Are you a foreign investor seeking to start an eCommerce business in Thailand in 2022? Then this article will help you as your guide in the process.
Thailand is a great growth environment for e-commerce enterprises due to its rising internet user population. The Thai e-commerce market is currently valued at US$3.5 billion and is predicted to grow at a 13.2 percent annual rate to reach US$5.8 billion in 2022.
Consumers are increasingly choosing to shop online rather than in stores. In Thailand, the Internet is becoming an inseparable element of life, especially as new technologies change the way retail is given to customers.
To gain market share in Thailand, Southeast Asia’s second-largest economy, both domestic and international retailers and service providers are learning about digital channels in order to capitalize on possible online prospects.
This article is intended to help you take advantage of e-commerce opportunities in Thailand’s growing market. It gives an overview of Thailand’s digital retail sector today, as well as major players driving consumer behavior and other elements to consider before starting an online business or selling products through current online channels.
Current State of E-Commerce Industry in Thailand
Thailand, Southeast Asia’s second-largest economy, has one of the region’s biggest internet user populations. In the country, there are around 57 million internet users who are proficient in the use of digital technologies, mobile devices, and e-commerce.
Thailand’s e-commerce platforms are often split into three groups.
Consumer to Consumer (C2C) eCommerce Platforms
This business strategy makes it easier for people to buy and sell products or services. The classifieds section of a newspaper, eBay, or Craigslist are examples of C2C. Sellers offer products online, and transactions often take place offline after the buyer and seller establish contact (unless the platform facilitates payments). C2C also includes social commerce, such as transactions made through Facebook.
Popular examples of this type of eCommerce platform in Thailand are Hipflat, Kaidee, and Weloveshopping.
Business to Consumer (B2C) eCommerce Platforms
The B2C business model refers to an online transaction of products or services between a brand (a company) and a customer. This is the most well-known and commonly used sales model in the world. Customers want official brand sites to provide 24-hour customer service, several payment choices, and flexible return policies.
Popular examples of B2B eCommerce platforms in Thailand are Lazada and kiehls.co.th.
Business to Business (B2B) eCommerce Platforms
In Thailand, businesses still frequently conduct business with one another via offline communications, such as a secretary ordering bulk printing paper over the phone.
Platforms are being established to streamline commercial transactions because traditional supply chains are multi-layered and complex. Consumers have grown accustomed to the B2C experience online and expect the same from the B2B experience.
Officemate is one of the best example of B2B eCommerce platforms in Thailand
The expansion of online can be linked to numerous economic causes, including the government’s push for its digital ‘Thailand 4.0’ goal, which aligns with the global trend in consumer behavior toward online.
Local and foreign companies, particularly Chinese Internet behemoths, are rushing to develop e-commerce operations through new ventures or acquisitions in order to secure a position in Thailand’s burgeoning digital economy.
Main Drivers of Growth for eCommerce Platform in Thailand
Thailand 4.0 Agenda
Thailand’s government launched the “Thailand 4.0” economic model to reorient and improve the country’s economy away from manufacturing and toward information and services. Thailand aims to become a key digital hub in Southeast Asia within the next ten years.
One of the major tenets of this vision is for digital technology to drive the country’s economic growth, strengthen the industrial sector, and improve the lives of its residents.
Internet Savvy, Young and Mobile-first Generation
In a country of 69 million people, at least 48 million Thais own cell phones, 57 million have Internet connection, and 46 million utilize social media through mobile devices.
Thailand has an Internet penetration rate of 82 percent, and Millennials (also known as Gen Y) account for the majority of the country’s 69 million citizens (19 million). The bulk of the group spends 53.2 hours each week online on average.
Only 28% of Thai customers use desktops and laptops to visit websites. Whereas, 69 percent use their cellphones as their primary device to do so.
Thai customers’ browsing habits reflect the country’s mobile-first approach. Only 7% of consumers use computers to browse for product information, compared to 15% who use smartphones. This conduct highlights the significance of mobile-first businesses and mobile-friendly websites.
Large scopes of Foreign Investment in Thailand
Thailand’s size and e-commerce potential make it an attractive market for international investment. Alibaba and JD.com, two Chinese Internet giants, have invested in Thailand in the previous two years. Alibaba invested USD 3.64 billion in Lazada in 2018 and invested USD 304 million in the first stage of the Eastern Economic Corridor (EEC), while JD.com invested $454 million in a joint venture with Thailand’s largest retailer, Central Group.
In comparison to the payment, logistics, fintech, and food and beverage sectors, e-commerce has received the most foreign investment.
There is a great increase in the interest from foreign investors in Thailand’s e-commerce sector. Therefore, for this reason local firms are improving their competitiveness and more SMEs in Thailand. Additionally, they now have the motivation to innovate in the areas of online commerce, fintech, and artificial intelligence (AI). More cooperative ventures between offline wholesale companies and internet companies arose from the investment.
The Bottomline
So, there is a growing consumer base, the Thai Board of Investment Tax Incentives and Thailand 4.0 Agenda. All for your eCommerce business in Thailand in 2022. Isn’t this enough to research more in this field to start your business in Thailand? No!
You will need a reliable legal and accounting firm for your eCommerce Business in Thailand in 2022. The company incorporation laws, taxation regulations and intellectual property rights are very stringent. As a foreign or even Thai investor, you will need local support. Book your Free Session of Consultation with our Business Advisors. Additionally, you may also leave us an email at [email protected] with your requirement details.
