BANGKOK – Thailand’s retail industry is under growing pressure, and the Commerce Ministry has issued a clear message. Retailers need to move quickly towards omnichannel retail, so customers get a consistent experience across every touchpoint.

Competition from big online platforms, along with a shaky economic recovery, is putting older business models at risk. The ministry wants retailers to use data and technology to link in-store and online sales, so they can stay relevant as buying habits change.

Poonpong Naiyanapakorn, Director-General of the Department of Business Development at the Ministry of Commerce, described the current period as a structural turning point for Thai retail. Speaking just before the new year, he pointed to slower growth, higher costs, and changing customer behaviour, all happening in an uncertain economy.

He said long-term success will rely on more than opening new branches. Retailers need to change how they operate. That includes using data and tech tools, such as customer analytics and AI, to build strong omnichannel models and keep operations sustainable.

The figures show why the ministry is concerned. New retail business registrations rose 32.52% from 2020 to 2024, reaching 1,842 last year. At the same time, closures increased, from 298 in 2020 to 332 in the first 11 months of 2025.

That points to tougher competition and rising running costs. Thailand now has 14,902 registered retail juristic persons, with a total capital of 136,794 million baht. Results from 2022 to 2024 moved up and down in line with wider economic conditions.

Foreign investment still offers support, totalling 11,571 million baht. Japan leads with 21.14%, followed by China at 18.98% and Singapore at 16.70%. Even so, fresh capital alone cannot protect retailers from local pressures.

Omnichannel Retail Becomes the New Basic Standard

The ministry’s focus sits on omnichannel retail, where physical shops and digital platforms work together as one. Online shopping keeps growing because it is easy to use and makes prices simple to compare. Even so, it does not fully replace the feel and convenience of a store visit for many shoppers.

Poonpong said businesses need to connect offline and online channels because that is now the standard customers expect. Practical examples include ordering online and collecting in-store, quick local delivery, and personalised offers based on customer data.

A strong omnichannel set-up links every interaction, including mobile apps, social media, websites, call centres, and in-store service. Retailers using this model can follow customer preferences across channels and make the journey smoother from start to finish. A shopper might browse on a mobile app, reserve an item online, then collect it in-store without delays.

This approach matches newer demands for value, ease, and speed. After the pandemic, more Thai shoppers have come to expect quick fulfilment, same-day delivery in some areas, and targeted promotions. Platforms like Shopee, Lazada, and TikTok Shop have helped push those habits into the mainstream.

Tough Competition Meets a Weak Economic Outlook

The ministry’s warning also reflects the wider economy. Forecasts for 2026 suggest GDP growth may slow to 1.5% to 1.8%, which would be the weakest in three decades outside crisis periods, based on projections from SCB EIC, the Bank of Thailand, and other sources. Slower global growth and US trade policies add to the strain. At home, high household debt and long-running structural issues continue to drag on spending power.

Traditional retailers, especially local grocery shops and small operators, are finding it hard to compete with e-commerce giants. Big platforms can push low prices, run constant promotions, and ship nationwide. Tourism recovery should help in key destinations and shopping areas, but the wider market still demands strict cost control and fresh thinking.

Online retail is also expected to keep gaining share. Modern trade is forecast to grow 5.0% to 5.5% a year through 2026, driven by online expansion, tourism returning, and infrastructure projects. Without change, many traditional retailers could lose ground quickly.

Digital Change Brings Openings for Retailers Who Act Fast

Even with the pressure, the ministry sees clear opportunities for businesses willing to adjust. Tourism is returning, and shoppers are watching prices more closely, which creates room for retailers who offer strong value and convenience.

Large retailers have already started moving. Department stores and hypermarkets are building stronger omnichannel platforms. Many are using AI to improve product recommendations and customer service, and some are automating parts of the store experience, including cashier-less formats. Central Retail and CP Axtra are investing in connected systems that align stock, pricing, and sales data across stores and online channels.

Industry observers say omnichannel strategies, supported by AI and big data, can improve efficiency and make customer offers more relevant. Smaller retailers may not have the same budgets, but partnerships with platforms and simple tools such as customer analytics can still help them compete.

Sustainability also matters more each year. Retailers that build greener practices into their day-to-day operations can appeal to younger shoppers who care about waste, packaging, and responsible sourcing.

2026 Brings a Simple Choice to Thailand: Adapt or Fall Behind

As Thailand moves into 2026, the Commerce Ministry’s message is direct. Retailers need to speed up change and modernise how they sell. Those that build strong omnichannel retail, with data-led service across every channel, are more likely to grow. Those that delay may struggle to stay open as shoppers continue to shift towards convenience.

Poonpong said tourism and changing buying habits still offer upside, especially for retailers that focus on value and convenience.

For retailers across the country, from major Bangkok shopping centres to small provincial stores in the North, the next step is clear. Investment in technology and tighter links between online and offline sales will shape who stays competitive in a fragile economy. Omnichannel retail is no longer a nice extra; it has become a core part of survival.