Even though Thai exports have successfully maintained their global market share, in the long run, it is crucial for local exporters to adapt and produce goods based on the fast-changing behaviour of consumers, the Export-Import Bank of Thailand (Exim Bank) says.
The adjustment is necessary to keep up with fiercer competition and economic changes, the Exim Bank warned in its latest report. Exporters, it added, should pay attention to research and development and employ new technology, the Internet of Things in particular, to improve production efficiency and prepare for the Thailand 4.0 era.
Outbound shipments have struggled with growth contractions for three years running and the gloomy picture continues with July's exports falling by 6.4% year-on-year.
However, Thailand's exports fell at a slower clip than those of most of its rivals. In Asia, the country's shipments underperformed only Vietnam and Japan.
The report said the export ratio of foreign companies in Vietnam surged to 70% of the country's total outbound shipment value from 40% in the past five years, while Japan is not considered Thailand's competitor as it exports high-technology products.
Despite the slump in exports, Thailand managed to keep its market share over the past five years, while several countries including Singapore, Malaysia, Indonesia and India saw a declining market share, the report said.
The better diversification of export destinations than rivals helped Thailand keep its market share. For instance, Thailand's exports to the G3 (the US, the European Union and Japan) plus China account for 40% of total export value, compared with Taiwan and South Korea at more than 50%.
China's export ratio to G3 plus Hong Kong represents as much as 55%.
Moreover, product diversification helped Thailand gain an edge over competitors, the report said.
According to the Harmonised System, the top three export products from Thailand represent a combined 16% of total export value, well below Indonesia's 28%, Malaysia's 32% and Singapore's 45%.
Agricultural products and food, representing 10% of Thailand's total export value, are another shield for the country against global trade volatility.