.
You’ll need to be aware of the import laws before shipping to Thailand. A quick look at Thailand’s restricted and prohibited items reveals the following:
- Fresh Food
- Hazardous Goods
- Firearms and Weapons
- Questionable Publications
- Fake Currency
- Counterfeit Goods
Imported goods may be held in a customs-bonded warehouse for up to 45 days without submitting an import entry and 60 days with the request of an import entry. Customs duties are due upon the vessel’s arrival carrying the imported goods. Before the goods are released, all landing and storage fees must be paid.
The cost, insurance, and freight (CIF) method is employed in Thailand to determine import duties and taxes. This is based on the imported products’ value and related shipping expenses.
Customs law violations typically result in the recovery of back taxes and fines. The most severe offenses include smuggling and evading customs duties. Other common offenses are failing to follow customs procedures and making false claims. The applicable Customs Act clauses specify the statutory penalties.
Depending on the duty shortfall stated in the import entry, a duty evasion offense is usually resolved with a punishment ranging from 50 to 200 percent. A value-added tax (VAT) fine will also be assessed based on the duty fine.
In addition, import taxes will be assessed depending on the Harmonized System Code‘s classification of the items. You can use the search feature on the Thai Customs website to find out how much import duty will be applied to your items. Typically, depending on the type of goods being sent, they impose an import duty of between 5 and 30 percent.
On the other hand, there is a VAT exemption for online purchases made from merchants outside Thailand and delivered to Thailand that cost less than 1,500 Baht (about US$45). For online purchases of goods costing more than 1,500 Baht, the VAT is currently set at 7%.
Import Duty Product Categories
Depending on which is higher, duties are assessed on a specific or ad valorem basis. The applied ad valorem taxes range from 0% to 80%. According to the Customs Tariff Decree, certain commodities are eligible for exemptions from import taxes. Preferential duty rates are available on imported goods from nations with which Thailand has a preferential free trade agreement (FTA).
These include the member states of the Association of Southeast Asian Nations (ASEAN). Other countries also enjoy preferential trade agreements when shipping to Thailand. They are Australia, New Zealand, Chile, India, Japan, Peru, China, Hong Kong, India, Japan, and South Korea.
For your reference, here are the applicable import duties for the various goods that can be brought into Thailand.
|Mobiles – 0%||Accessories – 30%||Home Decor – 20%||Fashion – 30%||Dry Food & Supplements – 35%|
|Tablets – 0%||Accessories (Battery) – 10%||Luggage – 20%||Watches – 10%||Home Appliances – 20%|
|Computers – 0%||Accessories (Battery) – 10%||Toys – 5%||Jewelry – 5%||Audio video – 10%|
|Cameras – 0%||Health & Beauty – 5%||Sports – 10%||Pets Accessories – 7%||Documents – 0%|
|Gaming – 10%||Books & Collectibles – 0%||Shoes – 30%||Documents – 0%|
Board Games – 10%
Importing your goods and shipping them to Thailand can be complicated and intimidating. That’s why it’s a great idea to work with a third-party logistics (3PL) partner that knows the in-and-outs for moving goods into and around Thailand.
ZhenHub helps you connect globally with ease. Get integrations to some of the most popular online marketplaces. We’ll help manage your supply chain and give you complete visibility and control with our suite of digital eCommerce tools. Get started by signing up at our website for free.