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Thailand’s Online shopping market share expected to triple within five years

High rates of digital banking growth and an increase in online transactions have coincided with new investment in Thailand’s e-commerce segment

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In late September Thai retailer Central Group formally launched a new e-commerce joint venture with Chinese company JD.com.

The $500m JD Central development, which opened to the public following a soft launch in mid-June, said that online orders had been 15% higher than expected by the time of the official launch, with the company looking to increase the number of items available online to 1m in the near future, up from 10,000 in September.

New investment to drive growth in Thailand’s e-commerce market

With plans to have five operational warehouses before the end of the year and an automated retail store in Bangkok next year, along with pledges to offer same-day delivery in the capital and surrounding areas, company officials have identified a prospective market of 25m people by the end of 2019.

Such a development could lead to greater competition for established e-commerce operators, led by the Lazada Group, a subsidiary of Chinese tech giant Alibaba, and Singapore multinational Shopee.

The development follows the April announcement that Alibaba, which has been active in Thailand since 2016, would invest $320m in a digital free trade hub in Thailand’s Eastern Economic Corridor, with the zone to serve as a platform to connect regional and global markets with Thai agricultural produce.

Banks adapt amid forecast rise in online shopping

The new developments in e-commerce come amid positive expectations for online shopping growth, which industry figures expect to account for 10% of Thailand’s retail trade within the next five years, up from current levels of around 3%.

The e-commerce segment is forecast to expand by 8.5% this year, according to a report issued by the Electronic Transactions Development Agency in July, with business-to-consumer market value to reach BT3.1trn ($94.1bn).

Supporting this expansion is the high level of internet penetration, recorded at 82% by the social media marketing and communications agency We Are Social, well above the South-east Asian average of 58%. Meanwhile, a survey from state-owned bank Krungthai found that some 80% of the population own a mobile phone, providing a strong platform for e-commerce growth.

Furthermore, a survey released in April by consultancy McKinsey found that digital banking penetration had expanded by 200% in the preceding two years to account for 36% of the population.

Recognising the rising demand for mobile finance solutions, Thai banks are moving to increase their digital product range.

Domestic institutions Kasikornbank and Siam Commercial Bank released updated versions of their mobile banking apps in October that include expanded payment and trading options.

The shift towards electronic financial services and e-commerce has resulted in both banks announcing plans earlier this year to close 10% of their branches, as 90% of their money transfers are now conducted via online apps.

Furthermore, Krungthai also launched its new mobile banking app in late October, part of efforts to double the number of mobile accounts it operates to 10m by next year.

 

New investment to drive growth in Thailand’s e-commerce market | Thailand 2018 | Oxford Business Group

With some of the industry’s most experienced analysts conducting on-the-ground research throughout the year, OBG provides its global readership with the business intelligence they need to stay ahead.

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Ecommerce

Thailand Ecommerce Market: Shooting For Success

At present, the Thai ecommerce market is valued at USD 3.5 billion. According to a Google Temasek study, Thailand’s e-commerce market value is expected to surge to 13 billion USD by 2025 on the back of strong global demand for Thai products.

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Thailand’s nascent e-commerce industry is thriving and making serious money. According to the Ministry of Digital Economy and Society, Thai e-Commerce grew the most in ASEAN, the value of Thai ecommerce grew 14% in 2018, estimating that the value would increase to USD 103 billion, and its growth is expected to hit 20% this year.

The region is flourishing

According to the report Asia-Pacific B2C E-Commerce Market, over one half of total global online retail sales happens in the Asia-Pacific region. Over 50% of all the online shopping for retail goods and services takes place in the Asia Pacific region, and South-East Asia accounts for about 40% of the e-commerce market of the region.

Southeast Asia is definitely a new big e-commerce hit, and the region is currently a very attractive market for big players involved globally in the e-commerce sector and smaller local companies.

At a reflection point of Internet penetration and mobile devices rapid spread, the population of Southeast Asia is quickly adapting its behaviors to take advantage of new purchasing products and services online opportunities.

According to the latest e-Conomy Southeast Asia 2018 report from Google and Singapore-based Temasek, the digital economy in Southeast Asia is on track to hit $240 billion by 2025, which is $40 billion more than previous estimates.

The digital economy in Southeast Asia is on track to hit $240 billion by 2025

As e-commerce continues to grow exponentially, Southeast Asia will account for 20% of worldwide e-commerce by as early as 2022.

Thriving Market

With a GDP worth of USD 602 billion, Thailand is the second largest economy in Southeast Asia, surpassed only by Indonesia. In addition to that, according to EcommerceIQ research, Thailand is also the second largest Business-to-Consumer (B2C) e-commerce market in the region.

At present, the Thai ecommerce market is valued at USD 3.5 billion. According to a Google Temasek study, Thailand’s e-commerce market value is expected to surge to 13 billion USD by 2025 on the back of strong global demand for Thai products.

