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62 1. E-commerce market conditions in Thailand
According to Thailand e-commerce market development report issued by Thailand ETDA, e-commerce market scale has reached 2.24514700 trillion bahts in 2015, in which the B2B market volume reached 1.3 trillion bahts, accounting for 59.45% of the e-commerce market. In addition, the agency is quite optimistic about this year's e-commerce market’s expected scale, claiming that the total quantity will reach 2.5 trillion bahts, with an increase up to 12.42%, accounting for 40.08% of the country's goods and services.
At present, the assessment of overall scale of Thailand’s E-commerce comes from a statistical survey conducted by ETDA. The survey collected a total of 527.324 thousand Thailand’s electric business practitioner information, covering 8 industries, such as manufacturing, retail and wholesale, logistics and transport, accommodation services, media and communications, insurance, arts and entertainment and other service industries. Some small and medium enterprises are also involved.
The E-commerce development secretary Sulan Kana said, Thailand E-commerce market’s better growth mainly lies in 3 aspects of support: Firstly, communication technology is continuously developing and the popularity rate of smart mobile phone is increasing;
secondly, the government policy support efforts increase; finally, the financial business changes quickly, such as the use of officially promoted Thailand PromptPay, electronic credit card, the tax and electronic office system etc..
The survey results show that Thailand e-commerce market scale reached 22451.47 bahts in 2015, in which B2B market scale reached 13348.9 billion bahts, accounting for 59.45%;
B2C market size reached 5099.9800 billion bahts, accounting for 22.72%; B2G market scale accounts for 17.83%, with a total of 4003.39 billion bahts.
In 2016, according to Bain & Company research, over 11 million Thai people have had online shopping experience, which is expected to grow exponentially in the next 3-5 years.
"Strong demand for shopping", "attractiveness in price and quality", "easy and simple",
"smooth logistics" and "flexible and diverse payment system" will be the driving force for growth. Moreover, more than half of the online shopping behavior in Thailand is completed by the mobile device, part of which is finished by the use of 4G data.
The following is the major event in Thailand E-commerce market in 2016
In January, the international logistics DHL opened Thailand’s domestic express business
In February, Lotte announced the sale of all the shares of Thailand E-commerce Tarad
In March, linepay cooperated with offline trading platform Rabbit to form Rabbitlinepay integrating online and offline payment in Thailand. Thailand intends to use the "anyID" function to establish a national electronic payment system.
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In April, Baidu wallet opened overseas payment business in Thailand. Zalora sells Vietnam and Thailand business to Thailand central group. Ali Group spent $1 billion to acquire Lazada.
In May, the Thailand central bank warned: We-Chat payment business has not been authorized in Thailand. LINE launched O2O external delivery service LINE- MAN in Bangkok of Thailand.
In June, ant financial service planned to purchase 20% shares of Thailand pay- ment company AscendMoney. Facebook test social networking payment functions in Thailand. Ensogo announced the closure of Southeast Asia E-commerce market.
In July, Thailand version of Tmall Wemall domain name was formally launched. In mid July, Thailand government fully implemented the electronic payment system PromptPay.
South Korean electricity supplier 11street launched its Thai version platform and mobile App and entered into the Thailand market. Facebook first opened FacebookShop electronic business platform.
It is not difficult to see that, different powers march towards Thailand’s E-commerce market, which is booming. Facebook’s attempt in Thailand once again demonstrated a powerful social networking E-commerce opportunity in Thailand. With the introduction of the national payment system in Thailand, it will further stimulate the E-commerce activities in Thailand.
2. Classification of different categories for e-commerce industry in Thailand
At present, there are three major models for Thailand e-commerce industry, including B2C (transactions between enterprises and individuals), B2B (transactions between enterprises and enterprises) and B2G (transaction between enterprises and the government).
The following part tries to learn the general situation of the development of e-commerce industry from different aspects.
2.1. Classifying according to the type of economic activities. As of 2013, Thailand e-commerce economic activities mainly adopt B2C model, accounting for 79.7%; which is followed by B2B, accounting for 19. 3%; and B2G accounts for 1% (excluding government electronic auction).
2.2. Classifying according to the category of sales. The most popular item includes related online booking and services related to travel, hotel and other services, accounting for 24%; followed by clothing, jewelry and other ornaments, accounting for 23.3%; computer and related electronic equipment accounts for 19. 2%, service industry accounts for 7%; printing and office industry supplies account for 4.9%; machinery and related products account for 4.1%; the other categories’ goods account for 17.5%.
