Thailand's online shopping binge a sign of growing South-east Asia market size

Thailand has seen an explosion of Internet shopping in recent years due to stronger and faster Internet speeds in the country and the success of online merchants, such as Lazada.
Thailand has seen an explosion of Internet shopping in recent years due to stronger and faster Internet speeds in the country and the success of online merchants, such as Lazada. PHOTO: REUTERS

BANGKOK (BLOOMBERG) -Thailand has seen an explosion of Internet shopping in recent years as consumers become more tech savvy. And if that is anything to go by, e-commerce in South-east Asia is taking off as well.

Online retail sales in Thailand of everything from washing machines and televisions to fish sauce are growing more than 100 per cent, far outpacing purchases made at traditional stores, where sales are rising about 10 per cent.

That is down to a combination of stronger and faster Internet speeds in the country and the success of online merchants, such as Lazada.

Thailand's third-biggest mobile-phone company, Total Access Communication, estimates that Thais spend up to six hours a day on social media websites, including Facebook and Youtube.

Thailand is the only country in South-east Asia that breaks down retail sales data into an online category, providing a useful guide of what e-commerce growth may be like in the region, according to Maybank Kim Eng Holdings.

While online sales in South-east Asia have been growing strongly, they still account for less than 4 per cent of overall retail purchases, Maybank economists Chua Hak Bin and Lee Ju Ye said in a report.

Bigger markets, such as China and South Korea, already have higher penetration rates of online retailing of 16 per cent and 18 per cent, respectively.

That shows the potential for South-east Asia, where e-commerce sales could grow to 5-10 per cent of overall retail purchases over the next five years, according to Maybank.

Alibaba Group Holding founder Jack Ma recently signed up to be a member of a government panel in Indonesia tasked with steering the e-commerce industry in South-east Asia's most-populous nation. Macquarie Research estimates online retailing in the country can reach US$65 billion (S$88 billion) by 2020.

The surge in e-commerce and a lack of official data means the health of the consumer in South-east Asia may be underestimated, according to Maybank. Tracking consumer patterns will involve more than just looking at official retail sales, it said.