E-commerce projected to grow by up to 13% this year
Market value set to hit 870 billion baht
published : 24 Jan 2023 at 05:51
newspaper section: Business
writer: Suchit Leesa-nguansuk
Thailand's e-commerce market value is expected to grow by 8-13% this year, with live commerce and cross-border e-commerce predicted to gain significant traction, says sector pundit Thanawat Malabuppha.
The honorary president of the Thai E-Commerce Association indicated that the value of the e-commerce market in the country stood at 770 billion baht in 2022, up 8% year-on-year. It is expected to reach 870 billion baht this year.
The value is forecast to surge to 1.12 trillion baht in 2025, he said.
Mr Thanawat, who is also chief executive and co-founder of Priceza Group, a shopping search engine and comparison tool, indicated that the growth rates in 2022 and 2023 were set to be much slower than they were in 2020 and 2021, when they hit 140% and 75%, respectively.
The slower growth is attributed to rising inflation that has hindered people's spending, while people now spend more time outside.
"Unlike the exponential growth during the pandemic, the growth has come down to a regular pace like in other countries in the region," said Mr Thanawat.
At a global level, the value of the e-commerce market in 2022 shrank 2.5% year-on-year, representing the first-ever decline.
Mr Thanawat said that Asean e-marketplaces had 51% of the e-commerce market value in 2022, up from 32% a year before.
E-marketplaces have proven themselves to be indispensable platforms for all stakeholders, including brands, sellers and consumers, he said. Although some platforms have increased commission fees and reduced discount promotions, sales volumes on these platforms remain strong.
The major e-marketplaces are likely to focus more on profitability in 2023 following years of losses, Mr Thanawat said.
Mr Thanawat also highlighted the rise of cross-border e-commerce.
In December last year, a free-trade-zone project in the Eastern Economic Corridor, handled by Chinese e-commerce giant Alibaba Group Holdings, started a trial operation.
It has a hub that supports the distribution of Chinese products to Thailand and the grouping defined as CLMV (Cambodia, Laos, Myanmar and Vietnam), reducing delivery times from 10 days to only three.
"This will benefit Chinese manufacturers and sellers who run shops on Lazada, Shopee and other platforms, such as TikTok," he said.
According to Mr Thanawat, live commerce would be a key driver of social commerce that continues to grow in Thailand.
The value of the social commerce market was 200 billion baht in 2022, representing 26% of the total e-commerce market.
Live shopping contributed 38% of the social commerce market value.
"2023 will be a golden year for live shopping as TikTok ignited the segment last year," said Mr Thanawat.
He said brands will work with creators or media agencies to partner with influencers on a commission fee-sharing model. This differs from previous years when influencers were hired to review products job by job.
"Influencers will change their role from a reviewer to become a partner," Mr Thanawat said, adding that Priceza would launch an influencer marketplace to capitalise on this.
Additionally, quick commerce, such as grocery deliveries, is expected to grow further this year.
Valued at 85 billion baht, quick commerce had 11% of the e-commerce market last year.
Mr Thanawat said that if Line Man Wongnai succeeds in acquiring Foodpanda, it would become a significant player and almost on a par with Grab.
According to Mr Thanawat, shopping malls and retail stores will this year focus more on their own websites and apps for omnichannel marketing, with the aim of building their customer bases and relying less on e-marketplaces.