Thailand has one of the biggest eCommerce markets in Southeast Asia, only surpassed by Indonesia. The market will continue to increase over the years as disposable incomes increase and the eCommerce market continues to grow.
Yet, selling in Thailand can be challenging for exporters who are new to the market and primarily sold in Western countries previously.
You must understand local product regulations, what products are in demand, and how you can reach shoppers.
In this article, we cover some of the most important topics for exporters who wish to enter Thailand’s online consumer market.
Topics covered:
- Which products are in demand in Thailand?
- Top E-Commerce Platforms
- Trade Fairs for Exporters
- Shipping & Logistics
Which products are in demand in Thailand?
Exporters should confirm what products that are currently in demand, or what product segments will grow in the coming years. Below you can find product categories that are sold in large numbers on local websites.
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- Selling on Tmall & Lazada
- Logistics & fulfillment options
- Payment gateways
- Incorporation & trademarks
Electronics & Media Products
Electronics and media products have been the most sold products on Lazada in Thailand. Mobile phones like Huawei and iPhones, as well as tablets and laptops, are sold in great numbers.
Besides, media products have also seen a great upswing in recent years.
IT City, JIB, Advice, Power Buy, Banana Store, Munkong Gadget, and HP have seen great growth in the eCommerce market. The market is currently worth around USD 1.2 billion and continues to grow yearly.
Toys, DIY, and hobbies
Toys, DIY, and hobbies are the second-largest product segment in terms of annual sales. Due to the increased demand for online and mobile games, the product category will grow even more.
Well-known foreign brands in the category include Wangdek Toysland Co (Mattel), Sony Thai, and BANDAI NAMCO Group, according to ASEAN Briefing.
Video games belong to this category as well and have become increasingly popular, particularly among young males.
What products will rise in demand?
The fashion and beauty segment is the fastest-growing at the moment. These products are generally easy to transport and sold at higher price points, which is preferable among eCommerce sellers.
This is particularly the case for cross-border eCommerce sales, where product regulations can be stringent if you want to import the products first.
The segment accounts for around 18% of total sales with top brands such as Zalora, Zilingo, Season, Adidas, Uniqlo, Konvy.com, Reebonz, WearYouWant, Topshop, and Kiehl’s.
The food and beverage segment will also grow much in the coming years. As Thai consumers get increased disposable incomes and an appetite for foreign products, foreign sellers can profit from this market.
Top E-Commerce Platforms
Thailand has a population of around 70 million and a growing eCommerce market. As a result, many foreign marketplaces have entered the market in recent years.
In this section, we review some of the most popular eCommerce websites in Thailand.
Lazada
Lazada is the biggest eCommerce marketplace in Southeast Asia and is available in six countries. Owned by Alibaba and started in 2012, Lazada has some of the most developed cross-border eCommerce capabilities.
A benefit of selling on Lazada is that they take care of the fulfillment, shipping, as well as last-mile deliveries. This is realized through their services Fulfillment-By-Lazada (FBL) and Lazada Global Shipping (LGS).
It’s easy to get paid on Lazada by integrating your store with Payoneer or World First.
You can then manage payments directly to your overseas account. Keep in mind that cross-border sellers face product restrictions such as for food, beverages, and supplements.
You should consult with Lazada about what regulations apply for your specific products and whether you can sell them cross-border.
Shopee
Shopee is another major marketplace that was founded in 2015. One of the biggest rivals of Alibaba Group, Tencent Holdings, owns a large share in the company. Shopee received funding through several rounds, including SoftBank, for example.
Shopee is popular among shoppers thanks to its low shipping fees. Sometimes, you can even order products without the need of paying to ship.
Yet the product assortment can sometimes be somewhat limited on Shopee compared to Lazada.
Shopee is available in the whole of Southeast Asia, as well as in Taiwan and Korea. The marketplace will also enter the South American market, starting with Brazil.
Shopee has grand sales goals and to become a major player also outside of Asia.
