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E-Commerce in Thailand: Outlook & Retail Trends in 2023

Last Updated: October 30, 2023

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How's The Development of E-Commerce in Thailand?

Thailand’s e-commerce market experienced significant growth during the Covid-19 pandemic as lockdowns drove consumers to online shopping, social media, internet telephony, and streaming services. According to the Electronic Transactions Agency, business-to-consumer (B2C) and business-to-business (B2B) e-commerce reached $49 billion by the end of 2020, up from $33 billion in 2017. A report by JP Morgan estimates that e-commerce accounted for only 2% of overall retail sales in 2020, indicating significant potential for growth. Mobile devices were used in 57% of total e-commerce transactions. Despite this growth, only 23% of the population shopped online in 2020, but the average annual spending per customer was one of the highest in Southeast Asia at $1,738. The most popular segments of the market were travel (57%), followed by consumer electronics (11%), and fashion (10%).

The wider availability of internet services, widespread use of internet-enabled smartphones, as well as improved logistics and e-payment systems are the driving forces behind e-commerce. The Economic Intelligence Unit (EIU) estimates that internet user penetration per 100 people in Thailand will increase from 75.1 in 2020 to 81.5 by the end of 2025. The number of broadband subscriptions is projected to grow from 11.4 million in 2021 to 13.4 million by 2025.

Thailand was the first nation in Southeast Asia to see the commercial rollout of fifth-generation (5G) services, after the National Broadcasting and Telecommunications Commission (NBTC) conducted a 5G spectrum auction in February 2020. AIS activated its 5G network in February 2020, True Corp launched 5G services in 77 provinces by the end of 2020, and DTAC launched 5G services in six major cities in the first quarter of 2021.

The rise of internet usage in Thailand is attributed to government initiatives and lower access charges, particularly for broadband connections. As part of its Thailand 4.0 initiative, the government launched the Village Broadband Internet or Net Pracharat project in 2017. The project invested in digital infrastructure to strengthen the national broadband network and provide affordable high-speed internet access across the country. The project was completed in 2019 and included the installation of free public Wi-Fi hotspots in tens of thousands of rural villages by the NBTC and state-owned telecom operators.

Online & Offline Retail in Thailand
Unit: Billion USD
Online & Offline Retail Growth in Thailand
Unit: %
Retail Value Added (% of GDP) in Thailand
Unit: %
E-Commerce Sales a a % of Retail in Thailand
Unit: %

Competition Among E-Commerce Platforms in Thailand

The increased time that people spent at home during the pandemic led to a greater digital engagement and encouraged consumers to turn to online channels for a wide range of purposes, including socializing, entertainment, work and study, as well as shopping. Furthermore, many non-grocery retailers worked to offset the sales lost from physical outlets by developing online sales during the crisis.

The competitive pricing and opportunities for price comparison offered by e-commerce were also important factors in the channel’s growing popularity, especially as measures introduced to limit the spread of COVID-19 had serious economic consequences, including job losses and salary cuts, which made local consumers more price-conscious. Retailers targeted consumer price-consciousness with promotional activity and campaigns, such as offering free delivery without a minimum order, while discount campaigns by leading marketplaces like Lazada and Shopee also supported growth.

Since the onset of the pandemic, Thai consumers have become much more willing to shop for groceries online in order to avoid crowded spaces and limit their risk of contagion. According to Happy Fresh, the number of local consumers using its website rose by around half during the lockdown in July-August 2021. Consumers’ familiarity with food and drink e-commerce was further strengthened by the closure of consumer foodservice outlets, which encouraged them to order food online for home delivery. Convenience stores players with numerous outlets across the country also participated in online services, such as 7-Eleven offering delivery of its products to nearby customers through its mobile app.

According to our analysis, which includes data from sources such as Euromonitor, Similarweb, eCommerce DB, and reports from public companies and trade associations, it appears that Lazada has maintained its position as the top e-commerce platform in Thailand. However, we have noted a decline in market share for Lazada, while competitor Shopee has seen an increase and now holds roughly half of the market share held by Lazada.

It is uncertain which platforms will dominate the e-commerce market in Thailand in the future, but it is likely that a mix of both foreign and local platforms, retailers, and cross-border e-commerce will play a role in shaping the market. Online shoppers in Thailand are increasingly utilizing these options.

Retail & E-Commerce Trends in Thailand

The Diversification of Vending Machine: The vending channel is expected to see significant diversification of the product offer to include more items such as insurance products. During the COVID-19 crisis, vending machines did not only sell food and drink products, with Forth Smart Service launching new insurance products in its vending machines, allowing consumers who did not want to have face-to-face contact with a salesperson to buy products directly from machines near their homes. Products like facemasks and mobile phone chargers are also increasingly sold through vending machines.

The Cashback Model: Cashback service websites allow customers to claim cashback when they make purchases from other online stores through the cashback website. These cashback companies also provide discount coupons and voucher codes for online shopping. Shopback, a Singaporean-headed e-commerce player that started operations in Thailand in 2017, is one of the leading cashback companies in the country. However, cashback services still have plenty of room for growth and will need to invest more in marketing campaigns and advertisements in order to boost awareness. The further growth of e-commerce is key to the development of these cashback services, as the competition in cashback services will likely become more intense in the forecast period. The leading companies will be judged by the performance of their marketing strategies and how effectively they attract consumer attention, including the percentage of cashback they can negotiate from each online shopping store and the retailers that have signed up to their services.

 

Financial Environment

Source: World Bank, Payment Providers, eMarketer

In Thailand, There are about 9.8% of people use credit cards, and 59.8% of people use debit cards. While there are 16.8% of people purchase on the internet, there is only 17.4% of people with online banking accounts.

% of People With Financial Accounts
Unit: %
% of People with Credit Cards
Unit: %
% of People with Debit Cards
Unit: %
% of People Exchange Through Digital Channels
Unit: %
% of People Buy Through Online Channels
Unit: %
% of People with Internet Banking Accounts
Unit: %
% of People Pay Utility Bill Online
Unit: %
E-Commerce Sales as a % of Total Retail
Unit: %

Weekly Use of E-Commerce

Source: Statista Digital Market Outlook

E-Commerce Driving Factors

Source: GWI.com (Q3, 2021)

For E-Commerce Customers in ThailandWhat are the major driving factors to purchasing online?

% of respondents think is their main drivers
Source: Multi-select survey

Consumer Goods E-Commerce in Thailand

Source: GWI.com (Q3, 2021)

There is 36.60 million consumer goods e-commerce users in Thailand, and they spend total of around 18.97 billion USD dollars in 2021. That makes a per capita spending on consumer goods e-commerce of around  518 USD. Also, in those e-commerce users, about 65.1% of them purchase through their mobile phone.

Market Size of Consumer Goods E-Commerce
Unit: Million USD

Digital Media E-Commerce in Thailand

Source: Digital Market Outlook 2021
Market Size of Digital Media E-Commerce
Unit: Million USD
Reference
  • Retail Sales & E-Commerce Penetration: eMarketer, Edge By Ascential, Euromonitor Retail Passport
  • Currency: Based on IMF Data 2022/12
  • Consumer Behavior: Statista Digital Market Outlook
  • Retail Channels: Euromonitor, Local Association, Financial Reports (Of Relevant Retailers)
  • Data Compilation: OOSGA.org
  • Analysis: OOSGA CR Team Analytics
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Author: CR Team

Our consumer research practice tracks what customers spend and how they make decisions across major economies in the world.

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