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Who are Thailand's eCommerce Consumers?

Katrina B. & Benedict L

Who are Thailand’s eCommerce Consumers?

Do you know who’s buying your products—and why? What convinces consumers to buy from your online shop?

For online sellers, it’s important to answer these questions, especially when launching your shop in a new market. But even if you’ve been selling goods in that country for a few years now, you need to stay updated on shifting trends, and reassess whether or not you’re meeting your target market’s needs.

We’ve previously discussed what drives eCommerce in Thailand. This time, let’s zoom in on Thai online shoppers to understand their eCommerce journey.

eCommerce consumers in Thailand at a glance

But first, a few quick facts:

  • There are 39.8 million eCommerce users in Thailand1 as of 2019. That’s 6.1 per cent more than last year
  • 37.50 million2 Thais bought goods online in 2018—a 6.5 per cent increase from 2017
  • eCommerce user penetration stands at 57.4 percent1 in 2019, and will likely reach 67 per cent by 2023
  • Millennials, who make up 32 per cent of the country’s 68-million-strong population3, are the most active cohort in Thai eCommerce
  • More Thais from rural areas will soon be able to participate in eCommerce, thanks to a program to set up broadband networks in the provinces4
  • A majority—60.3 per cent5—of Thai online shoppers make eCommerce purchases once or twice a month, while 24.34 per cent do so once a week
  • In a Q2 and Q3 2018 survey6, 71 per cent of Internet users reported making an online purchase with a mobile device in the past month, compared to 32 per cent on desktop…
  • …but Thais still prefer desktop for larger basket sizes7
  • Thai online shoppers are more likely than any other nationality to shop via social media and messaging platforms.8

Of course, it’s not enough to just have a quick overview of the Thai eCommerce market. By taking a deep dive into the motivations and behaviours of Thai online shoppers, you’ll be able to improve your strategies for reaching and converting them.

Why do Thais shop online?

As the country’s largest consumer segment9, Generation Y or Millennials exert significant influence on the Thai eCommerce landscape.

Typically defined as those born between the early 1980s and the year 2000, this cohort, along with the younger Generation Z, spends the most time on the Internet10—up to 11-and-a-half hours on holidays and weekends. They most actively participate in eCommerce5, with up 61.9 per cent of Generation Y shopping online, compared to 32.6 per cent of Generation X (born from the 1960s to early 1980s) and 5.3 per cent of Baby Boomers (born from the mid-1940s to mid-1960s).

Millennials seek convenience and safety when shopping online. Across different generations, though, it’s the cheaper prices found online that drive Thais to participate in eCommerce. A little over half (51.4 per cent) of Thai online shoppers are motivated by promotions and discounts.5 Greater product variety11 also encourages Thais to shop online, as do free and fast delivery and more payment options.

The accessibility of eCommerce platforms via smartphones also drives Thais’ online shopping behaviour. A majority (67 per cent) use mobile apps to shop online, according to ecommerceIQ eMarketplace Survey Thailand 2018, as cited by Austrade.5 For high-priced items like smartphones and luxury goods, though, desktop computers and laptops remain the preferred medium for product research and purchase.

Thai online shoppers are keen to take advantage of loyalty programs, too. Central Group, a retail conglomerate, has a loyalty card12 that can also be used as a credit card for purchases on their e-retail website. Shoppers earn points for every purchase they make.

If you mostly sell products through eMarketplaces, you may not have control over payment methods. You can, however, keep an eye on these platforms’ major eCommerce sales events and run promotions in advance. You can also make sure that you offer a wider—or at least superior—product range than your competitors.

Make sure your online shop and social media content are optimised for mobile phones, too. Find a reliable eCommerce shipping partner, and research about all the payment methods that an eMarketplace provides.

Note that although Thais tend to prefer bank transfer and cash on delivery13, they are open to other options. For instance, money transfer is gaining traction5 thanks to efforts to standardized QR codes across different financial service providers and platforms, as well as the government’s National E-Payment Master Plan.13

Lazada Thailand, the country’s most popular eMarketplace, accepts the following payment methods:

  • Cash-on-delivery
  • Bank transfer
  • Credit card
  • Debit card
  • PayPal
  • Counter service

Tarad, a consumer-to-consumer marketplace with around 4.5 million average monthly visits11, allows mobile wallets and instalment payments, among other methods.

