The government’s digital push, Internet-savvy consumers, social media—these factors are fuelling the growth of eCommerce in Thailand. But what exactly are Thais buying, and why?
Among Thai online shoppers, three product categories have captured the largest share of demand: mobile electronics, fashion, and beauty.
According to the ecommerceIQ E-Marketplace Survey Thailand 2018, mobile electronics comprise a majority (24.75 per cent) of eCommerce sales in the country, followed by fashion (14.63 per cent), beauty (11.91 per cent), and lifestyle & hobby (11.5 per cent). Data from Statista supports this, noting that electronics counts for almost half of the market share of eCommerce in Thailand. Statista also shows that in terms of revenue, electronics & media leads the pack, followed by fashion, then toys, hobby & DIY.
The rest of the categories are:
Let’s take a look into what Thai online shoppers within each of the top three eCommerce product categories.
Among the five eCommerce websites in Thailand with the most monthly visits, the only two vertical platforms focus on electronics: Notebook Spec and Advice. They sell laptops, mobile phones, and accessories, as well as home electronics like TV monitors.
So as an online merchant, what types of mobile electronics should you sell to Thai shoppers? Take a cue from Priceza, a price comparison site, which reported that the top searched product by Thai users in 2017 were smartphones such as the Samsung A9 smartphone, followed by the iPhone 7 Plus and Oppo F1 Plus. This reflects the country’s top two most visited websites for consumer electronics as of May 2019: Samsung.com and Apple.com, followed by the marketplace Advice and JIB Electronics.
Keep in mind, though, that this only reflects the phones that consumers research about. In terms of overall sales in Thailand, one report concludes that Samsung held the top spot in 2017 but was edged out by Oppo in 2018. In Q1 2019, Samsung’s Galaxy S10 and Huawei’s P30 models reportedly clinched the highest number of sales—but appetite for the latter brand has waned ever since the US government blacklisted it in May. Meanwhile, Apple experienced a 52.2 per cent drop in sales from Q4 2017 to Q4 2018.
StatCounter offers a different view of the market, but still ranks Samsung, Apple, and Oppo as the top vendors in terms of market share from May 2018 to May 2019:
Statista likewise lists Samsung and Apple as the top two most widely used smartphones in Thailand.
It would be a good idea, then, for you to closely follow the news from these three vendors. Keep an eye out for announcements on new models, and explore flexible online payment methods, such as monthly instalments. For example, local marketplaces Tarad and PowerBuy offer instalment options.
Among websites in the “fashion and apparel” category, Nike.com was the most visited in Thailand as of May 2019, followed by Uniqlo, the marketplace Zilingo, and streetwear e-retailer CarnivalBKK. This suggests that Thai online shoppers may have an affinity for more comfortable clothing. Think street fashion—which can be both casual and trendy, like sneakers—as well as basics, which one can wear in and out of the office.
It also pays to find out what Thailand’s top fashion influencers are up to. Thai consumers are really well connected and also love following popular influencers on platforms like Instagram. According to Social Media Today, investments in influencer marketing could see eleven times the returns compared to traditional forms of marketing such as TV, print and desktop ads.
Zilingo is a fashion marketplace with more than 2,000 sellers across Southeast Asia. Its catalogue of best-selling items includes:
As with the trend among the most-visited fashion websites, Zilingo’s bestsellers suggest a preference for casual wear and for basics that can be dressed up or dressed down for work and play. You may want to try selling these items to capture a slice of Thailand’s fashion eCommerce market, too.
If you explore the marketplace, you’ll find that Zilingo also allows wholesale purchases, and even encourages brands to make their own private labels and sell clothes to businesses via Zilingo Asia Mall. Considering that business-to-business (B2B) transactions accounted for 55 per cent of eCommerce sales in Thailand in 2017 (compared to just 29 per cent for business-to-consumer sales), this represents an opportunity for fashion eCommerce merchants in ASEAN to target Thai enterprises.
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In 2017, Thailand’s middle class and affluent consumers made up 60 per cent of the country’s population. These affluent consumers are propelling the growth of Thailand’s beauty and personal care products market, and are increasingly demanding specialist and natural products.
For instance, you could offer higher prices if you’re entering the premium and speciality sector, offering natural and organic skincare, makeup, and haircare. Desire for such products reflects global trends; the global market value for the natural and organic beauty sector is expected to more than double from 2016 to 2024, reaching around US$20 billion.
