Thailand
Thailand: Direct sales to see new entrants in 2018
Thailand’s 95-billion-baht direct sales market is expected to intensify next year as the proliferating digital platform has dismantled entry barriers and opened the market to more competitors.
The booming online business and the growing digital wave in Thailand have made it easier for new companies to enter the direct sales market this year, said Suchada Theeravachirakul, president of the Thai Direct Selling Association (TDSA).
“With online marketing channels, some companies can grow their direct sales business by 200-300% this year,” she said. “Digital marketing helps the direct sale companies reach customers faster than traditional direct sale’s methods.”
Mrs Suchada said digital marketing will also draw more foreign direct sales companies to enter the Thai market next year.
Normally, at least 100 new direct sales companies register with the Commerce Ministry’s Business Development Department each year.
Mrs Suchada projects the direct sales segment will grow by 2% this year to 95 billion baht, driven by health and food supplements.
Health and food supplements sales are expected to contribute over 30% of the TDSA’s total direct sales value due to growing health consciousness among consumers this year, up from only 10% in the past decade.
“Apart from health concerns, increasing numbers of millennials in direct sales also plays a part in driving the industry’s growth,” Mrs Suchada said.
There are 32 direct sales companies under the TDSA. Their sales make up 60-70% of the country’s total direct sales.
“With the successful online platform, new and existing direct sales companies are likely to put more focus on online channels to boost their sales in the coming year,” said Mrs Suchada. “Moreover, they will also recruit millennials to join their businesses.”
She said direct sales seems to be a suitable career for millennials, who not only prefer entrepreneurship over being salaried employees, but also actively engage on social and digital platforms.
Millennials working at direct sales companies under the TDSA represent 8-10% of the total, up from 3-4% in the past 3-4 years.
Mrs Suchada expects Thailand’s direct sales segment to grow by 5% to 99.8 billion baht in 2018. The growth in sales will come from several factors, including the including economy. Direct sales companies have also already adjusted to adapt to the digital era.
In 2016, the global sales volume in direct sales amounted to US$182.6 billion (6.05 trillion baht), with a three-year compound annual growth rate of 5.2% (2013-16), and the number of direct sellers totalling over 107 million worldwide, up 3.1% year-on-year.
Last year, Thailand ranked 13th globally, with total sales volume of 87.6 billion baht.
In Asean, Thailand ranks as the second-largest direct sales market after Malaysia. Direct sales has also found traction in the Philippines, Indonesia, Vietnam and Singapore.
In a related development, Mrs Suchada said Thailand was recently selected by the World Federation of Direct Selling Associations to host the WFDSA World Congress in 2020.
The move shows the strength and potential of Thailand’s direct sales industry, she said. The World Congress is expected to attract 1,000 participants from direct selling and related business, generating cash flow of 100 million baht.
Source: https://www.bangkokpost.com/business/news/1345006/direct-sales-to-see-new-entrants-in-2018