Features Thailand Retail

Thailand e-commerce to hit $49 billion as coronavirus fears fuel online shopping

27, Mar. 2020

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By Valaiporn Chalermlapvoraboon

BANGKOK, NNA – E-commerce in Thailand, which enjoyed 8-10 percent growth in recent years, has been given tremendous attention as coronavirus fears drive more people to shop online after the first case of infection was detected in the kingdom in January.

Online sales are expected to hit $49 billion in 2020, up from $33 billion in 2017, according to estimates by the Electronic Transactions Development Agency (ETDA). Helping to drive up the figures is the coronavirus shopping frenzy.

As uncertainty over the deadly Covid-19 virus continued to grow with the discovery of more infection clusters, consumers have become wary about shopping in public places and used online shopping to get necessities instead.

In February, major e-commerce sites in Thailand flourished with much activity. B2B, which is run by Lazada Group, the local arm of China-based Alibaba Group, garnered more than 10.2 million page visits, while Singapore-based Shopee recorded 1 million visits, according to website analytics service SimilarWeb.

Lazada sales jumped 20 percent in early March from the second week of January when the first coronavirus infection was detected in Thailand, Jack Zhang, Deputy CEO of Lazada Thailand told NNA.

Personal care items saw a 30 percent increase as of Mar 19 over early-January figures, he said. The top five best-sellers were air purifiers, digital infrared thermometers and hand sanitizer gels.

Face masks, food items and sanitary gloves were also eagerly snapped up online, but sales of luxury goods, furniture and electronics were slow.

On Thursday, Thailand announced its highest daily record of 91 new Covid-19 cases, taking the total up to 1,136.

The quick spread of the outbreak in recent weeks has forced Thailand prime minister to invoke an emergency decree on Thursday to shut schools, universities, stadiums, cinemas, bars, gyms and spas for two weeks in Bangkok and its outskirts. Foreigners have also been barred from entering the kingdom.

Meanwhile, e-commerce rivals have already been trying to outdo one another in campaigns to lure shoppers affected by shutdowns and cancellations of big events. The annual tradition of celebrating Songkran or the Thai New Year outdoors at mass events has been cancelled.

Thailand’s biggest e-commerce player, Lazada Group, will run 26 national and regional sales campaigns from March till December in conjunction with its eighth anniversary in the country, said Suthida Rodsaward, its vice president of campaign.

Such promotions can push Lazada’s sales by as high as 13 times more. The good response has also encouraged online sellers to participate, said Suthida.

In 2018, Lazada Group sales in Thailand rose to $244 million, from $123 billion in 2016. Lazada will continue to invest in e-commerce infrastructure and support brands and sellers to maintain their business during the coronavirus crisis, said Zhang.

Earlier this month, other sites such as Shopee and Central Online Shop held fashion sales with enticements such as free shipping, 1-for-1 coupons and discounts. Suthida noted that 64 percent of online shoppers are more likely to spend on sites offering free shipping.

This month, the Lazada Group also offered 888-baht ($27.4) discounts, while Shopee gave free shipping coupons.

In February, Line’s B2B food-delivery service, Line Man, offered 50 percent and 10 baht discounts for orders. The South Korean company also rolled out its newest tool “MyShop” in February to support its new e-commerce platform Line Shopping.

Photo by Yavor Punchev on Unsplash
Photo by Yavor Punchev on Unsplash

As consumers shift spending to online, retail businesses are expected to suffer a whopping $2 billion loss in the first quarter of 2020, according to the Thailand Retailers Association (TRA).

Bangkok resident, Philip Reiter, 22, who used to visit a nearby mall three times a month, now goes there only once.

Philip, an avid online shopper, said, “I try to avoid traffic as much as possible so I order things to my place.” He was happy to pick up bargains as there were "so many applications providing discounts and sales."

Another Thai consumer, Alexander Jam, 22, who considers himself a frequent shopper, now hardly goes to a mall after hearing that "Covid-19 can easily spread in crowded areas."

Also avoiding congested places is Kanokporn C., 28, an entrepreneur, who said, “The only time I will visit a supermarket is for an emergency to store consumable goods if the outbreak spreads.”

Apart from the impact on domestic retail market, the coronavirus contagion has also hammered Thailand tourism sectors such as hotels, airlines and transportation as well as exports.

Following lockdowns in China which curbed travel, Thailand tourism numbers are expected to plummet to an estimated 30 million this year, down from the 39 million visitors the country received in 2019.

Tourism losses could amount to $8 billion this year, as the initial projected growth in earnings of 2.8 percent had been revised to 1.3 percent. Flight bookings for the period of April to May plunged 40 percent while hotel occupancy fell 11.8 percent, according to the Tourism Authority of Thailand.

Meanwhile, the Ministry of Agriculture and Cooperatives have been encouraging producers to sell Thai fruits online to attract more foreign buyers, such as those from China.

In fact, popular Thai durians, mangosteens, rambutans and longans, whether fresh, chilled, frozen or in dried form have seen robust online sales, soaring over 100 percent year on year.