Why Thailand could be your next e-commerce growth market

A significant driver of this growth is the country's youthful and tech-savvy population. The majority of Thai consumers are young, with a high level of digital engagement, leading to a boom in mobile shopping. As smartphone penetration continues to rise, more Thais are turning to their devices for seamless online shopping experiences.

Given this impressive level of digital engagement, it's time to rethink your payment operations in this burgeoning market, tapping into Thailand's tech-savvy consumers who are ready to embrace innovative payment solutions.

A Snapshot of Regulatory Advances

Thai regulators have been making significant strides in digital infrastructure, e-payment systems, and cross-border e-commerce, which are key drivers behind Thailand's booming e-commerce sector. The Thai government has heavily invested in the Thailand 4.0 initiative to strengthen the national broadband network and provide affordable high-speed internet access across the country. Initiatives like PromptPay, part of the national e-payment scheme launched in 2017, aim to promote a cashless society. Additionally, the Bank of Thailand has eased currency restrictions, making it easier to conduct cross-border transactions. These regulatory policies and infrastructural improvements collectively enhance Thailand's digital ecosystem, positioning it as a key player in the global e-commerce landscape and fuelling its rapid growth.

Thriving in Thailand's E-Commerce Boom

Thailand's regulatory landscape has made its e-commerce market poised for significant growth, expanding from USD 23.4 billion in 2022 to USD 34 billion by 2025, with a compound annual growth rate (CAGR) of 10.2%. This growth highlights the country's high e-commerce user penetration, expected to rise from 41.2 million users in 2023 to 45.8 million by 2027.

Mobile shopping is a major driver of this expansion. With internet penetration projected to hit 84% by 2026 and smartphone ownership already at the same level, Thai consumers are tech-savvy and diverse in their online purchasing habits. They buy everything from consumer goods to travel services, making it a vibrant market.

The youthful demographic plays a crucial role in Thailand's digital transformation. With a young population embracing trends like mobile and social commerce on platforms like TikTok thrive. Notably, 62% of e-commerce buyers are aged 17 to 36, influencing online shopping trends. Platforms such as Shopee, Lazada, and Jib capitalise on this trend with advanced logistics and delivery systems.

Cross-border e-commerce is also thriving, constituting 30% of Thailand’s market. Nearly half of Thai online shoppers make purchases from abroad, with China, the US, and Japan being top origin markets.

Understanding the Local Payment Landscape of Thailand

To thrive in Thailand’s e-commerce market, online businesses must navigate a varied and dynamic payment landscape. Bank transfers dominate, accounting for 31% of transactions, followed by cards and e-wallets, each capturing 22%. Cash on delivery remains significant at 18%, while direct debits, e-invoices, and other methods hold smaller market shares.

Traditional credit card usage, although present, is often overshadowed by a significant preference for alternative payment methods. Prominent among these are PromptPay, a real-time payment system introduced by the Thai government, and e-wallets such as TrueMoney Wallet and Line Pay, which have gained substantial traction among consumers. These payment methods are favoured for their convenience and lower transaction fees. Additionally, local banks and financial institutions have collaborated to enhance the efficiency and security of digital transactions, ensuring a seamless payment experience for users.

Challenges for doing businesses in Thailand

1. Adapting to Popular Local Payment Methods
   Foreign businesses looking to do business in Thailand often struggle with the strong consumer preference for local payment methods like PromptPay, TrueMoney Wallet, and Line Pay over traditional credit cards. Integrating these options can be technically complex and time-consuming. Without them, businesses risk losing customers who prefer local payment methods.
   
   
2. Navigating Currency Restrictions
   Despite eased restrictions by the Bank of Thailand, historical challenges with using the Thai Baht for cross-border transactions persist. Businesses need to navigate regulatory requirements, manage currency exchange rates, handle fund repatriation, and comply with local banking regulations.
   
   
3. Delivering Comprehensive Regional Solutions
   Businesses in Southeast Asia often seek integrated solutions that cover multiple markets. This demands comprehensive, scalable solutions for diverse market needs. Businesses seeking to do business in Thailand should invest in infrastructure supporting various currencies, payment methods, and regulatory environments, and form strategic partnerships with local entities to ensure compliance and efficiency.

Our solution for Thailand

At Worldline, we’ve been building solutions for high growth e-commerce markets that are challenging to enter for many years. By studying the local market and building partnerships within local banking and payments ecosystems we’ve built a blueprint for successful e-commerce solutions in markets like South Korea and Türkiye where similar market dynamics and payment and business challenges exist. We know what works and have applied our winning formula to Thailand. We’ve partnered with leading Thai payments company Opn which will help maximise market opportunities by providing improved approval rates and reducing cross-border payment costs through local acquiring and flexible remittance options.

Customers who have gone live with our solution have experienced an approval rate increase of up to 5%. We are currently accepting customers in retail, marketplaces, digital, gaming & media, and travel businesses.

At Worldline, our goal is to help you operate like a local—simplifying complexities and boosting profitability. By integrating with Thailand's vibrant payment landscape, we empower you to connect with Thai consumers effectively. Our solution ensures access to popular payment methods, improved performance through local acquiring, and flexible remittance solutions, making your expansion into Thailand both seamless and successful.

Read more about our solution on our dedicated website.