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Thailand is home to 69.1 million people and with a total eCommerce market value at US$2.9 billion1 in 2018. This value is expected to grow to US$6 billion in 20222. As an eCommerce merchant, expanding your sales overseas to Thailand is a great opportunity for growth.
The country’s prime location in the Greater Mekong Subregion (GMS) which consists of China’s Yunnan province, Cambodia, Laos, Myanmar and Vietnam means Thailand sees plenty of trade all year long. With the Thai government’s recent plans to improve Thailand’s infrastructure3 and the country’s rising middle class4 it is not a market to be looked over.
When considering Thailand’s market, it is vital to have a detailed plan for shipping your goods there. Thai eCommerce consumers, primarily situated in Bangkok and Greater Bangkok, are demanding faster and more reliable deliveries with some even wanting next day deliveries. Greater Bangkok, also known as the Bangkok Metropolitan Region consists of Nakhon Pathom, Pathum Thani, Nonthaburi, Samut Prakan and Samut Sakhon. With major airports and seaports are situated in the Bangkok Metropolitan Region, it also has fairly developed infrastructure, fitting considering this region also generates the majority of Thai eCommerce sales.
To reach Thailand, you’ll need a logistics provider who can reach your Thai consumers quickly and reliably. Look out for partners who know what you can and cannot ship into the country, and how to collect payment for your products. While shipping experiences may vary between shipping partners, this article aims to outline the general shipping procedure you need to follow and explain various processes that occur in cross-border fulfilment to Thailand.
Generally, the shipping steps you need to follow look like this:
In cross-border shipping, the delivery of a package involves multiple stages: first mile, customs clearance at origin country, air freight, customs clearance at the destination country, distribution, and last mile delivery.
As an example, goods could be shipped by truck from the merchant’s premises in Indonesia to Jakarta’s Soekarno-Hatta Airport (CGK). From there, it uses air freight towards Bangkok’s Suvarnabhumi Airport (BKK) and goes through customs clearance. After that the delivery is distributed via truck or motorcycle to the customer’s office or home.
Different shipping partners have strengths in different parts of the supply chain. Some companies specialise in only one stage of delivery while others provide end-to-end fulfillment services that cover all stages. Look out for a shipping partner that best suits your eCommerce logistics needs. When selecting a shipping partner, it’s a good idea to consider the mode of transportation, the shipping partner’s areas of expertise, and your delivery deadline. Bearing these in mind, we’ll briefly go through the pros and cons of 3 primary modes of transporting goods into Thailand.
For many eCommerce merchants, air freight is the transport mode of choice as it provides fast and reliable deliveries. Thailand has 2 major airports, Bangkok Airport5 a.k.a Suvarnabhumi Airport and Don Meuang Airport.6
Sea freight is cheaper but much slower than air freight. Consider your delivery deadlines before picking this option. Thailand’s main ports are Bangkok Modern Terminal (THBKK), Laem Chabang (THLCH), Map Ta Phut (THMAT), Sattahip Commercial Port (THSAT).
Having a prime location in the Greater Mekong Subregion, a large proportion of freight transport in Thailand is done via road transport. Roads transportation in Thailand is fairly developed and connects up to 98.5% of residents7 in the country, making it a key last mile transport mode especially for many Thai eCommerce customers situated in the Greater Bangkok area.
If your supply sources are closer to Thailand, such in Southern China or Malaysia, you could consider road transport as a fulfillment option. Trucks are more cost-efficient than air freight for shorter distances and have good reach in Thailand. When selecting your road transport partner, look out for their coverage of Thailand’s geographical areas and the rates they charge for transport to places your consumers will be.
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Appropriately packaging your products with the right packing materials is important in cross-border shipping. Packages may be subject to rough handling during its cross-border shipment to Thailand, so including additional packing materials like bubble wrap or packing peanuts helps prevent your products from bouncing around within the package during shipment.
