We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Read more about cookies

an image
  • Register
  • Log in
  • Language

Dynamic retail market driven by increasing middle-class and tourism spending

The retail market is one of the most dynamic in the Thai economy and valued at around 120 billion USD 2015, coming second in Southeast Asia after Indonesia.

The large market and strong growth is driven both by increasing income levels of 65 million Thai consumers, but also from 30 million tourist annually which see Bangkok and Thailand as a major shopping destination.  Despite a general slowdown in the Thai economy in recent years, the retail sector has remained its momentum with many foreign brands entering the market to offer high-quality lifestyle products to increasingly affluent Thai consumers. 

Digitalization and E-commerce is changing the retail market landscape, but Thailand remains a department store consumer market

Except for the grocery segment where traditional channels are still strong, the Thai retail market is dominated by modern retail channels such as supermarkets and department stores. Department store companies’ revenue has increased from 5.3 billion USD in 2012 to 11.5 billion USD in 2014 and occupancy rate of shopping space in Bangkok in 2015 is 93% out of 7.1 million sq. m. Central group and the Mall group are the two biggest players with around 40% of total market share.

The e-commerce sector in Thailand is still in developing stage but expected to grow fast due to government initiatives within digitalization and e-commerce. Lazada, Kaidee and Pantip market are enjoying around 40% of the e-commerce market, but there are around 10 main platforms in total competing for online consumers’ money.

Swedish companies should target the Thai middle-class desiring foreign products with high quality and modern design

Fashion goods such as apparel, shoes and accessories are considered to have strong potential for Swedish companies on the Thai market. Mid-range products and luxury designer wear are experiencing 6-10% annual growth in Thailand and despite strong competition, there is a increasing number of new market entrants.

Despite the fact that e-commerce only represents a small share of total sales within fashion goods, Thai consumers are truly digital and it is estimated that almost half of Thai consumers have the internet as the main tool when making a purchasing decision. Social media plays an important role in reaching out to new customers and it will be key for Swedish companies entering the market to have strong online presence.

Foreign market entrants should however be prepared to invest and prepare properly in order to capture the opportunities on the Thai retail market. Businesses should spend enough time to understand the Thai consumers and retail market and create a strategy adapted to the local market characteristics. Moreover, choosing a right partner could be crucial for foreign companies and many brands choose to cooperate closely with distributors that have the right channels and market understanding.

Taking this into consideration, Business Sweden considers the Thai retail market to be attractive for Swedish companies looking into expanding in Southeast Asia. 

an image

Vivianne Gillman

Director of Business Development, New York Director of Business Development, New York
+ 1 212 507 9003