Experiences on e-commerce and retail in Thailand
Thailand (and especially Bangkok), a great place to be with lots of retail inspiration
I am now in Thailand, a great place to visit! Bangkok is one of my
favorite cities, I have been here many times and I always like to be back here.
Retail and commerce abroad
I love all the differences in retail and e-commerce between countries and continents. I read a lot about it, and I also try to experience them when visiting.
During this visit to Bangkok, I decided to take some pictures and shoot some videos on Thai retail and e-commerce.
Bangkok is a very inspiring city, not only for holidays, but also from a retail perspective. There are lots of unique retail concepts in the city.
I skipped most of the usual night markets and focused on other retail, like e-commerce and shopping malls.
If you don't like a long read, check out the video below. This blog goes more in-depth, but the video gives a quick overview.
Thailand's retail
Thailand has a population of around 70 million people. The total retail growth annually is now set to somewhere between 6 and 10%, depending on which research you read. Around 50 million people are active online.
Before COVID, Thailand received about 40 million tourists annually, bringing $56.78 billion with them. So it is easy to conclude that tourism is very important for Thailand.
Shopping malls
Iconsiam - the new star in town -
I want to highlight one of the most iconic (luxury) malls I have ever seen: Iconsiam. It is a new shopping mall right next to the Chao Phraya river, and it has won several retail prizes in the past few years.
Getting there is already an experience in itself. The brand new “golden line” sky train arrives just in front of the building and on the other side of the mall there are free shuttle boats that take you back to another BTS skytrain station over water.
The construction of the Iconsiam complex cost a massive 1.65 billion USD! The mall has over 7,000 brands and also a Takashimaya department store.
Inside at the lower floors, there is an extremely huge food court, partly based on a floating market. Impressive and a huge people magnet.
Maybe a shopping mall is not the right name for this iconic building; it is more of a destination, an entertainment complex.
What I didn’t really understand in a 1.65 billion dollar shopping mall is that there are “poles” where you can “call” staff. I tried it, but due to all the surrounding sounds, you can hardly hear the staff.
Nowadays, this can be very well done by a QR code with a chat option (redirected to different chat clients), in my opinion. It is much more convenient and leads to more direct sales.
The "talking pole" that should have been identified as just a "qr code pole", connected to messaging apps
Just a small travel tip:
When you travel back to the skytrain by boat from Iconsiam, there is a great (cheap) bar next to the Sheraton hotel approximately 300 metres from where the boat docks, where you have great views over the river and Iconsiam. The place is called ‘Jack’s Bar’. It looks cheapish, but the food is good, and the beers are cold. Enjoy it while it lasts.
Terminal 21
Terminal 21 is also worth mentioning. It is a shopping mall with travel themes in Bangkok, located next to Asok station. Each floor represents a country. I really like the interior of this mall and there is almost always something to do at the lower floors. A market, a performance, an exhibition.
Also, they are one of the few shopping malls I have visited that have "express escalators". Escalators that skip a few floors, bringing you to your destinations faster.
It seemed to me that at least some of the shops on each floor are related to the country it represents, but I am not sure if that is a coincidence. I tend to always visit Japanese brands and I found a few, all located at the Japanese level.
Terminal 21, has 4 branches in Thailand, but this branch in Asoke, Bangkok was the first one to open in Thailand in 2011. This mall, like many others in Thailand, has a huge and cheap food court. This food court however combines good quality, with plenty of places to sit at a very central location. This shopping mall is directly accessible via subway and sky train and efficient skywalks.
What I also like in this mall, is that there are lots of small local shops. I have bought several t-shirts with unique designs for example, but also bags, and other locally produced articles are available. They made special corners for those small stores and brands just a few steps away from the large well known retailers.
A travel tip: they have Japanese-style automatic toilets 🙃 - maybe the best (and cleanest) free toilets in the whole city of Bangkok.
Thailand = Shopping malls = Entertainment
What I noticed also, is that there is often both a digital and physical component in Bangkok retail. It is possible to (in Bangkok at least) get your products delivered from stores often the same day.
