As of 2020, Thailand is the 26th largest eCommerce market, with a market share of $8 billion. From this $8 billion revenue, the industry’s most significant contributor is the food and beverage industry.
The food and beverage industry involves the online sales of fresh and packaged foods, frozen foods, delicacies, and beverages. If you are thinking about testing the waters in this market, you would most likely be selling fruits, vegetables, pasta, snacks, candies, confectioneries, refrigerated products, and frozen fruits.
You can also sell soft drinks, juices, and water bottles. Additionally, if you create your store on a platform like Zaapi, you would also circumvent the retail restrictions on selling alcoholic drinks that are restricted on some media.
With the numbers on your side, it is safe to say investing in an eCommerce store in the food and beverages sector is a smart move. However, if you are not careful, you can end up losing a great deal of money.
This guide will explore the food and beverage eCommerce market in Thailand and how you can make the most of this business opportunity.
Food and Beverage Market in Thailand
It’s not an unknown fact that the food and beverage eCommerce business in Thailand is growing. In fact, research shows that food purchases contribute to approximately two-thirds of all consumption in the country.
Let’s break down the factors you need to consider while selling the various types of foods and beverages in Thailand.
In Thailand, the most in-demand market for food is poultry. According to stats from 2018, more than 1.1 tons of meat was consumed in Thailand every year, and the market grew at a pace of 2.4% throughout 2013-18. Essentially, the demand for fresh meat is only expected to grow with a rise in income.
If you are planning to sell meat, take the time to learn about the local market. In Thailand’s online retail commerce, consumers’ expectations regarding the quality of the meat are becoming more stringent. In addition to the price, customers also care about the meat production and origin processes. There is also a high demand for chicken and poultry, whereas there is little to no demand for mutton.
In the dairy sector, milk is the most consumed product in Thailand’s market. Research on the food and drink eCommerce in Thailand suggests that dairy is a rapidly growing market with growth rates accounting for 9% per year for some products.
As of 2020, there has also been an increasing structural shortage of dairy products, which leaves room for new suppliers to take advantage of the opportunity. However, the market in Thailand is quite competitive, but there is no single supplier that provides a complete range of dairy products.
Currently, Thailand’s market for butter and cheese is quite limited. Although the younger demographic is increasing consumption for numerous dairy products, including cheese.
As of now, vendors from New Zealand and Australia are the leading providers of imported cheese and dairy products. This is because they are filling the gap in Thailand’s market left by local manufacturers and suppliers.
Fresh Fruits and Vegetables
Fresh fruits and vegetables are a growing sector in Thailand. The country’s climate is perfect for growing a rich profusion of fruits, including bananas, mangoes, oranges, apples, and pineapples, all of which are quite popular among consumers. Similarly, Thailand’s fruit market also thrives in the sales of lemons, limes, and grapes.
Although the consumption of vegetables in Thailand is slightly lesser than the consumption of fruits, the market is growing at a rapid pace. Research shows that vegetable sales are expected to reach a total volume of 3.9 Million tons by 2024.
Additionally, onions, tomatoes, broccoli, and cauliflowers are the most in-demand vegetables in Thailand.
If you plan to sell fresh fruits and vegetables in your eCommerce store, you can easily source the products from local vendors. However, the products are locally grown and readily available, so you would have to face a significant amount of competition.
Wine and Beer
The wine market has grown in Thailand over the last five years. Wine consumptions and production in local regions could be the reason for increasing sales. Red wine, in particular, is most popular among the Thai demographic, as it holds 80% of the market’s share. White wine makes up 14% of the market, whereas Rosé and sparkling wine have a lower consumption rate.
Beer is also one of the most in-demand products in Thailand’s beverage market. In fact, Thailand is known for its enormous beer consumption rate, the highest in the Southeast Asian region, with customers purchasing an average of 27 liters of beer per year.
It is important to note that Thai consumers are incredibly particular about beer brands. A majority of them don’t mind spending on beer from the EU despite the high prices. But local production isn’t all that bad either, and the beer market is dominated by Boon Rawd and Thai Beverage, Thailand’s leading breweries.
