Thailand’s e-commerce market is poised for double-digit growth based on Amazon commissioned report on export opportunities for Thailand SMEs
Huge opportunity for Thai SMEs with B2C e-commerce exports potentially growing from THB 110.2 billion in 2021 to THB 485.8 billion by 2026, per the report commissioned by Amazon
Study finds 90% of Thailand SMEs believe e-commerce critical to global expansion, with greater sales potential expected overseas than domestically
THAILAND – 16 November, 2021– The annual value of business-to-consumer (B2C) e-commerce exports from Thailand is estimated at THB 110.2 billion in 2021 and could reach THB 485.8 billion in 2026 if micro, small, and medium-sized enterprises (MSMEs) accelerate their pace of overseas e-commerce. MSMEs are currently estimated to contribute 31% of Thailand’s B2C e-commerce exports in 2021.
These are just some of the findings from Amazon’s commissioned report entitled ‘Local Sellers, Global Consumers: Capturing Thailand’s e-commerce export opportunity’, just released at Amazon’s Roundtable Event in the same name as the report, which surveyed over 300 MSMEs around Thailand. The report, prepared by consulting firm AlphaBeta, is a first-of-its-kind analysis of the size of Thailand’s e-commerce export potential, the perspective of local MSMEs, and includes best practices to help other sellers boost that potential.
The report was launched at a virtual roundtable jointly hosted with the Department of International Trade Promotion (DITP), Ministry of Commerce, and was attended by dozens of government agencies and associations as well as exiting and prospect sellers. DITP representatives also shared how Thai government and industry experts are working together to help local businesses unlock opportunities with cross-border e-commerce.
Jamie Brennan, Head of Amazon Global Selling team in Thailand said, “Amazon allows anyone with a great product idea to start selling online to consumers and businesses across the globe. We help small businesses do what big businesses do and the Amazon Global Selling team in Thailand strives every day to help sellers to capture the best times for opportunity, identify the current gaps in their operations and prepare themselves with the knowledge, resources, and connections to sustainably expand their business globally.”
Sizeable regional growth opportunities for e-commerce exports
According to the report, if current e-commerce adoption trends continue, the annual value of B2C e-commerce exports in Thailand is expected to grow at 15% per year to reach THB219.8 billion in 2026, up from THB110.2 billion this year. However, if MSMEs accelerate their use of e-commerce to export, this value is projected to increase more than double and reach THB 485.8 billion by 2026. If ‘B2C e-commerce’ were an export category, it would rise three position to be Thailand’s sixth largest export category in five years’ time.
Thailand MSMEs surveyed anticipate greater sales volume overseas (39%) than domestically (17%). Over 90% of those respondents agreed that e-commerce is critical for their export potential, with top motivations including the ability to reach overseas customers, access to sales and marketing tools that are available on e-commerce marketplaces, and support for logistics and payments provided by these marketplaces. 29% of surveyed Thailand MSMEs mentioned that export via e-commerce currently generates over half of their annual e-commerce sales.
Key challenges faced by local MSMEs in e-commerce exports
Amidst the opportunities for growth and global expansion through e-commerce, MSMEs surveyed in Thailand revealed that key challenges can be narrowed down to four categories – barriers in cost, regulation, information and capabilities.
High cross-border shipping costs is the key challenge faced by Thailand MSMEs surveyed, with 88% of respondents citing it as a major barrier. This compares to only 42% of MSMEs that found policy support tackling cost barriers to be effective.
While 83% of MSMEs found the high cost of setting up and using international payment gateways as a key barrier with only 41% of MSMEs surveyed finding current e-payment initiatives to be supportive today.
Finally, 81% of surveyed MSMEs said a lack of information on import regulations overseas as another key barrier to selling internationally. Only 37% felt that current policies were supportive in their efforts to export via e-commerce today.
Tackling current challenges and go global
According to the report, three areas of policy focus are suggested to support Thailand MSMEs in their efforts to export via e-commerce. These include providing e-commerce export grants and subsidies; build partnerships and incentivize adoption of internationally interoperable e-payment frameworks; organizing cross-border e-commerce training, including advice on import regulations overseas.
Since its establishment in 2019, the Amazon Global Selling team in Thailand has assisted thousands of Thai sellers to expand their international business by reaching Amazon global customers. The dedicated team provides educational support to potential Thai sellers with respect to various aspects of selling on Amazon. In Dec. 2020, Amazon Global selling launched localized Seller Central for Thai sellers, allowing Thai sellers to navigate the dashboard, set up product listings, monitor sales and manage inventory all in Thai, bringing them a more convenient and efficient selling experience.
“Banana Joe hopes to deliver its set of products to consumers in Thailand and worldwide. Therefore, we decided to bring Banana Joe and our products on Amazon stores. This step plays a crucial role in our strategy to expand and scale up. Moreover, Amazon enables us to reach customers directly, which cannot be achieved through traditional sales channels. And Fulfilment by Amazon (FBA) help us pick, pack, and ship products, plus takes care of customer service and returns. Now more than 90% of our revenue outside Thailand is generated through Amazon stores. And I am glad we made the right move. said Nat Meechubot from Banana Joe.
To download the ‘Local Sellers, Global Consumers: Capturing Thailand’s e-commerce export opportunity’ report, visit here.
For more information about Amazon Global Selling, please visit https://sell.amazon.co.th/