Thailand's e-commerce market is expected to grow by 12.4% to 2.52 trillion baht this year, propelled by high-speed wireless networks and digital-driven development schemes.
According to a report by the Electronic Transactions Development Agency (ETDA), business-to-consumer (B2C) e-commerce can expect to see the highest growth with 43% followed by business-to-business (B2B) at 3.5% and business-to-government (B2G) with 3.2%.
The local e-commerce market was valued at 2.24 trillion baht in 2015, an increase of 10% from the previous year.
Up to 1.33 trillion baht came from B2B e-commerce turnover, 510 billion from B2C and the remaining 400 billion baht from B2G.
"Thailand's B2C e-commerce market was the largest in Asean in 2015 in a market worth approximately US$15.6 billion, ahead of Malaysia with $11.9 billion," said ETDA chief executive Surangkana Wayuparb.
She said the average per capita expenditure for online shopping in Thailand for 2015 was $230, compared with $392 in Malaysia and $648 in Singapore.
To strengthen the local e-commerce market, Mrs Surangkana said ETDA is in talks with the Revenue Department to grant tax reductions for small and medium-sized companies with annual revenues of 3-5 million baht.
"We are considering imposing a flat rate tax of 10,000 baht per year for these e-commerce companies," she said.
She said the government is asking for greater cooperation from state telecom enterprises and logistics service providers to reduce their service rates of broadband internet connection, as well as transportation and distribution services for local e-commerce firms to enhance their competitiveness.
The ETDA is study the possibility of providing funding from the state in order to enhance the capability of local operators to compete with foreign e-commerce giants who are dominating the Thai e-commerce market.
"Sources of funding might come from the Digital Economy and Society Development Fund," Mrs Surangkana said, adding that this would require legal interpretation.
Pawoot Pongvitayapanu, president of the Thai E-commerce Association, urged the government to appoint a single state authority to be responsible for the e-commerce industry, instead of involving multiple agencies.
Formulating a national e-commerce roadmap is a critical step the government should quickly implement in order to build a sustainable e-commerce industry.
"It's time for the Thai government to seriously support local small and medium-sized e-commerce companies to ensure that they can fight with foreign e-commerce giants who have healthier finances and stronger technological know-how," Mr Pawoot said.