The continued dominance of Thailand's e-commerce ecosystem by foreign operators, the proliferation of live commerce and affiliated marketing are likely trends for 2024, according to an e-commerce executive.
E-commerce and on-demand services will still be dominated by overseas operators in terms of sales, delivery and advertising, as the country faces a digital trade deficit, Pawoot Pongvitayapanu, founder of Tarad.com, told the Bangkok Post.
Thailand's e-commerce market is expected to reach nearly 700 billion baht in 2024, up from an anticipated 634 billion in 2023, thanks to more online shoppers and higher spending per head.
So far this year there were 41.5 million shoppers with average spending of 8,840 baht, up from 30.2 million shoppers with average spending of 2,970 baht in 2019.
The intensifying competition among e-commerce players is expected to continue in 2024, he said.
According to Creden Data, Lazada Group's profit in 2022 was 3.2 billion baht from revenue of 38 billion baht, while Sea Group, which includes Shopee, posted revenue of 55.6 billion baht with a profit of 2.5 billion.
This reflects the leverage of their ecosystems, said Mr Pawoot.
Another trend is intense competition in the delivery sector, which will cause losses for most players, he said.
In 2022, out of nine operators for which Creden gathered data, only three -- Shopee Express, Lazada Express and J&T -- posted a profit.
Mr Pawoot said Lazada Express and Shopee Express were profitable because they have their own parcel and delivery services on their e-marketplace platforms.
He also predicts a live commerce war led by TikTok, with Shopee and Lazada joining the fray.
Thailand has the highest live commerce growth in Asean, according to a 2022 report by Meta and Bain & Company. Live commerce in Thailand grew by 10% compared with 8% average growth in the rest of Southeast Asia.
Live commerce has been influenced by TikTok, which has 41 million users, ranking eighth globally.
According to Insider Intelligence/eMarketer, China and the US combined account for 70% of global retail e-commerce revenue, while 20% of online sales in China is via a live channel.
Another trend is KOL commerce, in which key opinion leaders or influencers can help to stimulate sales. Some KOLs can help boost sales to millions of baht in a single live-stream.
Affiliate commerce is an online marketing strategy that allows content creators to promote products to gain a commission fee if viewers click or purchase such products via the sellers' links.
"This allows other users to help online merchants sell their products," said Mr Pawoot.
He said Chinese products will continue to flood Thailand, but the volume of illegal products from the mainland will decline.
Chinese players have established warehouses in suburban areas and provide wholesale delivery services between China and Thailand for faster delivery.
Mr Pawoot and other industry players recently created a live commerce strategy to help local producers to increase exports to China.
Another trend is the rise of e-commerce automation and artificial intelligence. Businesses including online sellers will shift to using more automation in their operations, he said.
Customer data platform commerce is when sellers utilise a platform that can manage multiple sources of data to understand customers and create personalised marketing campaigns for them.
Next year revenue should grow for on-demand commerce, said Mr Pawoot. This segment is mostly dominated by super-apps and most players posted a loss in 2022. Only Grab generated a profit in the first year.
According to Creden Data, on-demand commerce revenue in 2022 exceeded 37 billion baht.