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Thailand: Uneven recovery hinders sector’s growth
Thailand’s e-commerce is expected to post US$23 billion in gross merchandise value (GMV) this year, up 18% year-on-year, but the growth is much smaller than the previous year, weighed down by economic headwinds, according to a new survey by Facebook parent firm Meta and consultancy Bain & Company.
The country’s e-commerce is predicted to grow to $46 billion in 2027, with a compound annual growth rate (CAGR) of 14% from 2022 to 2027, based on the annual SYNC Southeast Asia report, which examines the digital economy and the future of e-commerce in the region.
“Inflation and supply chain pressures and the easing of offline restrictions are causing a slowdown in Thailand’s e-commerce in terms of GMV in 2022,” Derek Keswakaroon, partner at Bain & Company, said in an online conference.
In 2021, Thailand’s e-commerce grew 67% year-on-year to $20 billion.
The report surveyed 16,000 digital consumers and gauged opinions of more than 20 chief exponential officers (CXOs) across six Asean countries, including Thailand.
In 2027, Asean’s e-commerce is expected to post $280 billion in GMV with Indonesia leading the region with copy21 billion, followed by Thailand at $46 billion.
From 2022 to 2027, Vietnam is expected to see the biggest CAGR in the region with 28% to $40 billion.
According to the report, there are 42 million digital consumers in Thailand in 2022, an increase of 2 million from last year.
There are 370 million across the region this year, a rise of 28 million from last year, while nine out of 10 would be digital consumers by 2027.
According to the survey, consumers want an integrated shopping experience that lets them move easily between online and offline and different experiences, with Thai consumers shopping at an average of 16.4 online platforms compared to the region’s 15.3.
Thailand’s average online basket size in 2022 amounts to $43 for each online transaction, a drop from $44 last year.
The biggest growing categories for online shopping are household appliances and non-alcohol beverages, the report shows.
Prae Dumrongmongcolgul, country director of Facebook Thailand for Meta, said in terms of channel spend in Thailand, 48% are in the e-marketplaces, followed by 25% in alternative e-commerce channels, 9% in food delivery apps, 8% in large brands’ own websites, 4% in large retailers’ online shops and 6% in small online shops.
Based on the alternative e-commerce channels, live buying shares 10%, followed by business messaging app at 7%, classified at 5% and group buying at 4%.
According to Ms Prae, social media accounts for almost half of online product discovery among respondents in Thailand, consisting of image feeds at 15%, videos at 26% and related tools, such as messaging, at 9%.
Online word of mouth, influencers’ video posts and social media ads are the top three influential elements, she said.
“Brands need to engage consumers through video as social media continues to be an important channel for consumers to evaluate products. As consumers move between channels and brands build integrated channel strategies, videos on social media act as a common connecting thread across the purchase funnel,” said Ms Prae.
Source: https://www.bangkokpost.com/business/2417476/uneven-recovery-hinders-sectors-growth