Take advantage of the variety of payment methods so you can make your customers’ shopping experience more convenient.

What are Thai online shoppers buying?

Thais have no qualms about buying most products online14, except for medicines, jewellery, and perishable grocery items. According to ecommerceIQ eMarketplace Survey Thailand 201811, the most popular products bought online are:

  • Mobile electronics comprise a majority (24.75 per cent of eCommerce sales in Thailand)
  • Fashion (14.63 per cent)
  • Beauty (11.91 per cent)
  • Lifestyle & hobby (11.5 per cent)

Data from Statista1 supports this claim, noting that in terms of revenue, electronics & media leads the pack, followed by fashion, then toys, hobby & DIY.

A survey by yStats15, though, identifies fashion as the top category in terms of purchases (44 per cent), followed by health & beauty (33.7 per cent) and IT equipment (26.5 per cent).

In other words, while electronics lead in terms of percentage of sales, fashion leads in number of purchases. This makes sense as electronics like mobile gadgets and smart watches have higher dollar values than most fast-fashion items. People also tend to buy new clothes more frequently than they do new smartphones.

If you sell gadgets and clothing, it’s good to know that you have a vast potential market in Thailand. But you also have plenty of competitors, so you’ll want to identify a segment of the market you want to address—for example, fitness gadgets, low-priced electronics, or Uniqlo-inspired smart casual clothing. (Uniqlo is the second-most visited fashion website in Thailand, according to SimilarWeb.)16

You can try targeting business customers, too. Business-to-business (B2B) transactions accounted for 55 per cent of eCommerce sales17 in Thailand in 2017, compared to 29 per cent for business-to-consumer (B2C) and 16 per cent for business-to-government (B2G). IT equipment would be a good category to begin with if you’re looking for popular B2B items to sell.

What influences Thai shoppers?

It comes as no surprise that Thais generally discover products and deals on Lazada and Shopee—the country’s top two eCommerce sites—through Facebook and Google.11 After all, Facebook is the most visited social site18 in Thailand, while Google enjoys a near-monopoly of search engine usage19 in the country.

 

Online advertising

Despite the fact that 46 per cent of Thai internet users use ad-blocking tools,20 55.9 per cent of Thais discover a brand or product through an online ad.5 There are a few explanations for this. One, ad blockers generally don’t apply to social media apps, although they do work when accessing a social media site on a browser. Another is that Google search ads also tend to be exempted from ad-blocking.

Finally, relevant ads designed to fit the user experience, design, and context of a website can still slip through ad-blockers.

That means online ads, especially those on social media and Google Search, are still useful and effective in influencing Thai consumers. In fact, a January 2019 survey cited by HootSuite found that Thais had clicked on 12 Facebook ads6 in the past 30 days—compared to seven posts liked, six comments made, two posts shared, and two pages liked.

So if you want to reach more online shoppers in Thailand, make use of Facebook ads21 and Google search ads.22 Leverage Thais’ heavy social media usage23 by working with social media influencers, setting up social commerce pages, and making your social media posts shoppable.24

 

Rich content

But don’t stop there. Keep in mind that when Thais discover a new product or brand, 89 per cent of them go online to do more research. This is especially the case for luxury goods, smartphones, and other high-priced items, but it also applies to other product categories.

For these researchers, rich content exerts a significant influence on online purchasing decisions. Austrade defines rich content5 as “high-definition pictures from multiple angles, in-depth product descriptions, and user reviews”. L’Oreal Thailand, for instance, saw a 30 per cent increase in sales after implementing rich content.

So make time to take high-quality pictures (instead of just relying on suppliers’ photos) of the items you sell. Provide detailed descriptions of their features and, if necessary, instructions on how to use the product. Include answers to customers’ frequently asked questions in the descriptions. Encourage your customers to share reviews, too.

If you have a website or private label, invest in search engine optimisation25 to reach the top of search results pages relevant to your niche. Rich content can also improve your search engine ranking for relevant search terms.

