In 2020, eCommerce in Thailand ranked 26th largest market with a revenue of US $ 8 billion and this value placed the country even ahead of other developed countries like Finland. According to the latest report of the Electronic Transactions Development Agency (ETDA), Thailand will in this year itself turn into a 120 billion USD industry with a growth of 6.1%. In the pandemic, many businesses of Thailand shifted their focus to the business-to-customer model which is improving the eCommerce market in the country for the better. Even before when Thailand was hit with the pandemic, many retailers embraced the digital transformation attracting online customers. With the precautions taken in Covid like digital payment, social distancing and online shopping, retailers saw a spike in their business. This further strengthened the trend to sell the products directly to the customers. When customers do online shopping in Thailand, the product is swiftly delivered at the doorstep with the help of diverse logistics companies like eKart and China Post producing satisfied customers and enhancing the online business further.
Currently, there is plenty of opportunity for eCommerce growth in Thailand. Contributing factors to the growth of eCommerce in Thailand include acceptance of e-payment systems, improved internet connectivity, increase in mobile usage and improved logistics service. All the factors together gain the confidence of the consumers and make it convenient for them to engage in online shopping.
Further, the government of Thailand is also doing its best to improve the situation further for the businesses. The Thailand 4.0 policy is created with the objective to ensure broadband connection across all the villages of the country. The broadband connection will ensure that the digital gap is further reduced and will give way to new economic development that involves eCommerce. The usage of digital payment and its support by the government is also improving consumer confidence.
In 2019, the value of local eCommerce in Thailand was 4 trillion THD and during the pandemic in 2020, its value reduced to 3.7 trillion TBH. The decline was a result of Covid restrictions that affected both the manufacturing and transport industries. However, the retail and the wholesale industry still managed to be the largest contributor in 2020 to the e-Commerce value of Thailand.
In addition to that, the pandemic also drastically changed the consumer’s behaviour towards online shopping. To meet the needs of the post-Covid world, many enterprises shifted their focus to online business models to make it safe for the customers to shop. eCommerce platforms in the country can be divided into three categories: business-to-business (B2B) transactions, business-to-consumer (B2C) transactions and business-to-government (B2G) transactions. In 2020, the largest contribution was made in the B2C model followed by the B2B and B2G model.
According to reports by Hootsuite that considered the internet users aged from 16 to 64, in September 2019, 91% of the users searched the internet to buy a product or service. 87% of the users visited an online store and 85% of the users purchased the product. 28% of the customers made a purchase via either laptop or desktop while 74% made a purchase using their mobile phone. The trend remains the same in 2021 but has been enhanced with the Covid pandemic working as a catalyst. Interestingly, approximately 50% of the online sales taking place in Thailand are from abroad and are from China, Japan and the United States.
In addition to the growth in the B2C sector, even the B2B commerce is growing rapidly especially in the food and the service sector, followed by manufacturing and retail and wholesale. Most of the eCommerce activities in the country are driven through the PromptPay service, a government incentive for the national e-payment scheme. With the growth of the eCommerce business in the country, even the logistics companies are growing too. The competition between the different logistic services has become so fierce that the cost price of the services that they are providing has declined sharply creating more opportunities for profit for the eCommerce companies.
Citizens of Thailand are also actively using social media platforms to make direct purchases and social media marketing has become an important tool for eCommerce companies. It would be interesting to see how the eCommerce of Thailand will grow further after recovering from the blow of the pandemic.