Thailand is a prospering Southeast Asian country with a developing economy. Although it is relatively modern compared to other regional countries, its ecommerce industry is only beginning to grow. However, the previous years have seen tremendous growth in Thailand's ecommerce scene.
Thai e-retailers have been doing well, especially as people switch to digital payment methods. Therefore, it is essential first to understand the growth of digital marketing in Thailand.
Let's discuss the current ecommerce market and payment trends that are prevalent in Thailand.
Growth Of eCommerce
Digital marketing has grown considerably in Thailand, as interest in social media and online buying grew among the population. As a result, there was a 7% rise in internet users in the last year. In addition, the pandemic further pushed people to use the Internet.
With over 48 million people using the Internet, digital marketing's impact has increased many folds. In addition, there is a national drive to create a cashless society. Consequently, retailers are now switching to digital stores, especially for most lifestyle products.
Digital payment is becoming increasingly popular, too, with even street carts offering to pay virtually. In addition, using a QR code for making payments at brick and mortar stores is becoming a norm rather than an exception.
The Thai government is also empowering digital payments. For example, they have launched the "Paotang" application, an e-payment system that people can easily use in the country. Therefore, Thai consumers are encouraged to use digital methods and reduce their use of cash.
Thai people are using mobile applications and social media websites to learn more about new products. These online trends make digital marketing and awareness campaigns quite significant. In addition, some top online shopping industries include food, electronics, personal care, and travel packages.
Online shopping has considerably grown to reach eleven billion dollars in 2020. A key ecommerce trend is that Thai people love to shop online on different holidays. As a result, online stores also receive excellent revenues at the year's end.
B2B ecommerce is snowballing in Thailand. Digital transformation has caused business owners to use online mediums to find suppliers and product partners. As a result, business-to-business ecommerce practices are becoming a norm in Chonburi, Nonthaburi, and Bangkok.
Thai businesses find that they can access the international markets and perform better in a competitive environment. Hence, they use modern payment methods and set up online stores on platforms like Amazon and AliExpress. In addition, it allows these B2B businesses to cater to a broader audience and increase their output in the local ecommerce industry.
Ecommerce Market Trends
Thailand has a thriving online industry. We have already explained that Thai people love shopping online for Christmas and other holidays. However, ecommerce still constitutes less than one percent of retail shopping in Thailand. As a result, there is plenty of room for companies to grow and make their mark in the country.
Thailand is a nation where people prefer to use mobile phones for communication. As a result, Thailand has enjoyed continuous growth in the ecommerce sector. The development also provides some interesting insights.
- Shopping peaks in Thailand in the midweek. People buy most things online on Wednesdays, while the sales numbers are low on the weekends.
- People usually relax on the weekends and avoid buying expensive items. In addition, they prefer to spend this time with family and enjoy leisure activities. On the other hand, Thai people like to spend money on expensive items. Therefore, online buying often includes expensive tickets and branded items.
- Consumer electronics is also quite popular in terms of digital sales. People love these purchases in the holiday season, where Thai citizens aim to revamp their homes. In addition, Thailand receives many international visitors. Hence, you will find all seasonal celebrations here, with online buying peaking during these times.
Social Media Websites
Social media websites have become a primary method for the ecommerce industry in Thailand. Facebook is the leading ecommerce platform in this regard. As a result, it provides the best place for online stores with over forty-eight million users.
Other top social media sites include Instagram, Twitter, and Line. In addition, they also have millions of users that take an interest in online shopping. With over half of the top online consumers using these social media websites, the future is bright for ecommerce through this medium.
Thailand's rural areas have seen considerable growth in Internet access. This has evolved the ecommerce industry. The country's Internet penetration was around 50%, leaving a lot of room for development.
However, the country has enjoyed considerable Internet access improvement with the government's Thailand 4.0 policy. As a result, it has attracted many international ecommerce brands to enter the Thai market. Therefore, we see an increase in ecommerce spending.