As Ebay’s General Manager for Hong Kong, Taiwan and Southeast Asia border trade Jenny Hui has stated, Thai products are in global demand, with jewelries and watches, health and beauty products, auto parts, home and garden, and collectibles rapidly gaining popularity.

Electronics is currently the leading product category, accounting for USD 1.3 billion market share.

Fashion is second, accounting for USD 525 million. According to Statista, online shoppers in Thailand spend on average $283.95 USD online annually, and four years from now, this sum is expected to grow to $401.73 USD.

Young Mobile-First Generation of Users

What makes the country a true breeding ground for ecommerce is its great number of internet users – one of the highest in Southeast Asia. At present, Thailand has an Internet penetration rate of 57.4% with Millennials making up the majority and spending on average 53.2 hours a week online.

When comparing the number of Internet users over the past 10 years, there were only 16.1 million Internet users in 2008 and the number reached approximately 45 million in 2018; moreover, at present there are 124.8 million mobile subscribers, 44 million people using LINE messenger and 52 million Facebook users.

Internet-savvy young people here definitely play a key role in driving mobile commerce. Thailand is a regional leader in mobile commerce, as 52% of online transactions take place via mobile devices (only South Korea is higher with 58%). According to the Thailand Marketing Research Society, 71% of smartphone users in Thailand shop online an average of twice a month, while 90% intend to shop online in the future. 

On top of that, a growing middle class with increasing incomes also plays a huge role in this surge trend.

Big players bet big on it

Thailand’s market size and e-commerce potential has made it an appealing market to foreign investment. In the last two years, Chinese Internet giants like Alibaba and JD.com have invested in Thailand.

Alibaba through its USD $3.7 billion investment in Lazada in 2018, and USD $306 million injection into the first stage of the Eastern Economic Corridor (EEC), while JD.com has poured USD $457 million into a joint-venture with Thailand’s leading retail conglomerate, Central Group. E-commerce is the leading category that has received the greatest foreign investment compared to payment, logistics, fintech and food and beverage sectors.

Consequently, the increase in interest from foreign investors in Thailand’s e-commerce sector has encouraged local firms to increase their competitiveness and encouraged more SMEs in Thailand to innovate in the areas of online commerce, fintech and artificial intelligence. The investment also resulted in more joint ventures between offline wholesale companies and online companies.

Affiliate marketing opportunities

According to affiliate network Indoleads, e-commerce success brings also a bunch of great affiliate-marketing offers. About 97% of all Thailand’s ecommerce brands use affiliate marketing to attract customers. That means the opportunities for publishers are limitless, and the programs are abundant.

Lazada, Shopee and JD Central are one of the most attractive ones. The three platforms have strong financial support from larger firms. Lazada is backed by Chinese e-commerce giant Alibaba, while Shopee is supported by Tencent, another massive Chinese company. JD Central is a joint venture of China’s JD.com and Thailand’s Central Group.

These three online marketplaces in Thailand are drawing each in over 30,000,000 sessions per month, providing brands with high visibility, and give publishers a higher chance to earn commission through sales.

Not only big international players have appealing affiliate programs. A variety of local e-commerce stores widely use affiliate marketing. For example, Namu life, a leading retailer of skincare products produced with natural ingredients, is one of the most popular shops in this niche. It is not a secret that skincare products are always in high demand in Thailand, so there is always a great choice of online stores selling them.

Another one is CMART, Thailand’s most popular e-commerce website, selling almost everything from electronics to health and beauty products and providing top-notch service. CMART has developed a successful multi–channel strategy and innovative operating model.

The travel aggregators and platforms, such as Bookaway, are also extremely popular not only among locals, but also thousands of foreigners permanently living in Thailand.  

In the perspective of flourishing Thailand ecommerce market, affiliate marketing is very likely to present real and meaningful chance to reach consumers in novel, creative way to drive performance-based results. Publishers definitely should consider this option for sure.

Indoleads are happy to present you all these amazing opportunities. Indoleads is one of the leading affiliate platforms in South-East Asia. They have 500 CPS/CPL/CPA direct affiliate offers from over 60 countries around the globe. Our team is dedicated to your affiliate business success, so join Indoleads to promote Thailand brands and cut a piece of cake from their enormous revenue!

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China

Cross-border e-commerce: How Thai SMEs can win over Chinese hearts?

It is expected that by 2020, China’s CBEC import value will reach CNY 3 trillion, representing a compound average annual growth rate (CAGR) of 30%, a growth rate highest among all types of trade.

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Navigating thru China’s cross-border e-commerce: How Thai SMEs collaboration can win over Chinese hearts?

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Ecommerce

Thailand to fight counterfeit product sales online

Any buyers who want to report pirated or counterfeit products being sold online can contact the Department of Intellectual Property hotline on 1368.

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MBK fake watches

Thailand’s Department of Intellectual Property is cooperating with a famous online shopping website owner to resolve and prevent counterfeit product sales online.

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