Carriers usually offer multiple tiers of service in shipping. These delivery options mainly differ in their offered features, such as:
Typically, the more features offered, the higher the shipping fee is. Choose one that best suits your budget and shipping needs. You can also look out for a partner that has flexible, end-to-end eCommerce logistics solutions for both B2C and B2B needs like Janio.
When planning your shipment, you can consult your shipping partner for recommended steps in packaging your goods for transport.
Carriers will need merchants to provide package details to generate the documentation required by Thailand’s customs. The types of information carriers most commonly require are:
This information will be entered into a Customs Declaration form and shipping label by either you or the shipping partner if they offer this service. Always check that this information has been entered accurately. Incomplete documentation may trap your goods in customs.
Additional shipping charges could arise if the shipping company returns the packages to you.
Under-declaring the value of the items of your shipments on the commercial invoice could result in fines if the custom clearance agencies correctly suspect it. The courier may also charge you additional fees for undervaluing your goods.
Print and paste the shipping label, which contains the information you’ve entered in the previous step, securely onto the parcel. The addresses and bar-codes on the shipping label must be in clear view for identification and customs inspection.
Ensure the shipping documents can be found on the package. One way to do this is to place all supporting documents inside a clear plastic pocket and tape it onto the package. Do note that some of these documents, such as the Customs Declaration and commercial invoice, will require the sender’s signature.
Depending on the delivery option you select and service level the carrier offers, the carrier will collect the package from you either at the sender address you specified or at one of their drop-off points in your origin country.
If your selected service level includes track and trace, you’ll receive a tracking code for your package after your carrier receives the package. Your customer can also use this tracking code to find out where your package currently is.
It’s also good to note that Sunday is a non-working day in Thailand. Sundays and Public Holidays may delay shipments, so you may want to plan around when Thailand has its holidays.
Thailand’s customs require extensive documentation prior to clearing goods for import. For this, most carriers engage local customs brokers who are accustomed to the standard procedures and required format of documentation.
Minimally, the carrier must present the following to the relevant agencies
Certain types of goods are controlled by the Thai Ministry of commerce and are subject to different requirements and rules. For instance, some goods need additional documents like a permit and/or an import license from agencies like the Thai Food and Drug Administration to facilitate their clearance through customs.
It’s important to note that cosmetics are also in the list of restricted goods in Thailand. The types of products that are prohibited or restricted in Thailand changes from time to time, so it’s a good idea to check the Thai Customs page for updates9.
Additionally, they will charge import duty for incoming goods based on the goods classification from the Harmonized System Code. The Thai Customs website has a search function which helps you determine the amount of import tariff on your goods.10 Generally, they will charge between 5 - 30 percent import duty depending on the type of good being shipped.
On the other hand, there is a Value-Added Tax exemption for online shopping goods valued less than 1,500 Baht (around US$ 45) purchased from merchants outside of Thailand and shipped into the country. The VAT stands at 7% for goods online shopping goods valued above 1,500 Baht.
To ensure that your package doesn’t get stuck in customs, it is important to work with a logistics provider who is well-versed with the latest developments in customs regulations to better navigate the ever-changing landscape of customs processes.
In 2017, 70% of online shoppers prefer cash on delivery while only 6% of online transactions11 in Thailand are paid for using credit cards. Offering cash on delivery in your payment options is worth considering when venturing into the Thai eCommerce market because it may help customers be more comfortable buying from you.
However, not every logistics provider supports cash on delivery because of the additional payments infrastructure and processes needed to offer the payment method. Should you decide to offer cash on delivery on your eCommerce site after weighing the pros and cons, find a logistic partner that is able to facilitate it.
With Thailand’s eCommerce market expected to double in four years’ time, this is a great opportunity for merchants to grow their sales in Thailand. Having the right shipping partners will ensure a smooth shipping experience for you and your customers.
If you'd like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.
Interested in Thailand's eCommerce Scene? Find out more below:
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