Siam Square often has interactive components during shopping and they are now planning a huge 3 million Baht investment in bridging between digital and physical. Something to keep an eye at.
Customer convenience tip:
While walking in a shopping mall, I stumbled upon this "bell sign'. Not only it looks cute, but I found it also very convenient.
Just press the button and someone comes to help you.
No need to walk half a store to find someone to ask your question. It results in happier customers and faster purchases.
Community malls
Bangkok is known for it's huge malls, but did you know there is also a trend in smaller, local shopping malls and they are actually very nice to visit?
They are called "community malls" Bangkok has a lot of them, and they usually look quite nice.
These malls are a combination of shopping, living, services and some common public -usually green- spaces. They serve the local community.
To experience it, I went to a community mall called "The Commons" in Bangkok. Their tagline is even: first a community, then a mall.
I made this picture when I arrived, looks cute, doesn't it? Its in a quiet side soi (street).
The commons community mall in Bangkok, outside view.
I like the concept. Inside there are large (green) open spaces where you can sit, plug in your laptop, and do some work. You don’t have to buy anything if you don’t want. Or if you just want to charge your phone, that's also possible.
There are often workshops and even a kindergarten. Sure, you also find shops and restaurants, but the common spaces are in the center of this mall. To me, it seemed to be a very relaxed atmosphere and I can imagine it is popular to chill in malls like these, especially on hot days.
I have read reports that outside of Bangkok, many of these community malls also failed, but in Bangkok they are quite popular.
Check the video for an inside impression. I visited this mall during songkran (holiday time) so it wasn't very busy at the time of recording the video, still it gives a good impression on how it looks like.
Japanese brands
Don Don Donki
It's a discount store with a very, I repeat, very attractive company song.
Listen for yourself. Just a warning, the song sticks in your head for a long time after watching this video.
A Don Don Donki store walkthrough
Vending machines
The country I visited with the most vending machines, literally on every corner, is Japan. The country I visited with the most digitized vending machines is China, but Thailand is really catching up with maybe the most impressive vending machine I have ever seen.
The TAO BIN vending machine. This machine really made an impression on me, such an impression that I made a video of it:
The TaoBin vending machine is really awesome. Everywhere in Thailand, so convenient!
E-commerce in Thailand
E-commerce is soaring up again in Thailand, with a 13% increase to 870 million Thai Bath, according to the Thai E-Commerce Association.
Asean e-marketplaces had 51% of the e-commerce market value in 2022, up from 32% a year before, so also here in Thailand, marketplaces are very popular and easy to use.
According to SEMRUSH the most popular websites in Thailand are:
- Youtube
- Lazada (marketplace)
- Pantip (discussion platform)
- Asurascans.com (comic/manga)
But do check the link, as the semrush overview gets updated regularly.
In terms of e-shopping the list is a little different:
- lazada.co.th (the Asian marketplace)
- shopee.co.th (the Singaporean shopping platform)
- mangakakalot.com (manga comic portal)
- aliexpress.com (the well known Chinese marketplace)
- samsung.com (no need to explain)
- kaidee.com ( real estate, auto, and marketplace platform)
I tested by ordering some products on Lazada. You clearly see some differences in UX between Western online shopping platforms and Thai Lazada.
What is very convenient is that some sellers in the Bangkok area offer same-day delivery.
COD (pay on arrival) was the payment method I used for one order, and for the other one I used Visa. Both orders arrived within the promised time frame.
During my travels, I tried to contact a local marketplace expert, but could not find one that responded swiftly. So I started to do some reading. Here is an interview on Lazada's plans for Thailand in the near future, that has some interesting takeaways: At Lazada it is or will be possible to become a member of a seller, just like in an offline store. Also, Lazada is going to focus more on digitizing small businesses which I think is very positive.
Hofstede cultural index Thailand
The hofstede cultural index for Thailand shows the following table
I guess in most of the Thailand index, I can confirm that it is correct. At least for what I saw here in ads, apps, and websites. I guess in most of the Thailand index, I can confirm that it is correct. At least for what I saw here in ads, apps, and websites.
