AMAZING THAILAND: FULL OF EASTERN PROMISE THAILAND: FULL OF EASTERN PROMISE ... The Kingdom of...
Transcript of AMAZING THAILAND: FULL OF EASTERN PROMISE THAILAND: FULL OF EASTERN PROMISE ... The Kingdom of...
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
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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
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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
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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
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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.
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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
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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.