You could also take advantage of the popularity of “K-beauty” and “J-skincare”—referring to products from Korea and Japan, respectively—among Thai shoppers.
If you’re looking for a more defined niche, consider anti-ageing skincare products, especially those made with natural ingredients. Demand in this sector is growing due to Thailand’s rapidly ageing society. Aged citizens make up 10 per cent of the population—a number that will increase to 20 and 30 per cent by the years 2031 and 2050, respectively.
Men’s grooming products, especially skincare and haircare, are also becoming more popular—at least among urban shoppers. The International Trade Administration notes that increased social acceptance of men’s grooming will continue to drive this trend, so you can expect a more dynamic men’s grooming market within the next few years.
Another major product segment is whitening skincare. Keep in mind, though, that backlash against this segment is starting to grow, spurred by a change in mainstream attitudes as well as by concerns about the harmful ingredients used in such products.
So if you aim to sell skin-lightening products to Thai online shoppers, you could source for those with safe and natural ingredients. Provide detailed explanations about the ingredients and their safety for use.
For a great example of how to do this, check out the online store of Lush, a global personal care brand. Apart from showing photos, videos and product descriptions, it displays a list of all the ingredients used in the product. Most ingredients are clickable, leading to a page that explains its uses, components, and benefits. You can find examples of this on this website.
Lastly—and in connection with the need to be more informed about the products they use—Thai consumers are increasingly demanding dermatologist and doctor brands for skincare. These brands capitalise on the advanced technology applied in creating them, and are often able to charge higher prices than mass consumer brands. This has led to the rise of the ‘masstige’, or mass prestige, derma brand.
Apart from these popular product categories, it’s wise to keep an eye out for prevailing and emerging trends. This helps you spot opportunities early.
As mentioned earlier, Thailand’s middle and affluent class is growing, and is driving demand for certain types of products. These consumers influence spending trends in the country, including a rising preference for luxuries and experiences, according to the Boston Consulting Group.
Luxury goods like high-end watches and jewellery are still pretty much the domain of brick-and-mortar shops, though. Still, this may change in the near future. The Internet is already part of the consumer journey for luxury goods and experiences, with 89 per cent of Thai consumers doing online research before purchasing high-priced items.
Keep in mind, too, that Thailand is one of Southeast Asia’s largest markets for luxury goods. This indicates an opportunity for you to sell premium products to Thai online shoppers.
Thai shoppers across all income levels are also described as being “very brand-loyal”. They choose reasonably priced foreign brands for home and personal electronics, as well as household cleaning and personal hygiene products. Sellers on Instagram are also finding a huge appetite for pre-owned designer goods, such as clothes and handbags.
If you find it difficult to source goods from popular brands, you can research items of similar quality and aesthetic approach, and sell those instead. Use images, videos, and product descriptions to explain to potential buyers how your goods are similar to those of popular brands. You can appeal to Thais’ desire to get value for their money by selling the items at a cheaper price.
And if you’re looking to enter a new niche, consider this: Shopee saw a 250 per cent increase in seller growth for motor products in 2018. This was partly due to the platform’s push to increase its percentage of male shoppers.
While targeting a new, narrow product category means having a smaller pool of buyers, it also allows you to create a more comprehensive market profile. By entering the category early, you could gain a first-mover advantage over other sellers.
Besides, eCommerce players believe that vertical marketplaces and specialty, niche sites represent a vast opportunity for Southeast Asia. They’re more cost-effective for sellers and can help them reach a targeted audience compared to general marketplaces.
Market demand influences the types of products you sell. Your own interests and expertise, as well as your ability to find the right suppliers, also help determine the product category you enter.
Whatever you decide to sell, it’s important to find your niche first, instead of just carrying a random assortment of goods. Become an expert in that product category and segment. Get to know your audience and competitors, build a reliable supplier network, develop targeted content, and determine which eCommerce channels and marketing strategies work best for that niche. Monitor major eCommerce sales events and holidays that affect demand for your product. Know what tariffs apply and which shipping partners can help you with customs clearance, cross-border shipping, and last-mile delivery.
Once you find your niche in Thailand’s eCommerce market, you can focus on growing your business, pleasing your customers, and even expanding your product range in the future.
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