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In 2014, when Chinese e-commerce giant Alibaba made headlines for listing the largest global IPO in history (USD25 billion), many had come to recognize that the industry, which was typically dominated by Silicon Valley heavyweights, was gravitating drastically eastward.
In Thailand, with the ASEAN region consolidating into a single market in 2016, thereby giving Thailand's vast manufacturing sector unprecedented access to 600 million consumers, the demand for innovative marketing solutions has seldom been greater. These factors, combined with rapid modernization in the country's telecom sector have given birth to this new digital era of commerce—a trend which is on the rise like no other.
In 2013—a year before Alibaba's global launch—Thailand's total e-commerce market was valued at USD21.8 billion. Only 12 months later the industry had grown by a whopping 164% to USD58 billion—followed by a further 3.16% rise in 2015, where e-commerce accounted for USD60 billion of total sales across the country. Broken down, the majority of these sales, or USD35 billion, accounts for B2B transactions, while the remaining USD25 billion represents direct consumer purchases. However, with Thailand's overall exports struggling to return to their strong growth trajectory for a third consecutive year, the B2B segment of the e-commerce sector in fact dipped by a slight 0.34% in 2015. Rather, local and regional start-ups—prompted by favorable market conditions and a growing tech-savvy workforce—have been left to fly the flag for the industry, resulting in a 15% increase in B2C sales in 2015.
The government, for its part, has been quick to react to this trend by recognizing its crucial role in stimulating both domestic production and export levels. Speaking in an exclusive interview to TBY, Thailand's Minister of Commerce, Apiradi Tantraporn, admitted that “e-commerce will be a major element of our export growth. We are encouraging businesses and entrepreneurs to make use of e-commerce... We have a department that is nurturing this growth, which we call the Incubator, a program to train and develop e-commerce enterprises, and, when they are stronger, to partner them with bigger businesses."
One lead example that companies in the incubator will hope to follow is the pan-ASEAN Lazada. Established in 2011, the Singapore-based online trader had jumped to USD1.3 billion in sales across the region by 2015, with Thailand accounting for USD280 million. Occupying a dominant market share in the local e-commerce market, Lazada Thailand revealed that as much as 30% of all transactions originated from Bangkok alone, while the best-selling categories are health, home and living, and beauty.
According to a recent study by the Electronic Transactions Development Agency, Thailand's e-commerce market is forecasted to grow by a staggering 30-40% in 2016. Above all, this success has been attributed to the widespread access of 4G broadband services throughout the country. For example, over 65% of all Lazada Thailand transactions so far in 2016 were placed from a mobile phone, compared to 1% in 2012.
With the number of 4G subscribers expected to double this year, Thailand's online traders are on the brink of redefining the way society understands commerce. More importantly, however, their surge is sending shockwaves throughout the economy as manufacturers, retailers, and logistics providers alike begin to grapple with this unstoppable opportunity.
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TABLE OF CONTENTS
Review: Diplomacy
The Times are Changing
The West may have taken a dim view on the 2014 coup, but China has been less judgmental about Thailand's domestic policy and the two countries have grown closer over the past couple of years.The West may have taken a dim view on the 2014 coup, but China has been less judgmental about Thailand's domestic policy and the two countries have grown closer over the past couple of years.
read articleGuest Speaker
HE Maithripala Sirisena, President, Democratic Socialist Republic of Sri Lanka
TBY talks to HE Maithripala Sirisena, President of the Democratic Socialist Republic of Sri Lanka, on celebrating 60 years of relations with Thailand, boosting bilateral trade, and potential opportunities with the AEC.
read articleFocus: Special Economic Zones
Zone Home
With numerous upcoming major trade deals like the TPP and CAFTA, in addition to Thailand joining the ASEAN Economic Community, the country is developing a host of strategically located and incentivized SEZs to take advantage of the upcoming opportunities.
read articleFocus: Auto Sector
Driving Force
A combination of slower global economic growth and weaker domestic purchasing power suggests that Thailand's renowned automotive sector is heading for flat growth in 2016, thereby encouraging the government to promote cutting-edge innovation across the industry.
read articleFocus: Gems & Precious Stones
Shine Bright
As a key driver of the economy, Thailand's vast manufacturing sector comes in different shapes and sizes—and colors, for that matter. One segment to have really emerged as a sparkling export opportunity over the past two decades has been the country's gems and precious stones industry.
read articleInterview
Dr. Pichet Durongkaveroj, Minister, Science and Technology
TBY talks to Dr. Pichet Durongkaveroj, Minister of Science and Technology, on the initiatives to boost innovation in the country, facilitating greater private investment, and fostering mutually beneficial partnerships with countries.
read articleFocus: E-Commerce
Down the Wire
In 2014, when Chinese e-commerce giant Alibaba made headlines for listing the largest global IPO in history (USD25 billion), many had come to recognize that the industry, which was typically dominated by Silicon Valley heavyweights, was gravitating drastically eastward.
read articleInterview
Anantachai Kunanantakul, Chairman & CEO, Siam Eastern Industrial Park (SEP)
TBY talks to Anantachai Kunanantakul, Chairman & CEO of Siam Eastern Industrial Park (SEP), on the development of the park, the benefits on offer, and plans to further develop the country's eastern seaboard.
read articleInterview
Kan Trakulhoon, Head of Working Group , Eastern Economic Corridor (EEC)
TBY talks to Kan Trakulhoon, Head of Working Group of the Eastern Economic Corridor (EEC), on the background of the EEC project, the government's push to build up infrastructure in the country, and his projections for the coming year.
read articleFocus: Water Shortage
A Drop At a Time
In 2016, many Thai's across the Kingdom will be looking out for weather forecasts—rather than economic ones—as the key indicator for the country's economic sustainability. Water is becoming an increasingly precious global commodity as populations and temperatures increase.
read articleReview: Education
Many Brains to Gain
Thailand has long suffered from an ineffective education system, with a large number of dropouts and graduates not equipped to deal with the demands of the 21st century. However, the government has been taking actions in a bid to get serious about much-needed education reform.
read articleInterview
Weerasak Kowsura, Board Chairman, Thailand Convention & Exhibition Bureau (TCEB)
TBY talks to Weerasak Kowsura, Board Chairman of the Thailand Convention & Exhibition Bureau (TCEB) & Board Chairman of Designated Areas for Sustainable Tourism Administration (DASTA), on the country's booming MICE industry and the benefits of community-based tourism.
read articleInterview
Proudputh Liptapanlop , Executive Director, Proud Real Estate
TBY talks to Proudputh Liptapanlop and Pasu Liptapanlop, Executive Directors of Proud Real Estate, on the company's development plans for Hua Hin, the prospects of the industry, and their expectations for the future.
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