- The slightly higher uncertainty avoidance score can be seen in web design (f.e. lazada, where on the product page, the delivery and payment information is very prominent, including often with direct chat).
- Thailand's scores are quite high on power distance, which results in providing as much information upfront as possible. This I recognize also often in browsing Thai sites.
- The power distance is not so high as in other Asian countries, so you will not be bombarded by all kinds of logos and trust marks for example as often is the case in other Asian countries.
- Thailand scores relatively low on long-term orientation, meaning they live more for the moment (than for example Chinese) and therefore they want to see a return, an investment as soon as possible. Maybe you can see this in the property market(s). Removing traditional areas and replacing it with condos and shopping malls happens a lot here.
- Thailand also scores high on collectivism. No wonder a commercial like this one has received more than 112 million views on Youtube:
Commercials/advertising
There is lot's of outdoor advertising in Thailand, often also in digital form although I didn't see any 3D outdoor billboards yet.
Thai commercials are known in Asia for their emotional component as in the commercial I embedded above. There are more details in this article,
The Thai commercial below is a series of commercials where humor is important. I love the acting in these commercials🤣.
If you go try to sell your products and services in Thailand it seems you can create rather long commercials, and to embed a strong emotional component might help as well.
To get some clicks, I also made a picture of a Thai advertisement with a cat, every skytrain station I used had an advertisement of this bank with a cat on a girl's head. ☺️
Payment methods
Unfortunately, the Thai have forbidden bitcoin and crypto payments for goods and services.
It is legal to use Bitcoin or any other digital currency as a store of value, but it is not legal to do payments for goods and services.
In my opinion not a good way forward especially as Thailand has lots of opportunities in cross-border commerce.
Despite that, recent articles are mentioning that Bangkok now is among the 10th largest crypto hubs and Thailand has taken steps to boost the digital competitiveness by for example making ICO"s tax-free.
Payment methods frequently used are:
- Cash is (luckily) still very popular here. As a tourist, I can and often need to pay in cash, although I have been bumping into a mall where there were only digital payments possible. But it was just in one tiny mall (I visited many)
- As in other Asian countries, paying at a convenience store (and they are everywhere in Thailand) is also popular. People can buy something online, and do a cash payment in a convenience store, afterward, the product is shipped when the payment is made at the convenience store.
- MasterCard and Visa can be used in most hotels and shopping malls. In online shopping, credit cards are one of the most popular payment methods.
- Digital payment methods like Line Pay and Grab Pay are increasingly popular. I wanted to try LinePay but could not connect to my bank as I had previously connected it with another Thai Phone number. It was too much hassle to change. (not so user-friendly).
- Thai often use Line as a messaging tool or food ordering app. Line payments are integrated into this app.
- Prompt Pay and TruePay are also popular digital payment methods in Thailand. Especially I noticed a lot of street vendors that are using the Prompt Pay system. PromptPay is a QR code-based system from the Bank of Thailand.
TruePay or TrueMoney wallet is a mobile wallet that seems less popular from my perspective and is mostly available at 7/11 stores as the payment method is connected to the owner of 7/11 group: CP.
It seems this payment method is more pushed to users, rather than earning it's share by creating a perfect user experience:
Time for a TrueMoney payment laugh
Some payment methods have poor interfaces, especially if they're combined with a loyalty program. 😉
Had to laugh when I read this tweet as it is very recognizable.
In the case of the tweet above, it wasn't PromptPay that caused the issue, but TrueMoney wallet i.c.w. 7/11's loyalty programme.
So a reminder for all product owners to do real life testing 😉
Crossborder payments Thailand
Thai people are not afraid of buying cross-border online. About 49% of the active Thai e-commerce shoppers have bought abroad. With the growing middle class in Thailand, a market with huge opportunities.