I suggest you sell on both Shopee and Lazada if you want to maximize sales in Thailand. Truth be told, the fees to set up and run a store are significantly lower compared to selling online in China, for example.
Trade Fairs for Exporters
Before you enter the Thai market, it can be worthwhile visiting local trade fairs to promote your products, network, and learn more about the market.
Thailand doesn’t have as many trade fairs as the likes of Japan and China, but there are a few worth highlighting.
Bellavita
Bellavita is a leading B2B trade show that promotes Italian food and beverages. The event is held in ten cities, including Bangkok, London, Hamburg, Warsaw, Parma, Toronto, Chicago, Mexico City, Riga, and Amsterdam.
In 2019, the fair welcomed more than 400,000 visitors and 1,078 exhibitors. As the fair only focuses on Italian food products, it might not be suitable for all sellers. In addition to the fair, they also have an academy and online marketplace.
If you plan to sell Italian food in Thailand, it can be worthwhile visiting this fair.
Food Ingredients Asia (Fi Asia)
Fi Asia, the ASEAN is one of the leading food & beverage ingredients events in Asia. It’s been organized for ingredient suppliers and buyers together for more than 23 years and is held in September yearly.
Visiting Fi Asia is a truly memorable experience with its specialized zones, innovation zone, conferences, technical seminars, beverage ingredients theater, and much more.
In addition to Thailand, they also host events in China, Japan, India, and Vietnam.
For more information, I recommend you check their website directly. You can also sign up as a visitor or exhibitor there.
Shipping & Logistics
The sales channel used will also determine what shipping options you have available. Logistics costs can differ greatly depending on whether you use a local solution or a cross-border shipping service from Hong Kong, for example.
Lazada, for example, has its sortation center in Hong Kong and manages all deliveries into Southeast Asia from the hub. As a result, shipping costs tend to increase, something that can be disadvantageous to sellers.
Shipping to Thailand
While shipping by sea can take 4-6 weeks from Europe to Asia, under normal circumstances, air freight is considerably faster. Yet it’s also more expensive, a reason why exporters have to stick to sea freight.
A benefit of using Lazada, at least, is that you can opt-in for their fulfillment solution (FBL) as well as shipping services (LGS).
Thanks to this, Lazada can take care of everything from the inbound handling to the storage, pick & pack, and last-mile deliveries to customers in Thailand.
Keep in mind that you’ll pay less for shipping if using LGS compared to local 3PL companies in Hong Kong. The difference can be quite significant.
In addition to lower shipping rates, Lazada will also take care of your returns from clients in Thailand.
Order Fulfillment
If you have a Thai entity and manage to import the products to Thailand, a preferred option is to use a local warehouse. The primary reasons are shorter shipping lead times and reduced logistics costs.
With the rapid increase of the E-Commerce market, local fulfillment solutions have been popping up in great numbers in the past years.
By importing the products into Thailand, you will also be able to sell them offline. Examples include hotels, supermarkets, restaurants, and stores.
Larger companies generally employ this selling tactic, offering products both online and offline to maximize sales and economies of scale.
FAQ
Below we have included some commonly asked questions and our replies. Feel free to write a comment below if there’s anything else you wonder about.
What are the biggest online marketplaces in Thailand?
The most popular marketplaces include Lazada, Shopee, Kaidee, and Amazon. JD Central has also launched a platform in Thailand and has grown at an impressive rate.
Do I have to use labels in the Thai language?
If you import products to Thailand, you must use labels in Thai, as explained in our separate article about entering the Thai market.
Be sure to work with a third party that understands local regulations in-and-out, to help you through the registration process.
How do I get paid as a cross-border seller?
Shopee and Lazada use payment providers like Payoneer and World First. You can easily transfer funds to your overseas account.
Tradekey offers a platform where buyers and sellers connect with each other. I would recommend gaining the opportunity of acquiring the best services provided by Tradekey.