The Thailand eCommerce landscape continues to be an ideal environment for developing business with the country’s rapidly rising internet user base. Recent research indicates that 48.59 million Thais, or 69.5% of the population, use the Internet. Meanwhile, over 36.6 million people, or 52.3% of the population, use eCommerce. Thailand is a well-developed market because over half the population already uses eCommerce.
By 2023, eCommerce sales are expected to account for 10% of all retail sales in Thailand, according to Statista data. This is notable, especially given Thai’s preference for offline shopping. Thailand’s eCommerce industry is also expected to grow at a CAGR of 11.93% (2023-2027), resulting in a projected market value of US$32.81bn.
eCommerce will undoubtedly be one of Thailand’s best industries in 2023 in terms of consumer acquisition and return on investment.
Internet shopping is becoming increasingly popular among consumers compared to traditional retail. Thailand’s society is becoming increasingly dependent on the Internet. Its usage will grow, especially as new technologies emerge and new ways are used to deliver to customers.
Increased internet, mobile phone use, enhanced logistics, and e-payment systems give consumers the confidence to shop online.
The Thai government has committed to online expansion through its “Thailand 4.0” policy. National leaders and lawmakers have set aside a budget to build a nationwide broadband network for every town and city. This nationwide broadband network will support modern economic development by fostering eCommerce and bridging the digital gap.
Their government plans to develop new digital application platforms to support and improve online operations, including e-government, e-payments, and the e-marketplace. The ultimate objective is for the locals to begin operating eCommerce enterprises for their goods and services. Government support is expected to boost the widespread adoption of digital wallets to coincide with rising smartphone usage.
A Quick Look at Thailand eCommerce Consumers
Thailand is Southeast Asia’s second-largest digital economy, after Indonesia, and ahead of the Philippines. Online travel and media are only second to eCommerce in the nation’s thriving online retail business. The largest forces behind Thailand’s eCommerce businesses are e-transportation and food delivery. According to reports, there are about 43.5 million potential consumers in Thailand’s e-commerce market, with a gross merchandise value (GMV) of $19bn.
Thai consumers can be classified into three groups based on their shopping habits: ages 51 to 71, ages 37 to 50, and those aged 17 to 36. eCommerce participation rates for the first section are 5.39%, the second segment is 32.69%, and the third sector is 61.92%.
Those from 17 to 36-year-old consumers are often seen as the best target market for online businesses. In addition to spending the greatest time on any eCommerce site, they also have the highest expectations of these companies.
Online shoppers from Thailand have expressed satisfaction with the online marketplace. A report said that 71% of the population uses these platforms twice a month, raising the website or app engagement and retention rates. Thai consumers’ ability to make purchases online is steadily growing. There is no better time for online merchants to explore expanding their businesses into Thailand.
Many international eCommerce platforms have been drawn to Thailand’s growing online shopping scene. Business owners start online stores in several marketplaces to meet local customer demands.
Lazada is a well-known eCommerce platform globally, as it presents every category on its application and website. It features electronics, fashion & lifestyle, health & beauty, groceries, toys, automobiles, etc. Lazada covers almost everything a customer would want, thus, making it one of the best marketplaces for Thais.
A Singaporean multinational company has established a strong foothold in Thailand. It is among the top marketplaces in the country. It encompasses a variety of lifestyle categories, such as apparel, electronics, and others. Additionally, it offers the convenient option of doorstep grocery delivery.
This online platform exclusively sells tech products. This includes IT products, personal computers, laptops, and gaming accessories. Jib provides customers with an appealing selection of electronics at reasonable prices. This marketplace targets tech-savvy consumers who want to purchase new goods and equipment online. While Shopee and Lazada are accessible in several Southeast Asian nations, practically all of Jib’s revenue comes from the Thai market.
HomePro is a local marketplace that, as the name suggests, focuses on selling home products. On their website, you can find everything from toilets, refrigerators, shower handles, and doorknobs. Examples of well-known brands sold on the website include LG, Samsung, Electrolux, Hitachi, and Xiaomi.
The biggest classifieds site in Thailand was launched in 2011. Platform users can purchase and sell various products and services, including cars, houses, electronics, apparel, and more. Kaidee facilitates transactions by bringing together buyers and sellers in nearby communities Kaidee is one the top-rated marketplace for buyers and sellers in Thailand for real estate, cars, and other goods and services.
