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Despite enjoying growth in 2013, Internet retail sales here represented only 1 per cent of the total, and they are expected to remain at this share through 2018.
Thailand is currently one of the largest markets for Internet retailing in Asia, valued at US$1.054 billion (Bt33.9 billion), and is expected to see its value grow by 74.9 per cent over the forecast period to reach $1.843 billion in 2018. However, the bigger picture remains that the share of Internet retailing in Thailand is weak and will continue to stagnate.
The slow uptake of Internet retailing is mainly due to strong competition from store-based channels. Grocery retailing dominates the Thai retail market at 63 per cent and is seeing chained players moving aggressively in the expansion of new outlets in urban and regional areas.
With the opportunity to see and touch the products before buying, most Thais still prefer to visit stores for shopping. This combined with low trust in online payment and the delivery process has benefited the store-based channel.
Low Internet penetration is also limiting the uptake of online retailing in Thailand. The country lags behind other emerging regions in terms of Internet users, with only 28 per cent of the population using the Internet last year.
This is much lower than the global Internet penetration rate of 35 per cent. In addition, delays in telecom infrastructure projects and investments due to severe floods over the past few years have led to slow progress for improved broadband connectivity within the country, Euromonitor says.
"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, retailing 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 but also to access products, such as quick deliveries or convenient click-and-collect locations."
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Internet retailing marketing share to stay at 1% until 2018