Are you considering selling online food in Thailand, or dietary supplements, or retail medical device to expand your market in ASEAN?
Kha Group has the solution for you.
Our One Stop Shop Service allows you to register, import, stock and deliver your products in Thailand through the major e-commerce platforms.
Let’s see the market in detail.
The eCommerce market in Southeast Asia is one of the fastest-growing and most promising with its projection to grow to $11 billion in 2025. According to the Electronic Transactions Development Agency, in 2017 the total eCommerce market in Thailand was estimated at $2 billion. The total Thai eCommerce revenue is expected to reach $3.5 billion in 2018. The driving factors arise from increased Internet and mobile phone use as well as improved logistics and e-payment systems. This creates heightened convenience and consumer confidence to shop online. In addition, the quality and reliability of online shopping services have improved significantly, and the acceptance of eCommerce has increased throughout the country.
Further, the Thai government focuses on its “Thailand 4.0” policy, which includes allocating a budget for the specific purpose of constructing a broadband network for all villages across the country. Having a nationwide broadband network will help bridge the digital divide and promote modern economic development through the eCommerce channel. Moreover, the government has a vision of creating the next generation of digital application platforms to accommodate and promote online activities including e-marketplace, e-payments, and e-government. Eventually, the goal is for villagers to start doing eCommerce businesses for their local products and services.
Current Market Trends and Domestic eCommerce (B2C)
eCommerce platforms in Thailand are divided into three categories: business-to-business (B2B) transactions, business-to-consumer (B2C) transactions, and business-to-government (B2G) transactions. Among the three groups of transactions, B2B transactions are the largest and account for 55%, followed by B2C transactions at 29% and B2G transactions at 16% respectively.
According to the global marketing research firm, Nielsen, Thailand’s online retail eCommerce market, excluding online travel, will reach $3 billion by 2020, an increase of $2 billion since 2015.
The eCommerce market in Thailand is currently the second largest in Southeast Asia and is expected to grow around 22% annually until 2020. With support from the Thai government, a “Digital Thailand” initiative, that started in 2016, has brought about a wave of opportunities for businesses across different industries to digitize their operations and services, especially for SMEs seeking to undergo digital transformation. As a result, cross-border market opportunities offer growth rates of approximately 25%, which is well above those found in most traditional retail markets. Cross-border B2C eCommerce is estimated to grow to $1 trillion in 2020.
B2B eCommerce in Thailand is also growing rapidly due to Internet development and mobile transformation. According to the Electronic Transaction Development Agency, the sectors using eCommerce platforms to increase their productivity include the food and service sector with 31%, followed by manufacturing at 16%, and retail and wholesale at 15%. Interestingly, demand for eCommerce services is coming not only from Bangkok but also from the other provinces, such as Nonthaburi and Chonburi.
Thailand’s online retail commerce is driven by several factors including increased smart phone penetration and intense competition among eCommerce operators. The government’s PromptPay service, which falls under the national e-payment scheme, is the key driver to stimulate eCommerce activities. Over the last couple of years, many courier service companies started launching their eCommerce platforms in Thailand, bringing domestic end-to-end delivery to the market. Consequently, delivery costs for eCommerce products have sharply declined from $1.3 per piece in 2015 to $0.5 per piece in 2016 due to the fierce competition among logistic service providers.
Selling online food in Thailand: Online Payment
Growth of eCommerce can boost the use of e-Payment because it can make purchases of goods faster and more convenient. Thailand’s online and mobile banking market could reach maturity within six years. This is largely driven by the national e-payment system and the significant growth in mobile broadband penetration. By 2021, over 85% of the population will go online via mobile phone, an increase of 31% currently.
With a heavy promotion of the national e-payment scheme, both government and private sectors have been encouraging stores and consumers to move away from cash and move towards e-Payment. According to the Thailand e-Payment Trade Association, cash transactions are expected to fall from 90% to 50% within the next couple of years.
Mobile commerce will continue to see strong growth in the coming years, especially among millennials who are comfortable using their smartphones to shop. Thailand is a regional leader in mobile commerce, as 52% of online transactions take place via mobile devices (only South Korea is higher with 58%).
According to the Thailand Marketing Research Society, 71% of smartphone users in Thailand shop online an average of twice a month, while 90% intend to shop online in the future. Thailand’s smartphone penetration increased from 30% in 2015 to 34% in 2017. The rate is expected to reach 37% in 2018.
Digital Marketing and Social Media
Social e-commerce is highly influential among digital consumers, with more than 80% of digital consumers using social media options to search for products or connections with sellers. Thailand also leads the world in social e-commerce, according to the survey findings from PricewaterhouseCoopers (PwC) in 2016. In addition, 92% of online shoppers in Thailand use Facebook to research new products before making purchases.
Additionally, the national e-payment system will have a huge impact on
social media commerce in Thailand. Thai shoppers are already high on the
list of consumers who purchase directly through social media, according to the
same PwC survey, which found that 51% of online consumers in Thailand have made
purchases via social media.
According to the Electronic Transactions Development Agency, Thailand currently has around 51 million Internet users, 48 million Facebook users, 41 million LINE users, 13 million Instagram users, and 9 million Twitter users.
Thailand’s online retail market is expected to reach $10-15 billion by 2020, a significant increase from the $2 billion in 2015. As for major holiday shopping, Thai people mainly shop online at the end of the year.
Selling online food in Thailand can be safe and profitable, but the manufacturer must consider that Rules are strict and compliance must be respected. In order to do it, only two roads are walkable: opening your local branch in Thailand or using Kha Group One Stop Shop Service. Two know more about it contact firstname.lastname@example.org
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