Alibaba entered into a strategic partnership with the Thai government. As a result, they developed many ecommerce capabilities of Thailand by helping them through government facilities and payment infrastructures. They also brought domestic merchants on the famous Chinese platform to empower their selling and performing online.
International sellers still make up around half of the ecommerce spending in Thailand. It shows two results. First, Thai consumers take more interest in international brands and services. Second, there is plenty of scope for local shops to grow online.
The top cross-border locations are the United States, China, and Japan. However, domestic merchants also appear to give the international firms more competition. Currently, the top two international online merchants in the country are Lazada and Shopee.
Domestic Service Providers
The ecommerce infrastructure in the country is developing quite quickly. Local merchants are forming partnerships to ensure that consumers can use digital payment methods. Therefore, the arrival of FedEx, TNT, and UPS has shown considerable promise toward this end. These companies work with local providers and help them with logistics and transportation solutions.
International Service Providers
Service providers in Thailand are helping local and international brands with improved ecommerce revenues. When companies like DHL provide excellent delivery services, ecommerce brands can enjoy incredible returns. For instance, DHL helped Adidas increase its sales in Thailand through improved delivery services for online sales.
Payment Methods in Thai Ecommerce
Different payment methods are employed in the Thai ecommerce industry. However, Thailand is a mobile-friendly country where people use smartphones much more than desktop computers. Hence, most people prefer payment methods that are easier to implement on mobile phones.
The mobile ecommerce market leads the Thai online industry as more than 50% of sales occur on phones. Still, the mobile phone digital market is expected to grow further to generate $25 billion in sales in 2021. In addition, many mobile phone users shop at least twice a month.
It means they depend on mobile phones for online transactions. Hence, merchants ensure that they can cater to these clients. As a result, most of these consumers complete their buying on a mobile device using various methods.
We will review bank cards, pay applications, and digital wallets as the current methods in the Thai ecommerce industry.
Credit And Debit Cards
Bank cards are the dominant ecommerce payment method in Thailand. Around 30% of online transactions occur using this medium.
The Thai government has taken many measures to support the use of bank cards. Five hundred fifty thousand terminals have been placed around the country to help people pay online using card payments. The government wants citizens to use these services and has incentivized card payments through tax rebates.
PromptPay is a customized Thai solution to help users perform online transactions. This method only uses a registered phone number or government-issued ID to transfer funds from online shoppers to digital businesses. Hence, the system is already quite successful, with fourteen million users in the country.
International Payment Systems
PayPal is available in Thailand now. It ensures that the ecommerce payments can be globally processed while still retaining the ability to receive local currency payments. Therefore, domestic ecommerce stores can have the best of both worlds.
Local service providers are also available in the market. For instance, they include options like Thaiepay. In addition, they offer support for all types of bank cards against a transaction fee. Online shoppers can also keep track of their payments and receive fund transfers directly into their Thai bank accounts.
Smartphone penetration in Thailand has now necessitated the growth and adoption of digital wallets. They are already used in around 23% of online transactions. Typically, top international service providers like AirPay and PayPal are offering this service.
Thailand has a flourishing ecommerce industry, with people preferring smartphones over other online avenues. Hence, we will see further growth in this industry, especially with digital wallets like PayPal available in Thailand.
Currently, standard payment methods include cash payments, bank cards, online transfers, and digital wallets. However, we see a bright future for digital methods since the Thai government offers tax rebates on online payments to promote the ecommerce industry.
Considering this, Zappi is offering several payment options, so eCommerce sellers on the platform can appease their diverse consumers. Sellers can adjust their settings to allow for payments through Debit and Credit cards, WeChat Pay, Mobile banking, Promptpay, Bill payments, Rabbit LINE Pay, and TrueMoney Wallet.
Also, since manual confirmation isn't required, buyers can immediately confirm their order, which will also reduce the chances of cancellation. These payment options create the perfect recipe for an ecommerce seller's success.