Thailand's online retail market stalls at 1 percent

Online retail accounts for just 1 percent of the total market and is expected to remain through to 2018 amid tough competition from physical stores and delays in infrastructure rollout to boost broadband connectivity.

Thailand's online retail market is one of the biggest in the region but is expected to stagnate if there are no concerted government efforts to boost the associated infrastructure.

The country's e-tail market saw growth last year, however, sales in the segment accounted for only 1 percent of the total market and is expected to remain so through to 2018. This despite the fact that Thailand is one of Asia's largest online retail market valued at US$1.05 billion, according to a report by The Nation citing figures from research firm Euromonitor International. Its value is projected to climb by 74.9 percent to US$1.84 billion in 2018. 

The online retail segment, though, is facing strong competition from physical stores in Thailand where grocery retail leads the market at 63 percent. Retail chains are expanding aggressively into urban and regional areas across the country.  

Given the option, the majority of the local population prefer to visit physical shops and touch the products before buying. There is also low confidence in online payment as well as delivery, further boosting sales for physical retailers, according to the report.

In addition, at just 28 percent, Thailand's internet penetration rate remains low and behind other regions compared to the global average of 35 percent. Euromonitor further pointed to delays in telecommunication infrastructure investments and initiatives following several floods in the country in recent years, which had affected the rollout of enhanced broadband connectivity. 

"Without more efforts by the Thai government to develop the country's telecommunications network, Internet retailing in Thailand is unlikely to grow faster," said Mylan Nguyen, retail analyst at Euromonitor International. "For Internet retailing to take off, retailers will also need to develop more innovations and services to make it easy for consumers to buy [and] access products, such as quick deliveries or convenient click-and-collect locations."

While the Thai online retail segment seems to be hitting a brick wall, other Asian markets are enjoying high growth. U.S. retail giant Walmart , for instance, chalked up sales of 11.54 billion yuan (US$1.89 billion) in China last year through its Chinese subsidiary Yihaodian.com, doubling its stock keeping unit (SKU) to 3.4 million over the previous year. 

Over in Singapore , 78 percent of consumers shopped online at least once a month, with 66 percent spending more than S$100 (US$80.24) over the past three months, according to a GfK survey commissioned by PayPal. Some 55 percent chose to do their online shopping via their mobile devices at least once monthly. 

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