Digital 2019 Spotlight: Ecommerce in Thailand
There are close to 50 million internet users in Thailand today, with a whopping 85 percent of those between the ages of 16 and 64 surveyed by GlobalWebIndex reporting that they already buy products and services online.
But despite these high levels of use, online spending remains relatively low in Thailand. The average shopper in the country spent just $100 on online consumer goods purchases in 2018 – significantly lower than the global average of US$634.
However, with consumers’ online spending growing by an impressive 25 percent last year, the future of Thailand’s ecommerce industry looks promising.
You can explore the country’s broader digital landscape in our complete Digital 2019 Thailand report below, but read on for the latest ecommerce numbers and insights.
Note: this article contains a number of updates to statistics featured in the report above. Also note that some of our data providers have recently changed their reporting methodologies, so some of the figures we reference in this article will not be directly comparable to figures published in the report embedded above, especially for internet and social media users.
Ecommerce in Thailand
Statista reports that Thailand’s online consumer economy was worth roughly US$8.3 billion in 2018, up by US$1.6 billion – or 25 percent – compared to 2017.
Online travel purchases account for half of that total value, with Thais spending US$4.14 billion on e-travel in 2018.
Almost all of the country’s ecommerce shoppers buy consumer goods online too though, with Statista’s Digital Market Outlook survey finding that 37.5 million Thais spent more than US$3.75 billion online on consumer goods in 2018.
However, consistent with trends we see across Southeast Asia as a whole, the market for digital content remains relatively small in Thailand, with the average ecommerce user spending just over US$1 per year on music downloads and streaming services combined.
Demand for video games is slightly stronger, but the overall market for digital content in Thailand is still worth less than US$400 million in sales per year.
Sales of digital music are barely growing either, with Thais only spending an additional 5 percent – or US$2 million – in 2018 compared to 2017.
It’s a very different picture across the rest of Thailand’s ecommerce industry though, with many categories seeing annual growth in excess of 25 percent.
Mirroring a trend that we saw in our Indonesia ecommerce report, the food and personal care sector is enjoying the fastest growth in online sales in Thailand, with the sector up by 30 percent in 2018 versus the year before.
Meanwhile, despite already accounting for half of the country’s total internet economy, travel was the second-fastest growing ecommerce sector in Thailand, with 2018 sales up by 28 percent compared to 2017.
Online sales of fashion and beauty products grew more slowly at 17 percent year-on-year, which may be partly due to the country’s strong tradition for fashion markets like Chatuchak weekend market and Platinum Fashion Mall.
However, with Thailand’s shoppers on track to spend more than US$1 billion on online fashion purchases in 2019, it’s not as if the sector is ‘struggling’.
Regional ecommerce platforms top in Thailand
SimilarWeb reports that the company’s local-language site attracted an average of roughly 44 million visits per month between May and July 2019, while App Annie reports that the company’s mobile app was the most-used shopping app in Thailand across the first three months of the year.
However, these rankings are based solely on website visits and app users, and may not be indicative of value market share.
Shopee takes second spot in both the website and mobile app rankings, with the platform’s dedicated Thai website attracting an average of 33 million visits a month between May and July 2019.
Electronics are also a popular choice for the country’s online shoppers, with both Samsung.com and Microsoft.com appearing in SimilarWeb’s ranking of the top transactional websites in Thailand.
However, it’s unclear what percentage of visitors go to these brand websites with the specific intention of ordering something online, versus researching products and looking for company news.
Local online marketplace Kaidee also makes SimilarWeb’s top-five transactional sites in Thailand, with the classifieds site attracting more than 10 million visits per month.
It’s interesting to note that shopping preferences appear to be quite different between websites and mobile apps, with a number of brands appearing in the mobile app list that don’t seem to enjoy the same success on the web.
As we saw above, though, the food and personal care category is the fastest-growing sector in Thailand’s internet economy, so it’s worth exploring the country’s grocery sector in more detail.
Online grocery in Thailand
Data from Statista show that Thais spent more than half a billion dollars (USD) on online food and personal care purchases in 2018.
