Thailand e-commerce continues to grow at a fast pace

Bangkok Condo Finder on November 30th, 2015 with

eCommerce in thailand 2015

It doesn’t take a genius to work out that the average Thai employer and employee in Bangkok is all-but addicted to their smartphone. Equally, it should come as no surprise that arising out of that smartphone compulsion the local e-commerce market just continues to grow and grow.

According to the latest available statistics supplied by the Electronic Transactions Development Agency (ETDA) (www.etda.or.th) is set grow by 3.65 percent this year over what were very strong figures last year. In 2014 around 2.03 trillion baht in business accrued to e-commerce sites and this year the expectation is that this will rise to 2.1 trillion baht this year.

According to ETDA, accommodation and food services top the monetary list for e-commerce, bringing in 658.9 billion baht in revenue. This drops to manufacturing which is worth 350.29 billion baht and retail and wholesale at 325.08 billion baht.

The latter category is the one which is likely to see much greater growth in coming years, especially as more and more people become comfortable and confident with online shopping and as the 4G roll-out further improves and expands the telecommunications marketplace.

In early November, the Ascend Group announced it was planning to invest 5.3 billion baht to expand its e-commerce businesses, which consist of TrueMart and weloveshopping into the broader Asaen marketplace.

Ascend Group said it plans to invest in warehouses, logistics and marketing activities in the Philippines in the last couple of months of this year and then branch out into Cambodia, Indonesia, Malaysia, Myanmar, Singapore and Vietnam during 2016. The company has a goal of being the market leader by 2018 in Asean.

Euromonitor International (www.euromonitor.com) recently issued a report which suggested the business-to-consumer e-commerce market for retail in Asean will likely jump by as much as 20 percent in the next two years to be worth the equivalent of US$7 billion.

Given that Thailand is the second-largest economy in the Asean region, it is almost certain that many brands looking to gain a greater percentage of market share in the region should be looking at putting their products onto the best e-commerce sites currently online in Thailand.

So what are the best sites for e-commerce in Thailand as we reach the end of 2015?

It will probably come as no shock that Lazada stands head and shoulders above its local rivals, at least in terms of page visits (as recorded in January 2015). [1]

The stats show Lazada with a whopping 20.1 million page visits. In second place, with 6.2 million page visits is Weloveshopping while Tarad, at 3.9 million page visits rounds out the top three e-commerce websites.

The numbers then fall away quite sharply: Zalora is fourth with 2.3 million visits; Ensago fifth at 1.6 million, Cdiscount and J.I.B are equal sixth with 1.2 million page visits each, Central.co.th is eighth (790,000), TrueMart (780,000) is ninth and Munkong Gadget with 680,000 page visits ranks tenth.

The figures were measured by the SimilarWeb website and did not include service sites, communities, classifieds, or forums.

While the page visit stats are hardly an infallible sense of the success, or otherwise, of an e-commerce website, they do give a strong indication of what it takes to reach a strong position in the Thailand marketplace.

Lazada has a massive amount of funding behind it and, according to recent figures, has over US$685 million in raised capital. Zalora has around US$238 million in raised capital supporting its operations. [2]

Tarad is the oldest e-commerce site, having been up and running for 13 years now while Weloveshopping has been online for nine years. That time in the market has given both Tarad and Weloveshopping a ground floor advantage, especially as Thai consumers tend to stick with what they know and understand, and as long as the companies deliver the stock and services at levels they expect, then the consumer will be less likely to look elsewhere for a product, at least in the first instance.

As well as time in the marketplace, Weloveshopping has the backing of True Corporation, giving it great depth in terms of market accessibility and financial resources.

Of the others, Cdiscount is owned by Cnova, a global e-commerce leader with more than 13.6 million active users worldwide and Central.co.th is part of Central Group, owned by the richest family in Thailand, so both have the potential to grow quickly with the support behind them.

Seven of the top 10 online retailers have diversified markets, selling almost anything and everything a consumer might want or need. The exceptions are Zalora, which operates in the fashion space; J.I.B. which deals in electronics, and Munkong Gadget which sells headphones.

While page visits are a good indicator of the popularity of a site, data on revenue is not easily available. Nonetheless, simply based on the huge numbers it would be logical to draw the conclusion the top few sites are doing well enough at converting visits to sales.

‘In the evolving age of marketing and advertising brands would do well to gain a presence on these increasingly popular platforms. Look at Alibabas Tmall for example. Luxury brand Burberry recently opened up their flagship store on Tmall knowing their sales wouldn’t be optimal because most savvy Chinese consumers buy their luxury products in Europe or US where it’s much cheaper. They weren’t making a sales play.

This was a branding strategy due to the massive amount of traffic that Tmall secures.’[3]

As the Southeast Asian market continues to evolve, e-commerce is playing a bigger and bigger role, and all major companies need to be seen on the biggest and most popular sites in order to keep their standing high and competitors at bay.

Keep following our blog for all the latest news in the real estate market.

 

[1] http://www.acommerce.asia accessed 24/11/15

[2] Playa del Carmen Real Estate

[3] ibid.

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