If you are planning to sell wine, beer, or other alcoholic drinks, make sure to learn about the local restrictions on advertising and marketing.
Chocolate and Confectionary
Chocolate and confectionary is also a profitable market in Thailand. There are several highly sought-after local manufacturers of all things sweet, and imported chocolates also have their own niche.
The demand for all kinds of chocolates is expected to increase in the upcoming years.
Countlines, chocolate pouches and bags, tablets, and boxed assortments are the most preferred categories among the local demographic. However, if you plan to add chocolates to your eCommerce store, it is crucial to consider buyer behavior. For example, Thailand has price-conscious customers who prefer economically viable local products over imported chocolates.
Moreover, you can also take advantage of the health trends in the market. For instance, selling sugar-free chocolates or medicated chocolates can give you a competitive advantage.
Thailand’s hot climate makes ice cream an in-demand product. As a result, the market was valued at EUR 409m in 2018. The sales of ice cream in the region are expected to grow, as more customers are interested in trying out different flavors.
However, the problem with selling ice cream products on eCommerce stores is that you need to provide swift delivery. Unfortunately, in the mountainous regions of the country, this may not always be a possibility. However, if your store can arrange a portable refrigeration unit, selling ice cream online can be a good idea, one that’s highly profitable.
Although the market for pasta in Thailand is relatively smaller, though it has a promising future and seems to be growing with time. This is because local dishes only use rice or noodles. But the popularity of cooking shows and social media channels has encouraged Thai customers to experiment with European cuisine bringing pasta to the mainstream.
Pasta is easily available in urban areas, whereas rural regions have limited access to this commodity. This means there is a gap in the local market for selling different types of pasta products in Thailand’s rural and urban communities.
Baked goods are a local favorite in Thailand. The market is mainly dominated by local bakers, who create goods that are Thai-centric. Bread is the most in-demand product with a market value of EUR 320 million.
If you plan to sell baked goods on your eCommerce platforms in Thailand, you can partner with local bakers. This way, you can accommodate customer demands in terms of flavor and price.
Factors to Consider Before Creating a Food and Beverage Ecommerce Store
Unlike non-perishables, selling food and beverage products online is relatively more complicated. You have to consider the local regulations, develop plans to provide quick deliveries, and make sure to source, sell, and deliver products before they expire.
Here are a few things you need to consider:
Create a Store with Zaapi
An attractive store can increase your sales. With Zaapi, you can create an aesthetic, functional, and operational store in a matter of minutes. You can use the platform to fill out your details, add products, and feature product images. For example, a food and beverage store should always add captivating pictures, since visual content can increase conversion rates by 25%.
Once your store is set up, you can market it on social media platforms. With Zaapi, your store can be easily connected to WhatsApp, Line, Facebook, and Instagram. This way, you can inform your customers about the latest deals, products, bundles, and promotions.
Study the Market
Ensure the profitability of your online store by first conducting market research to see if the products you plan to sell appeal to your target customers. Take the time to study the market, the audience, and the competition. Think about how your store can be different from others. You must also learn about the legal requirements and restrictions, such as those with selling alcoholic beverages.
Keep the Shelf Life in Mind
Whenever you are working with perishable products, it is crucial to consider the shelf life of most of the products. If your store sells items that quickly expire, such as fruits and vegetables, you must keep a tight inventory. This can limit the financial loss in case the product expires.
Plan Out the Delivery Operations
Thailand is a mountainous region. Its topography makes it hard for most online food and beverage stores to make timely deliveries. Considering this, you can stay ahead of the competition by creating a plan to provide faster deliveries.
Thailand’s market is experiencing a boost in the food and beverage industry. If you are ready to cash in on this, create your online store with Zaapi and fill your store with the most in-demand products. Before opening up your store, study the target market, come up with a sourcing plan, production plan, and delivery plan, and brace yourself for a hefty profit.