Note that the website is only available in Thai and offers no cross-border sales.
Rising Trends for Thailand eCommerce
At the height of the COVID-19 pandemic in 2020, Thailand’s online retail growth experienced phenomenal growth. That year, the nation had the largest percentage of new users participating in the digital economy. And 58% of families were grocery shopping online.
Online product browsing time is increasing among consumers. Time spent browsing products on eCommerce and social commerce platforms in 2022 is around 1-3 hours. The largest market and source of 48.6% of Thai eCommerce sales is Food & Personal Care. Other notable segments include:
- Furniture & Appliances at 7.2%
- Electronics & Media at 27.0%
- Fashion at 8.8%
- Toys, Hobby & DIY at 8.5%
- Fashion at 8.8%.
Due to the increase in foreign interest in Thailand’s eCommerce sector, local businesses are investing more in online commerce, fintech, and artificial intelligence (AI). As a result, more collaborative relationships between physical wholesale enterprises and online businesses emerged.
Digital Financial Services
Despite eCommerce gains, Thailand is still very much a cash-based country. However, online payment methods are now becoming widely used. Fifty-five percent (55%) of Thai consumers use credit cards as payment for online purchases. The convenience of doing so has significantly fueled the rise of online shopping in Thailand. Other payment options are also gaining popularity because of the widespread use of smartphones. Digital wallets like TrueMoney, PromptPay, and Rabbit-LINE Pay have grown in popularity over the past two years.
Vertical and horizontal markets are vying for market dominance in Thailand, where the terrain changes quickly. Incumbent marketplaces, which comprise 51% of the Thai eCommerce business, are currently valued at 770 billion baht or $22.18 billion.
Thailand’s e-commerce is moving toward vertical category-specific markets that meet specific consumer demands, following international trends. Some local examples are Pomelo for clothing and Konvy for cosmetics. With a focus on delivering groceries and meals in under an hour, quick commerce is another vertical marketplace growing quickly.
Soon, more vertical business-to-consumer markets should quickly appear, opening up opportunities for handicrafts, luxury goods, pets, and even vehicles.
More online merchants are engaging in and implementing AI across all facets of their retail and eCommerce operations. Eighty-four percent (84%)of e-commerce companies are either actively working on integrating AI solutions or have it as a high priority.
A focused marketing strategy that uses deep personalization based on client interactions is one advantage that comes with integrating AI into eCommerce operations. AI systems can accurately meet customer demand by analyzing large data, thus increasing retention rates and sales.
A more effective and seamless sales process can be achieved by automating customer assistance, discount choices, invoicing, and email marketing.
Using customer data insights can help improve the efficiency of the sales process.
The adoption of AI tools reduces operating expenses and boosts productivity by lightening the workload of employees.
What You Need to Know Before Getting into Thailand eCommerce
Starting an online business is simple, but it takes much effort to succeed. Along with creating the company, you must also complete some legal documents & requirements before you start selling in Thailand.
You need legal permission documents for your business before selling online. These include an eCommerce license and registration under the Office of the Consumer Protection Board (OCPB). This safeguards the consumer’s rights as it considers your eCommerce company as a registered one, fit for direct sales. Foreign businesses must also acquire a Foreign Business License (FBL) or Foreign Business Certificate (FBC) from the Department of Business Development (DBD).
As a legally licensed online merchant in Thailand, your business will be subject to product liability, data protection, and customer protection laws. You will also need to be current on any regulations regarding payment solutions and foreign exchange.
Every Thai corporation is legally required to have a Thai shareholder holding 51% of the company’s shares or one of the owners listed in the Foreign Business Act of 1999. However, a foreigner can launch an online store in Thailand with a Board of Investments (BOI) company license. With this BOI company license, you can benefit from tax and non-tax advantages and full control of the business.
The growth of Thailand’s eCommerce isn’t slowing down. Online retailers can play a more significant role as consumers continue to engage in the digital economy. By bringing a seamless online shopping experience to the locals, you can reap the benefits of one of the largest eCommerce markets in Southeast Asia.
ZhenHub is your gateway to scaling your business globally. With multiple marketplace integrations, our international network of fulfillment partners will get your products to a broader audience. Getting started is as easy as signing up at our website now.