Thailand, Indonesia, Malaysia, the Philippines, Japan, and Singapore are joining forces up to open up their QR code payment systems in cross-border payments. This will bring lots of convenience for travelers and online payments in the region.
Also note that Thailand is joining the BRICS+ nations to connect to alternate payment infrastructures, such as the MIR infrastructure. Already saw a lot of vendors accepting UnionPay the Chinese payment system.
I read about the 'consignment model' that some e-commerce giants are offering in Asia and also Thailand, in order to boost cross-border sales.
I couldn't find a lot of details on it, so if anyone knows let me know, it's interesting.
It appears it is possible to have a product idea sourced by (for example Lazada) instead of funding a product idea yourself, lowering the risk for the seller and expanding the product range for the buyers and Lazada customers.
SuperApps
As I wrote in other blog posts, super apps in Asia are so convenient. They are digital platforms that provide multiple services, such as delivery, travel, payments, and social media.
These apps make consuming and doing things fun and are increasingly an important part of Asian daily life, much more so than in the West.
If you travel to Asia, be sure to use the Super Apps, it makes your stay much easier.
Also Thailand has lots of "superapps". Grab is -also here- one of the most popular ones although currently they are in fierce competition on the food delivery area..
You can do almost everything with Grab. Book a taxi, order food (wherever you want it to be delivered), make payments, ask someone to shop for you, and much more.
Grab Unlimited is the subscription pillar of the Grab group and it is also available in Thailand, giving lots of rewards in the Grab Ecosystem.
With super apps it is fun to do things. It is so easy to help others by helping you. Things happen because of the super apps.
Recently Grab ranked position one in a research in popularity of super apps. The article has a paywall so if you don't want to pay, read it here.
LineMan is popular as well and on it's way to becoming a super-app. I see more and more LineMan ads in Bangkok and they are in competition with Grab at for example food delivery.
I won't mention all super-apps I used in Thailand, but there are plenty, often the same apps as in other Southeast Asian countries.
Messengers in Thailand
In terms of messengers, it is a little different than in the West. The most popular messaging app is the South Korean "Line app", followed by Facebook Messenger (unfortunately) and then Whatsapp.
Line works quite well in my experience. Not as good as WeChat (which is also accepted regularly here), but it works well and is a strong brand in Thailand and Asia.
Retro brandsigns
If you want to go back in time, then visit Chinatown in Bangkok. It is there that you can still find signs of real old -sometimes almost forgotten- brand names. One part of Bangkok is highly modern, but these old parts sure are nice to visit.
General
Although Bangkok seems highly modern and (relatively) wealthy, there are many Thai people who still are very poor and struggling to get sales. There is a huge wealth gap between Bangkok and the other parts of Thailand. Says not only me but also Thai people themselves.
Having said that, I did have the feeling that a lot is going on in Thailand. I noticed while walking, talking with people, and reading English-Thai newspapers that a lot of effort is done into digitization and the production of goods. Read more on this via these links:
- True Digital park is an initiative to digitize Thailand. During my travels here -if I compare to earlier travels- I see much more digital initiatives, also and especially by Thai companies. That's cool to see. So I guess the digitization and learning projects work.
- A lot of Chinese companies are investing in Thailand as well, especially in the car and solar panel industry.
- It was also nice to read about the "Thailand knowledge initiative", I stumbled upon a pop-up version of this initiative called TK Park, which made me read more about it. In the popup version, there are quite some magazines you can read with the TK Read app. See pictures below.
- More and more Thai companies start expanding and exporting (in the region) like this Thai flip flop innovator. That is profiting from the economic recovery in Thailand but also they are selling more and more internationally.
Thailand is not only a great place to visit for a holiday but also to get retail inspiration.
There are lots of flagship stores, many try-out concepts, and many stores that use both on and offline integrations, a lot of things are happening in the fintech areas. You will also find lots of restaurant and bar concepts and try-outs.
Thailand, is well worth a visit, not only for holiday but also for retail inspiration.
You will find perfect instgrammable artifects like this abandoned car in Chinatown
Alex
Comments
Post a Comment