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For eCommerce merchants in Singapore conquering the local market is usually top of mind, but to ultimately grow your reach you’ll need to expand beyond this island nation’s borders. Fortunately, Singapore is surrounded by strong markets, and one of them strongly worth considering is Thailand.
Thailand has a large base of internet users with 75 per cent of the population, or 52 million people, connected to the internet. They are mobile-first with We Are Social’s recent 2020 report1 highlighting that 69 per cent of internet users bought products online via mobile devices compared to just 34 per cent who make online purchases through laptops or desktops.
Some of the products categories that are popular among Thai consumers include fashion, mom and baby products as well as consumer electronics. According to We Are Social, fashion and consumer electronics, in particular, are worth noting - the amount spent on these in 2019 are USD 1.03 billion for fashion and USD 1.15 billion for electronics and physical media.
In an earlier report by McKinsey2, their Thai respondents mentioned they are brand-loyal but look out for affordable alternatives. They also believed that spending on luxuries was great for rewarding themselves. However, with the recent COVID-19 outbreak, there is likely to be more opportunity for cheaper alternatives to do better in Thailand.
Most of the online sales will be taking place in the Greater Bangkok Metropolitan region. This region consists of Bangkok, Samut Prakan, Pathum Thani, Samut Sakhon, Nakhon Pathom and Nonthaburi.
Together, this highly developed business centre made up 46.38 per cent of Thailand’s total GDP, with Bangkok contributing 32.5 per cent of Thailand’s total GDP on its own, according to the National Economic and Social Development Council3. Mitsui4 believes that Bangkok is on its way to becoming a megacity, with its population breaching the 10 million mark.
As an economic centre, Thailand’s busiest airport and its main economic gateway, Suvarnabhumi Airport5 (BKK) is located in the Bangkok Metropolitan Region. This area’s closest sea port is the Bangkok Modern Terminal (THBKK).
Your supply chain requirements when it comes to shipping from Singapore to Thailand varies depending on factors like what you’re shipping, how much you’re shipping and how quickly it needs to get there. But generally, the shipping process would usually follow these steps.
The first mile delivery stage in international shipping refers to the stage where your shipment leaves the origin address, be it your own storefront, office, or warehouse. To minimise delays, ensure your parcel or order is packaged and labelled appropriately to facilitate smooth cross border shipping.
Packages may sometimes experience events like turbulence that can move them around during the shipping process. Thus, having extra padding for fragile items, like bubble wrap, packing peanuts, or cardboard separators is recommended to prevent your products from getting damaged during shipping. To learn more about the best practices in packaging your goods, you can check out our packaging 101 article.
Additionally, you must ensure that your shipping labels and the appropriate customs documentation are visible and accessible for customs officers to inspect the shipment. We have previously covered the best practices for labelling your shipments and other useful tips for B2C shipping to Southeast Asia.
Once the shipment is ready to be handed to your shipping partner, you can choose to have your order picked up from your origin address or drop it off at your shipping partner’s drop-off point. Bear in mind that most shipping partners have a cut-off time for submitting orders for drop offs and pick ups so that they can optimise their route.
If you’re shipping a B2C parcel, it’ll be consolidated at a transportation hub with other packages heading towards the same destination country before it can clear customs. Since B2B shipments already have a larger weight and volume than B2C shipments, they can be transported directly to the origin warehouse for customs clearance.
If you’re planning on serving both the Singaporean eCommerce market as well as Thailand’s and beyond, you can consider getting a warehouse in Singapore’s Free Trade Zone. Free Trade Zone warehouses also allow you to defer tax charges on non-dutiable goods until they enter a country’s official borders. This helps with both cash flow and also as a storage area for regional hubs in Southeast Asia like Singapore.
Once your shipment arrives in Thailand, it’ll be transported from the airport or port to a customs warehouse for clearance. This is where Thai customs officers will inspect your shipment and shipping documents and determine if your product can be cleared for import into the country.
To clear customs for import into Thailand, you or your shipping partner would generally need to provide the following documents:
If your goods are below Thailand’s de minimis value of THB 1,500, your shipment will be exempted from duties.
The de minimis rate refers to a price threshold where fewer or no duties and taxes are charged if the shipment’s value is below that point. In Thailand, this value takes into account your shipment’s CIF (cost, insurance and freight) value, which includes your good’s price, shipping fee, and insurance costs if any.7* However, this exemption only applies to shipments sent via air freight. Thus, if you’re sending your goods with sea freight into Thailand, you still need to pay import duties and taxes.
But if your goods exceed the de minimis threshold, you’ll need to pay import duties in the range of 5% to 30% and a value-added tax (VAT) of 7%. The percentage of the import duties is determined by your product’s harmonised systems code (HS Code). You may find out the percentage of import duties for your specific goods in this Tariff Finder.8*
If you’re a merchant shipping a B2C parcel, you can choose to either pay for the import duties and taxes yourself or let your customers pay for the import duties and taxes. This can be determined from the incoterms Delivered Duties Unpaid (DDU) or Delivered Duties Paid (DDP). While we strongly encourage you to opt for DDP to keep your B2C shipping experience smooth, it also helps to familiarise with what these arrangements mean.
Your shipment will enter the distribution stage once it has cleared customs. If you’re shipping a B2B order, it can be delivered directly to the consignee’s address. B2C shipments will go through sorting at a transportation hub before they enter the last mile delivery stage. At the transportation hub, B2C parcels will be distributed to appropriate vans or motorcycles before the final leg of the delivery to consignees.
Last mile delivery refers to the stage where your shipment is delivered from the destination warehouse to your consignee’s address. This is typically done through multiple delivery attempts and notifications to your consignee using vans or motorcycles. Unlike the Philippines or Indonesia, deliveries in Thailand tend not to require domestic flights before last mile delivery can begin.
With the knowledge of the full shipping process for sending your items from Singapore to Thailand, you’re now in a better position to choose a suitable shipping partner. It’s best to find one who can cover every step of the logistics supply chain, but having a logistics partner who is flexible can also be a boon if your supply chain is complex. When choosing a logistics service provider, consider the cost, speed, and delivery experience you’d like to offer before committing to a shipping solution.
With eCommerce likely to play a greater role in daily life all over Southeast Asia and in Thailand, expanding internationally into this market means that you’ll be getting a headstart from your competitors. To give your Thai consumers a great eCommerce experience, it helps to have a reliable eCommerce shipping partner that can deliver on time. That way you can delight your customers with efficient delivery speeds while ensuring that your hottest products are always in stock.
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.
We have other guides on how to ship from Singapore to Southeast Asian destinations here:
For more information on Singapore as a destination, we also have these guide here:
References:
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