You should also consider developing instructional and entertaining content, be it in text or video format, related to the products you sell. A survey of Internet users in over 40 countries20, including Thailand, found that video content is highly effective in driving brand interactions, especially when ads fail.

Content is also popular on Line, Thailand’s most used messaging app, which has at least 32 million users26 and is widely used by eCommerce sellers to communicate with potential buyers. The platform says 95 percent of its Thai users access partner content. (Line partners include businesses, publishers, and influencers.)

 

Convenient processes

Once Thai users have discovered a product and considered purchasing it, there are a few more factors that come into play before they decide to make a purchase. Some of these may not be entirely in your control.

For example, easy and convenient checkout improves the likelihood of a purchase.5 But if you’re selling on a platform like Lazada or Shopee, it’s not up to you to design the checkout process. On the other hand, if you have a website or app, consider allowing social media log-ins or checking out as a guest instead of requiring users to create an account.

 

Conversational commerce

Thais like to chat with sellers before making a purchase—and this is a huge part of the consumer decision journey that you do have much control over. Shopee, for instance, revealed that 400 million live chat messages27 were exchanged on the platform between buyers and sellers in 2018. Thai shoppers use Facebook Messenger and Line28 to communicate with sellers, not just to ask questions about products and delivery terms, but also to negotiate prices.

That means conversations play a large part in clinching eCommerce sales in Thailand. Your ability to respond promptly, provide detailed information and explanations, address shoppers’ concerns, and negotiate strategically can convince online consumers to buy your product.

Where do Thai consumers shop online in Thailand?

Thai online shoppers buy products from eMarketplaces like Lazada, e-retailers like Central Group’s Looksi (formerly Zalora), brand websites, and social media sites.

 

Leading eCommerce platforms

Among eCommerce platforms in Thailand, Lazada and Shopee dominate. As of April 201929, Lazada had 44.1 million monthly web visits, followed by Shopee with 31.2 million monthly web visits. App Annie’s ranking of eCommerce apps in Thailand30 in terms of monthly active users also places Lazada and Shopee at the top, followed by AliExpress, JD Central, and Amazon.

Thai buyers especially tend to gravitate towards eMarketplaces if a purchase requires more research and product comparison, according to Siam Commercial Bank’s Economic Intelligence Center31 (SCB EIC). Such products include the electronics & computers, home appliances, and furniture & home decoration categories.

eCommerceIQ also found11 that more mobile & electronics purchases take place on Lazada while more fashion & beauty purchases occur on Shopee.

This information should you help you decide where to concentrate your marketing efforts, depending on the items you sell. For example, if you sell high-end electronics, you’d want to invest more time in Lazada. (While Thailand has electronics-focused marketplaces like Advice and Notebook Spec, it’s not clear whether or not they allow cross-border eCommerce.)

 

Social media & messaging platforms

But social media channels play a major role, too.

Among mobile apps, Line has the most number of monthly active users6 in Thailand, followed by Facebook, Facebook Messenger, Instagram, and Lazada. KPlus, a banking app, ranks sixth on the list, while Shopee takes ninth place.

In fact, data from PricewaterhouseCoopers8 shows that 51 per cent of online shoppers in Thailand place orders through social media, compared to the global average of 16 percent. That makes Thailand the world’s most active social commerce market.

Social commerce platforms are also said to have contributed around 40 per cent32 of the total B2C and consumer-to-consumer (C2C) eCommerce transaction values in Thailand in 2017, compared to 35 per cent for eMarketplaces and 25 per cent for e-retail and branded websites.

Analysis by the Boston Consulting Group14 supports these claims. It shows that for most product categories, a large portion of purchases take place on Facebook, Facebook Messenger, and Line.

Image source

Social media is the go-to channel for goods that are “relatively low in price and do not require after-sales service or warranties,” according to SCB EIC.31 These include “inexpensive products that consumers buy on impulse or without much research”, such as health & beauty and clothing & footwear items.

So if you focus on small-ticket, impulse-driven sales, you’d want to establish a strong social media presence.

