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Who are Thailand's Online Shoppers? How are They Shopping Online?

JANIO

This is part of our ‘Breaking into Thailand’s e-commerce Market’ series. In this series, we’ll look at e-commerce opportunities in Thailand and how best to reach Thai online shoppers and how to deliver the best e-commerce experience to them.

In part 1, we’ll understand more about our Thai consumer’s behaviours and how you can reach them online.

Part 2 discusses the last mile fulfilment challenges when shipping in Thailand.

  • Understanding Thai Online Consumer Behaviour

  1. More Thais are spending on luxuries

  2. Thais are brand loyal, as long as it’s not too pricey

  3. Thais are digitally and socially savvy

  4. More Thai Women are Purchasing Decision Makers in their Households

  • Reaching Thai Consumers

  1. Building Trust

  2. Cash on Delivery

It’s easy to think of Thailand as being home to tuk-tuks, green curry, and beaches. Yet few may know that Thailand is also synonymous with an exciting, budding e-commerce scene.

Thailand rose to 32nd place in the World Bank’s Logistics Performance Index (2018) from 45th place in 2016. Her rapid rise is reflective of the government’s increased transport & logistics infrastructure spending in the Thailand 4.0 plan. The Thai e-commerce market is currently valued at US$3.8 billion and is expected to grow 22% annually till 2020.

With an improving logistics infrastructure in the future and a rising middle class, the opportunities for e-commerce growth in Thailand is clear. The question then becomes ‘How can you capitalise on this opportunity?’

Understanding Thai Online Consumer Behaviour

1. More Thais are Spending on Luxuries

To better understand the Thai e-commerce market, it is integral to understand what our Thai shoppers are like. Thailand has a rising middle class that is more willing to spend these days. 61% of high-income households (earning more than THB50,000 monthly) choose to dine out regularly. When they do, they spend three times more than lower middle-income groups.

Thailand’s increased spending on luxury and experiences is an often-seen trend in developing nations with increasing incomes. Less conservative in their consumption than their neighbours, Thais are more willing to borrow more to fuel their purchases.

BCG interviewed some Thai consumers on their rising debt levels and found that they believe that indulging in luxuries is a reward for their busy lifestyles. If you are able to supply Thai consumers with the quality they are looking for, opportunities abound whether you are offering consumer products, luxury goods, or experiences.

2. Thais are Brand-loyal, as Long as It’s Not Too Pricey

Thai consumers are the most brand-loyal among Southeast Asian consumers. However, convenience, quality & price are still major factors in Thai purchasing decisions.

More than a third of respondents in a McKinsey survey chose to stick with their preferred brands but would look for places that sold them at a cheaper price. However, 13% of survey respondents were willing to trade to more affordable brands. Among this group, 62% of them did not revert to purchasing their favourite luxury brands.

When pricing your goods, it’s better to do some field research and find out how much your competitors are pricing their goods in Thailand. You may be able to break into Thailand if your goods are slightly cheaper than your competitors, while still retaining high enough quality that you gain loyalty from Thai consumers.

3. Thais are Well-connected and Well-informed

A major part of any successful e-commerce strategy is to find out how your target audience gathers information and makes decisions.

E-commerce and social commerce are some of the major trends in the country. This is driven by high mobile penetration rates (95%) & heavy social media usage (4.2 hours a day, the highest among SEA countries).

Thais want to stay well-informed before making purchase decisions, with 40% of customers depending on reviews and recommendations online. Most of the time, this is done on platforms like Facebook and LINE. This means that word-of-mouth and positive reviews are critical when it comes to e-commerce Thailand, similar to other established e-commerce markets.

4. More Thai Women are Purchasing Decision Makers in their Households

Thai women, in particular, are an e-commerce market segment worth noting. Thai women are well-educated, with those aged 15 or older having one of highest employment rates (64%) in any global economy including North America and Western Europe. With higher purchasing power, Thai women often take on the role of primary decision makers in the household, even for traditionally male purchases such as alcohol & durables.

Thai women are shrewd too – 27% of them research products online before making purchasing decisions, and 29% of them follow through with purchases online. In comparison to the 21% research rate and 18% follow through rates borne by men, providing more information on product quality and pricing could help you convert more sales when it comes to female shoppers.

Reaching Thai Consumers

Thai shoppers can be hyperaware, price-conscious and socially sensitive. What we can do is build your brand’s strength and gain loyalty by building trust and being transparent with the costs and details of your products and website. For instance, when setting up your e-commerce page, maintain & organize your prices, products and delivery information in a transparent and easy-to-understand way.

Building Trust

Trust is a big factor for Thai e-commerce consumers. The fear of fraud in online shopping deals was cited as one of the major concerns that Thai consumers have when it comes to e-commerce. Overcoming this barrier brings you one step closer to closing sales with Thai online shoppers.

In order to build trust, Thais prefer a more personal touch when it comes to online purchases, preferring to interact directly with sellers on platforms like Facebook or Instagram before making a purchase. For instance, La Mignonne, a popular Thai online clothes store on Facebook, has a customer service team that responds to customer queries or feedback via Facebook comments and has 1.5 million followers there.

It is also vital to note that they would prefer dealing with other Thais and are comfortable with people who speak their language. If you are planning on selling to Thailand, it’ll be a good idea to have a local team in place to engage shoppers and provide customer service.

To provide more price transparency, shopping search engines & shopping comparison sites aim to streamline the market by aggregating price & search results. These companies, like Priceza & iPrice, drive customers to the best sites based on their motivations, such as brands or pricing.

Cash on Delivery

Offering payment methods that people are familiar with can help customers follow through with their transactions on your online store. In Thailand’s case, popular payment methods include Cash on Delivery and ATM bank transfers. Some online stores also provide offline points-of-sale via convenience stores.

70% of Thai online shoppers express a preference for cash on delivery (COD), making this the prevalent payment option. This preference is likely driven by low credit card penetration in Thailand, and possibly to check on the condition of the delivered item before committing any payment to prevent fraud.

It would be a good idea to look to diversify our payment options to include options like COD. However, before deciding to offer COD as a payment method, have a look at the pros and cons of this method. There are also shipping partners who are able to facilitate this payment option for you, which can save you the trouble of planning for all of this on your own.

In Summary

The Thai consumer is becoming increasingly tech-savvy and knowledgeable when it comes to e-commerce. In order to succeed in the Thai market, we’ll need to remember to earn Thai shoppers’ trust. Be transparent about pricing and deliveries, use a more personal and conversational approach with them, and offer them payment methods that they are comfortable with are good places to start.

However, this only covers how to reach them online. After closing the sale, we’ll still need to factor in how best to deliver their item from your premises to the Thai shopper’s doorstep. Keep an eye out for our next article where we’ll share with you the potential logistics challenges when delivering in Thailand and how best to deal with them.

To find more on the latest news on logistics and e-commerce in Southeast Asia, consider signing up for our Janio newsletter.

If you’d like to find out more about how we can solve your SEA e-commerce cross-border delivery needs, come and have a conversation with us.

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