Thailand’s E-commerce Landscape: Popular Channels and Government Roles

Thailand’s e-commerce market has experienced exponential growth over the past decade, driven by increased internet penetration, smartphone usage, and a shift in consumer behavior towards online shopping. According to GlobalData’s 2023 Financial Services Consumer Survey, more than 92% of Thai consumers have made online purchases in the last six months, with only 4% indicating that they have never shopped online. The survey also indicates that Thailand’s e-commerce market is rapidly growing, with a projected surge of 13.7% in 2024.

In this article, we explore the most popular e-commerce channels in Thailand and the government roles.

Popular E-commerce Channels in Thailand

Several e-commerce channels are popular among Thai users. Among the established and dedicated e-commerce platforms, Lazada and Shopee are the major players. In 2023, Shopee Thailand reported a profit of around 2,165 million baht and earned 29.5 billion baht in revenue, while Lazada Thailand made a profit of around 604 million baht and earned approximately 21.5 billion baht in revenue. Both platforms have been established in Thailand for quite a while—Lazada since 2012 and Shopee since 2015—and have attracted millions of users with their competitive pricing, reliable delivery and after-sales services, regular promotional events, wide variety of products, and seamless integration with local payment methods.

The arrival of Chinese e-commerce giant Temu in Thailand in July 2024 has sparked significant reactions from both the government and the public. The Thai government has expressed concerns about the impact of Temu’s competitive pricing on local businesses, particularly small and medium-sized enterprises (SMEs), as well as Temu’s failure to register and comply with Thai laws. However, in practice, the government’s approach has been inconsistent and lacks the necessary strength to effectively address this matter. This inconsistency has led to perceptions of unequal treatment and insufficient scrutiny compared to other established platforms that comply with all relevant Thai laws.

E-commerce channels in Thailand extend far beyond dedicated e-commerce platforms. TikTok Shop has rapidly gained popularity in Thailand, leveraging the platform’s massive user base and engaging content. According to data here, Thailand tops the global chart in terms of TikTok Shop sales. A recent survey indicates that the top shopping platforms used by Thai consumers in the past month were Shopee (75%), Lazada (67%), and TikTok (51%).

Other important channels that may surprise non-Thai users include Facebook Marketplace and Line Shopping, the two most popular social media platforms in Thailand. According to the Future Shopper Report, Thailand has the highest proportion of social commerce shoppers in the world, with 88% of consumers purchasing through social commerce platforms. Facebook remains the most popular platform, leading in purchase likelihood.

E-commerce Growth, Economy, and Government

The rapid expansion of e-commerce in Thailand has had a profound impact on the country’s economy. The sector has not only created numerous job opportunities but also contributed significantly to the GDP. According to the US Department of Commerce, in 2023, Thailand’s digital economy contributed about six percent, or $36 billion, to the national GDP, with expectations to grow to around 11 percent by 2027. Latest data from the Electronic Transactions Development Agency (ETDA) also revealed that the Thai e-commerce value in 2023 was expected to reach 5.96 trillion baht.

Moreover, the e-commerce boom has spurred the development of related industries, such as logistics, warehousing, and digital marketing. Companies are investing heavily in infrastructure to support the growing demand for online shopping, leading to improved delivery services and more efficient supply chains. This, in turn, has enhanced the overall business environment in Thailand, making it an attractive destination for foreign investment.

To foster the continued growth of Thailand’s e-commerce industry, it is crucial for the government to adopt policies that support innovation, competitiveness, and modernize regulations to adapt to international standards. Modernizing regulatory frameworks will be crucial for the growth of Thailand’s economy. It is important to ensure that regulations are not overly burdensome, as this can stifle innovation and growth. For example, Thai FDA’s advertisement laws can be much improved and modernized. Additionally, fair competition and uniformly applied standards across all players in the field are essential.

Meanwhile, SMEs should be supported. Targeted assistance to help SMEs transition to online platforms, possibly through collaborations with the platforms themselves, can be very beneficial. This support may include offering training programs, financial incentives, and access to digital tools that can help them compete effectively in the e-commerce space.

Creating an environment that fosters innovation by supporting research and development in the e-commerce sector is also important. This may involve assisting tech startups and tax incentives for companies investing in new technologies.

Additionally, combating fraud and scammers is a significant issue in Thailand. A survey involving 9,360 Thais revealed that 58% noticed an uptick in scam attempts compared to 2023, with 89% encountering scams at least once a month. A recent report by expert in the field also uncovered startling figures about scams in Thailand, showing that over 28% of respondents had fallen victim to fraudsters in the past year. The government has been intensifying efforts to combat call center scams and online fraud by enhancing collaboration between banks and telecom operators to swiftly share information and block illicit fund transfers. When consumers feel that their transactions are secure and that there are effective measures in place to protect them from fraud, they are more likely to trust the digital economy and be active in e-commerce.

Few Thai businesses expand internationally through e-commerce, highlighting an area ripe for increased focus. The government can explore various strategies and negotiations to reduce barriers to cross-border e-commerce. Simplifying customs procedures and lowering tariffs will facilitate easier access for Thai businesses to global markets.

The Thai government can support the growth of the e-commerce industry, ensuring it remains a dynamic and integral part of the economy while avoiding the pitfalls of outdated and impractical policies.