However, that’s still less than the total amount spent in Singapore, despite Thailand’s population being more than 10 times larger than Singapore’s.
Furthermore, online grocery accounts for just 1 percent of the US$48 billion that Thais spent on grocery purchases across online and offline channels in 2018.
But the good news is that the online grocery sector is expanding rapidly in Thailand.
Shoppers spent 30 percent more on online grocery purchases in 2018 compared to the year before, putting Thailand in the five fastest-growing online grocery markets in the world.
A 2018 study from IGD Research tells an even more bullish story, with the company forecasting compound annual growth rates (CAGR) of more than 50 percent in Thailand’s online grocery sector over the coming years.
By 2022, IGD predicts that online shopping in Thailand will account for close to 2 percent of Thailand’s total retail market. To put that in perspective, eMarketer predicts that online purchases will account for just over 3 percent of the US grocery market in the same year.
Insights from the offline world suggest that there’s plenty more room for growth in Thailand’s online grocery sector too, with Thais embracing ‘modern’ grocery retail formats more quickly than many of their Southeast-Asian neighbours.
Euromonitor and DBS Bank project that Thailand will have the largest ‘modern trade’ grocery market in Southeast Asia by 2021, with the country’s overall grocery spend second only to Indonesia amongst the region’s largest economies.
These compelling figures suggest that Thailand represents both a near-term and longer-term opportunity for online grocery players.
But who’s winning today?
Online grocery in Thailand: key players
Our analysis suggests that both Lazada and Shopee account for a meaningful share of consumers’ online food and personal care purchases in Thailand, although it’s tricky to isolate either company’s grocery-specific performance.
Delivery services like Honestbee and HappyFresh have also enjoyed success in Thailand over recent years, although Honestbee’s apparent strong performance hasn’t been enough to stem its ongoing challenges.
Other players seem to see future potential in the delivery model too. Recent reports suggest that LINE – one of the most popular social media platforms in Thailand – will introduce a grocery delivery service in Thailand as part of a number of new shopping-related services it plans to launch in the country before the end of 2019.
However, traditional grocery brands appear to be taking longer to achieve online success in Thailand, and none of the country’s supermarket chains yet make it to SimilarWeb’s ranking of the country’s most-visited ‘transactional’ websites.
But that may be about to change. Tesco Lotus, one of Thailand’s largest ‘traditional’ supermarket brands, launched a new online shopping site in partnership with Shopee last month, marking an important evolution in the company’s ecommerce efforts.
Analysts report that there’s plenty going on behind the scenes at other traditional grocery players too, with IGD Asia’s Shirley Zhu noting:
“Thailand [will] see rapid growth in online grocery sales as key players such as Central Group, JD.com, Tesco Lotus, and Villa Market build better infrastructure and more seamless apps for shoppers.”
This focus on apps is particularly relevant in Thailand, where internet users are more than twice as likely to make purchases using a mobile phone than using a computer.
As we noted in a previous article in this series, local tastes and cultures are a key influence in the online grocery sector across Southeast Asia, and this is apparent in the ways that ecommerce companies have adapted their websites and offerings specifically for the Thai market.
However, our analysis suggests that companies that go one step further and create dedicated shopping apps that cater to local needs and behaviours are even better positioned to take advantage of Thailand’s rapidly expanding ecommerce market.
Ecommerce outlook: Thailand
Thailand faces fewer of the geographic challenges faced by Indonesia and the Philippines, although population dispersion is still an important consideration, with slightly more than half of the country’s inhabitants living in rural areas.
However, Thailand’s digital infrastructure is already well established. Almost 70 percent of the country’s total population already uses the internet, and – as we reported in our Digital 2019 Global Digital Overview report – Thais are amongst the heaviest internet users in the world.
Overall, the future of ecommerce in Thailand looks very healthy. It’s clear from the data that Thais have already embraced online shopping, so it should only be a matter of time before this translates into greater value.
If you’d like to compare Thailand’s ecommerce growth to other countries around Southeast Asia, check out our full collection of articles in this series.
Looking for more data on Thailand? Check out all of our previous country reports by clicking here.