 

Brand websites

Data shows that when it comes to fashion and gadgets, Thais like to visit brand websites. A search on SimilarWeb for the most visited fashion & apparel websites as of June 2019 yields the following results:

#1 Nike.com

#2: Uniqlo.com

#5: Zara.com

 

For consumer electronics, the top five sites include:

#1: Samsung.com

#2:Apple.com

 

Keep in mind that this only indicates web visits, not purchases. A consumer may do research on a brand website before visiting a physical store or purchasing a similar item on an eMarketplace. On the other hand, they may be buying directly from the site.

When it comes to beauty products, brand websites account for only 14.5 per cent33 of sales. Austrade cites the website of Kiehl’s, a skincare brand, as an example of a popular brand website among Thai consumers.

Kiehl’s Thailand’s brand website

Austrade also notes that Thai consumers set high expectations for brand websites. These include “customer support, multiple payments options, and flexible return policies”.

If you’re planning to launch a brand in the Thai eCommerce market, make sure to include such features on your website. It would be a good idea to study the text, design, features, and services of the brand websites mentioned in this section.

Meet the needs of Thai online shoppers

With this information, you can adjust your eCommerce strategy to suit potential customers’ motivations and habits. Work on implementing these strategies:

  • Make sure your prices are competitive by benchmarking against competitors.
  • Offer enough variety. For 33.9 percent of Generation Y consumers5, not finding their desired product is a major reason for not shopping online.
  • Consider targeting B2B audiences.
  • Provide shoppers with rich content that adequately describes, visualizes, and evaluates your product.
  • Establish a strong presence on social media.
  • Find out what consumers are more likely to purchase in a certain marketplace or online channel, and adapt your selling and marketing strategy accordingly.

Entering a new eCommerce market always requires research into the local context and providing a great shipping experience. By using a data-driven approach, you can improve your chances of clinching sales in the Thai eCommerce market.

 

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References

  1. Statista: eCommerce in Thailand
  2. Datareportal: Digital 2019 Thailand
  3. Bangkok Post: Generation Y Thailand – A New Me Generation?
  4. Netpracharat
  5. Austrade: E-Commerce Guide in Thailand
  6. DataReportal: Digital 2019 Thailand 
  7. IPrice: State of eCommerce in Southeast Asia 2017
  8. PWC: Total Retail Global Report 2016 
  9. Asean Up: Marketing to Generation Y in Thailand
  10. Bangkok Post: Survey – Thais online for over 10 hours every day
  11. EcommerceIQ: Uncovering the Value of Thailand’s Top Online Platform
  12. Central Group Loyalty Card
  13. The Asia Global Payment Summit: Five Consumer Trends to Watch in Thailand
  14. BCG: Five Consumer Trends to Watch in Thailand
  15. YStats: Southeast Asia B2C E-Commerce 2018
  16. SimilarWeb: Top Website Ranking For Fashion Category in Thailand
  17. ETDA: ETDA reveals continuous growth in Thai e-commerce value in 2018, rising to 3.2 trillion baht.
  18. SimilarWeb: Top Website Ranking For All Categories in Thailand
  19. Stat Counter: Search Engine Market Share Thailand
  20. GlobalWebIndex: Ad-Blocking Trends 
  21. Facebook Ads
  22. Google: Your Guide to Google Ads 
  23. Statista: Penetration of Leading Social Networks in Thailand as of 3rd Quarter 2018 
  24. Olapic: Shoppable Content: The New Trend in Content Marketing?
  25. MOZ: Search Engine Optimization
  26. Bangkok Post: Thailand takes No.2 Line Today spot with 32m users
  27. Techsauce: Shopee reveals latest seller insights and reaffirms its commitment to empower more Thai sellers
  28. Pricezagroup: Thailand Social Commerce
  29. IPrice: The Map of E-Commerce in Thailand
  30. App Annie: What You Need to Know About Southeast Asia’s Growing M-Commerce Landscape
  31. SCB Economic Intelligence Centre: Social Commerce – An e-Commerce trend to rival Lazada
  32. Thai Tech: Social commerce rides social media boom in Thailand
  33. EMag: Analyzing Online Purchase Behavior of Thai Consumers for Beauty Products
5426 意見

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