Depa predicts e-commerce to triple to B2.1tn
Thailand Post revs up online delivery efforts
Retail e-commerce value in Thailand is projected to reach 2.1 trillion baht in 2022, three times higher than 2016, thanks to intense competition from big players, the popularity of social commerce and the availability of wireless technology.
Ratthasart Korrasud, senior executive vice-president of the Digital Economy Promotion Agency (Depa), said by 2022, online retail in Thailand will account for 8.2% of the total, up from 3% in 2016.
The global online retail market accounts for 8.2% of the total, while the markets in the US and South Korea are 10% and 17%, respectively.
The overall Thailand e-commerce market in 2016 was valued at 2.5 trillion baht, of which business to consumer (online retail transactions) were value at 729 billion, accounting for 3% of total retail value.
That value is expected to reach 2.1 trillion baht by 2022.
"The estimate is based on a 17% compound growth rate seen in the past several years," said Mr Ratthasart, adding that two thirds of retail e-commerce is generated through cross-border trading.
Negotiations with Chinese e-commerce players to bring Thai products to overseas markets is ongoing.
He said that fashion and cosmetics will grow faster than electronic products, and social commerce will have a 40% share of total e-commerce orders, 60% of which will come from the e-marketplace.
Meanwhile, Depa is collaborating with Thailand Post to help mom and pop shops in rural communities join the e-commerce community.
The duo plan to expand the scheme to 2,000 communities by 2018.
These efforts are in line with the government's Net village project, which now covers 15,000 out of 24,000 villages.
Thailand Post is spending 600 million baht to improve its infrastructure and update its e-commerce delivery mobile app, "Prompt Post", so that it will support e-wallet.
The move is intended to increase Thailand Post's market share in courier express parcels (CEPs) from 55% in 2016 to 60% next year.
Phitsanu Wanitchaphol, senior executive vice president for business development at Thailand Post, said the growing e-commerce market has driven the express parcel service market to grow at least 18% to 27 billion baht.
Over the past five years, the popularity of e-commerce has created new players in the CEP service industry, eroding Thailand Post's market share.
Therefore, some 600 million baht of the state enterprise's 8 billion budget for the five-year Thailand 4.0 roadmap plan will be allocated for e-commerce, including an e-commerce distribution hub which will cover four locations in Bangkok.
In October, it will launch a new version of the Prompt Post mobile app, which online merchants can use to deliver parcels. Standard package boxes with flat rate delivery is now available to better facilitate e-commerce.
The new version of the app will be upgraded to support e-wallet capabilities, including payment gateway. Online merchants need to register and link their bank accounts with Thailand Post e-wallet. Thailand Post e-wallet will serve as an Escrow account for buyers to render payments, which will be transferred to the merchants' bank accounts once the transactions are completed.
Thailand Post aims to increase the number of Prompt Post merchant users from 2,000 to 10,000 next year. Online merchants who have over 50 parcels will be entitled to free pick up at their locations.
Thailand Post also plans to have an e-directory to gather local products in villages and help sell them online.
The enterprise initially aims to bring on 10,000 merchants.