17 Aug 2020
Posted in Banking
E-commerce emerges as mainstream payment in Thailand amid COVID-19 crisis, finds GlobalData
E-commerce has been on a sustained growth for the last few years in Thailand. While Thailand is among the few countries globally that has been successful in combating COVID-19, the lockdown measures such as restricting the opening of businesses and retail stores have fast-tracked e-commerce growth, according to GlobalData, a leading data and analytics company.
An analysis of GlobalData’s E-Commerce Analytics reveals that the e-commerce market in Thailand is well-developed, registering a compound annual growth rate (CAGR) of 12.2% between 2016 and 2020 to reach THB1.1 trillion in 2020. A large young population, rise in Internet and smartphone penetration, coupled with growing consumer confidence in online payments are attributed to the growth.
The ongoing COVID-19 outbreak is turning online shopping into a new normal in Thailand. The value of e-commerce transactions is expected to grow at 14.8% in 2020, the highest since 2017. Fears over contracting COVID-19 and the subsequent social distancing measures taken by government are expected to contribute to the uptick in online shopping.
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “The COVID-19 pandemic had a major impact on the Thailand economy. While it has resulted in a decline in consumer spending, on other hand, it has paved the way for e-commerce growth sharply. Thai consumers’ familiarity and comfort in using digital payments enabled a smooth shift from offline to online channel.”
The pandemic has also resulted in a rise in the adoption of e-commerce by retailers. E-commerce company Lazada, which hosts roughly 200,000 merchants on its platform, added 26,000 new merchants in March 2020 alone. To promote e-commerce, Thailand is taking steps to bring offline local merchants to the online channel. In May 2020, Thailand’s Commerce Ministry collaborated with online platforms including Thailandpostmart, Lazada, JD Central and Cloudmall to enable farmers to sell fruit online.
Mr Sharma concludes: “COVID-19 has forced consumers to shop online like never before. In fact, during the pandemic online shopping was no longer alternative channel, but a means of survival. Meanwhile, the benefits associated with online shopping such as easy and convenience will position e-commerce as a preferred mode for purchases in the future.”