Thailand is a fast-growing market and one of the largest e-commerce markets in Southeast Asia. To prosper, new entrants will need a localised product and a customer experience that is well adapted for mobile devices.
The IMF predicts that the Thai economy will grow by 3.3% in 2022 and 4.3% in 2023 . However, this may need to be revised down. The country’s central bank is now estimating full-year growth of between 2.2% and 3.5% for 2022 . According to the latest available labour-market figures, the Thai unemployment rate is just 1.64% .
Thailand’s e-commerce market
The Thai e-commerce market is worth US$ 76 billion and is growing at a rate of 20% a year . The average Thai online consumer spends US$1,074 a year with cross-border and Thai e-commerce merchants . But the sector is still small, e-commerce sales make up just 13% of all the country’s retail sales .
The number of Thai households that used e-commerce rose by 58% in 2020, with a massive rise in the food category of 74% compared to 60% for the non-food segment . The Thai e-commerce market share for FCMG goods has risen from 14% in Q1 2019 to 23% in the same period in 2021 . On 1st September 2021 non-resident companies providing digital services in Thailand will be expected to register to pay 7% VAT if their annual income exceeds 60,000 USD .
Thirty percent of online shoppers have shopped cross border . And Thai cross-border purchases spend US$8.1 billion a year . E-commerce users complete 60% of all online purchases on a mobile device .
Payment methods in Thailand
In the Thai payments market, cards have a 17% share of the market. 19% use e-wallets, 31% bank transfer and 22% prefer cash payments . The remaining 11% is shared among various cross-border and Thai local payment methods . The card market is dominated by Visa, with a 68% market share . Mastercard is second, with 20% of the card market. American Express has just 1% . Local cards and other payments make up the last 11% .
Enabling and limiting factors
82% of Thais have a bank account but just 10% have a credit card . However, this is not the full story. Although relatively few people are completely unbanked, as many as 45% are underbanked — with only a deposit account and no access to any other financial services . But a recent report by the World Bank notes the potential of fintech to transform financial-services in the country for the better, with 140 native fintech firms already operating 43% of digital-finance activity in the country focusing on payments .
70% of Thais have Internet access and 54% have an Internet-enabled smartphone . According to eMarketer, more than 90% of Thai Internet users rely on their smartphone to go online compared to only 25% who use a laptop . Any market strategy for the country must be mobile first, or risk losing out on almost half the available customer base.
- Original PPRO research