2.3. Classifying according to the number of direct employees. The major small e-commerce enterprises (namely 1-5 people direct employees) account for about 66.8%;
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followed by medium-sized e-commerce enterprises (namely 6 - 50 people direct employees)that account for 26.6%; finally, the large e-commerce enterprises (namely over 50
direct employees) account for 6.6%.
2.4. Classifying according to the online and offline sales model. Around 61.9% of the E-commerce suppliers have both network sales and store sales; about 37.2% of the E-commerce suppliers only have online sales; 0.9% of the E-commerce suppliers combine the
online sales with other sales (such as direct sales, consignment and other channels of retailing).
3. Problems existed in the development of e-commerce in Thailand
At present, there are still many problems in the development of e-commerce in Thailand, in which the major problems are:
3.1. It’s susceptible to external factors. For example, affected by the global financial crisis in 2009, Thailand B2C model sales fell by 27.6%, causing that CAGR of e-commerce sales from 2009 to 2015 was only 7.2%, and the market scale accounted for only 0.8% of the global market.
3.2. The industry model structure is irrational. For example, online transaction volume of the most popular B2C trading model in 2015 was just 1 /6 against the E-commerce supplier market turnover, B2G model turnover still accounted for the most part.
3.3. E-commerce business tax issues. Rare people pay taxes even if Thailand’s E-commerce industry develops rapidly. Therefore, the government intends to formally standardize tax regulations from 2015. Moreover, E-commerce associations strengthen the knowledge publicity and communication with operation providers, thus forming promoting mechanism for E-commerce practitioners to pay taxes.
3.4. Lack payment platforms with security guarantee. At present, Thailand still lacks payment platforms that can guarantee consumers’ online banking transaction security, which greatly hinders the development of e-commerce in Thailand. China Alipay’s perfect payment security system demonstrates that, it’s imperative to gradually establish a reliable and secure e-commerce platform in Thailand.
4. Future development trend of e-commerce in Thailand
The year of 2014 is the hallmark year for Thailand e-commerce’s leaping development.
E-commerce has increasingly become the main way for consumers to have transactions with the rapid development of online sales and payment systems.
4.1. Mobile internet. Mobile Internet will become the major trend of e-commerce development in Thailand in the future. At present, an increasing number of 4G internet and other mobile phone users have joined the mobile internet. The collocation transaction security improvement for 4G service users will increase the online trading activity, so that the scale of
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e-commerce sales will rise sharply. As a result, mobile Internet users will have increased demands for e-commerce in Thailand’s future e-commerce development.
4.2. E-commerce internationalization is intensifying obviously.Nowadays, E-commerce in Southeast Asia and other countries of the world is extending to all over the globe, for example, Qutian shopping (China) sells goods to Singapore, Malaysia and Indonesia through the internet, which is expected to soon arrive in Thailand; Alibaba also came into contact with Southeast Asian countries, which will also soon enter Thailand; Thailand’s duty-free group King Power officially entered China’s market through the cross-border E-commerce, which all display that E-commerce is gradually moving towards the globe.
4.3. Personalized promotion and marketing. Different enterprises may have different situations and problems, thus their marketing strategies shall also be different. The internet marketing has been gradually put in focus and began to develop rapidly, selecting a personalized promotion methods will become a priority of internet marketing. After all, targeted promoting strategy can be a good way for companies’ marketing.
5. Research methods
This paper mainly adopts literature research method. History, present situation and national policy related data on Thailand’s e-commerce are mass collected for comprehensive- ly and correctly understanding the relevant issues and carrying out qualitative analysis. This paper has a comprehensive macro understanding of Thailand’s e-commerce, puts forward problems and searches for solutions and suggestions.
Summary
Compared with other countries in Southeast Asia, the Thailand’s E-commerce market has the particularly obvious advantage, displaying by leading operator number, marketing methods and consumer behavior preferences. Meanwhile, there are many favorable promoting factors in Thailand’s E-commerce market, such as the the digital economy strategy implemented by government, which focuses on the development of infrastructure and the law amendment etc.. In the meantime, the rapid development of mobile communication market also promotes the development of the E-commerce market.
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