AMAZING THAILAND: FULL OF EASTERN PROMISEAn emerging market for

Asian ecommerce

Thailand - Background

The Kingdom of Thailand is situated in the middle of the

Indochinese peninsula at the geographical epicentre of

the South-east Asian ecommerce revolution.

 

Until his death in 2016 King Bhumibol Adulyadej was the

world’s longest serving head of state and his 70 years

on the throne saw fluctuating fortunes in the country’s

economy.

The late 80s and early 90s it was among the world’s

fastest growing economies. An Asian financial crisis

followed, then recovery and then the tumultuous events

of the military coup in 2014 had a negative impact. But

the overall upward curve has been remarkable over

the last few decades and it made the transition to an

upper-middle income economy in 2011 (World Bank.) 

2

Demography

With a population of 67 million, Thailand is the second

largest economy in South East Asia after Indonesia

with a GDP of US$397.475 billion as of 2015.1 It has an

internet penetration rate over 40%, approaching 30

million users, and fits the model of Asian countries

undergoing a digital revolution allied to increase in

middle class wealth.

 

Thailand’s online retail market is one of the largest in

South East Asia, valued at anywhere between USD1

and 3 billion depending on which source you use. 2 The

potential growth rate is expected to see that pushed

into tens of billions by the end of the decade.

brands available.

1 National Economic and Social Development Board

2 Euromonitor

3

internet penetration rate over 40%

The Land of the Free

Thailand’s name in the Thai language is Prathet Thai,

which means “Land of the Free.” It is the only country

in South-east Asia that was never colonised by a

European nation. 

Timeline of a revolution – three years that changed a

country

2013

• 3G infrastructure completed: Instigates a social

media revolution with 10 million subscribers on

Facebook in just 11 months. 4

• Smartphones sold 2.8 million units within four months

due to average smartphones prices dropping about

THB 3,000 ($97). Comparing daily mobile internet

usage with China at 93%, Thailand follows second at

83% rate. 5 6

• Industries adopt to social media to extend their

market. Brick and mortar chains has also developed

into internet retailing. Tesco Lotus offers delivery to

customers in Bangkok and in partnership with Lazada

Thailand

• Due to rising popularity of online shopping sites,

banks encouraged their 35 million cardholders to use

debit cards in making online purchases.

4 GSMA intelligence

5 Gfk’s survey

6 E27 Data: Smartphones in Thailand

4

2014

• Smartphone subscribers grow 25% at the start of 2014’s

first quarter 7

• Price of 3G drops to 15% about 299 per baht monthly ($10) 8

• 10% of the population are middle class earners willing to

spend on western brands. Luxury brand such as Kiehl’s sold

less volume but large profit margins were gained, indicating

that luxury items and online shopping are highly compatible. 9

• Thailand’s 2014 Ecommerce value was at 2.03 trillion baht. 10

• 4G enters the market at the last quarter of 2014.

According to a 2014 Acommerce report, mobile commerce is

a cost-effective and efficient sales channel but transactions

are still often made online. Out of 89% mobile visits, 42% of

purchases were still made via desktops, a statistic attributed

to that fact that customers feel secure entering their card

details on desktop than paying on mobile.

7 Infographic: 2014 Mobile Subscribers

8 NBTC report (National Broadcasting Telecommunications Commission)

9 Santandertrade Survey

10 Electronic Transactions Development Agency (ETDA)

2015

Bain & Company study found that 150 million people in

Southeast Asia are digital consumers, 23 million of whom are in

Thailand. 11

Thailand’s overall online retail sales are about 3.8% compared

to Singapore with 5.5% and China’s the highest at 14%. 11

11 Bain & Company

5

Present and Correct

Mobile penetration has driven the use of the internet

in general and ecommerce, whether the final purchase

is made on a mobile device or desktop. Social media is

a huge driver in the purchasing journey, with Facebook

the most popular social media for Thais to research

a product, customer reviews and share their online

shopping experience after purchase. 12

 

Thais also love to shop for foreign brands. L’Oreal and

Estee Lauder are just two of the popular cosmetic

brands. 56% of Thais are willing to buy products

offshore for better prices than 46% who would like to

purchase local products. 12 13

 

Urban consumers have a higher purchasing power than

the outer cities and provinces. A high volume of mobile

shopping comes from Bangkok while for non-urban

dwellers such as Chiang Mai and Nonthaburi, 20% are

actively shopping online. Fashion, electronic gadgets,

beauty products and air tickets are the top purchases

online in that order. 14

12 PWC Survey

13 Press Release from PWC

14 Infographic: Campaign Asia

6

Paying the Price

Typically for emerging Asian markets the payments

infrastructure is fractured as new technologies vie

for market share but also against the traditional and

trusted methods of payment. Cash on Delivery is still

one of the most trusted methods of payment, but

attitudes and cultures are changing. 15

 

The new market has led to a lot of different payment

solutions. LINE launched Line Pay (see boxout),

Facebook has trialled its own payment option, while

Alibaba’s AliPay has also extending into Thailand. These

fight against more traditional methods, including debit

card payments. 16

The government has also introduced its own epayment

system called PromptPay in an attempt to stimulate

digital payments and offer a digital wallet solution for

the masses. 17 18

 

Many Thais are still conventional when it comes to

payments and would opt to choose cash on delivery

instead. For young demographics slowly accepting

online payment, they see it as the most convenient way

for online transactions but still 80% are using bank

transfer as their mode of payment online or debit as

their second option. 19

15 Oxford Business Report

16 Ecommerce IQ Asia

17 Thailand’s Ministry of Finance

18 The Nation

19 Bostonfed Case Study

7

The Final Mile

Fulfilment for ecommerce Merchants wanting to do

business in Thailand is getting easier. As markets

open up, more and more business look to take up the

demand, as indicated by DHL’s early 2016 announcement

of a domestic delivery service in the country. More and

more third-party services offer fulfilment and storage

solutions so do your research carefully.

8

Drawing a Line

In addition to the traditional social media behemoths

popular around the world, LINE is a major player in the

Thai market. With 33 million users it is second only to

Facebook (41 million) in terms of user base. 20

The instant messaging app is of the same genre as

WhatsApp and WeChat. While it is not an ecommerce

platform, users can opt-in to receive ecommerce

updates leading to the success of Line Flash Sales,

where the company works with brands to offer

heavily discounted products. It has proved incredibly

successful – particularly in attracting business form

outside the major cities where consumers are hard to

reach.

In 2015 Thailand became the second country in the

world to introduce LINE Pay enabling mobile payments. 21

20 Campaign Asia

21 Acommerce

9

Your getaway to Thailand

PaySec offers access to the emerging ecommerce

market in Thailand by way of a secure, safe and trusted

debit card solution. As with most Asian countries, debit

card payments are actually bank transfers as the

transaction is carried out through the cardholder’s

official bank page.

We are linked with several Thai banks and therefore

facilitate the most trusted and secure method

of payment in the region with plans to offer more

solutions soon.