Thai SMEs turn to Amazon to better access the US e-commerce market

This collaboration, which was announced during the TOPTHAI Cross-Border e-Commerce Day 2024 event. aims to improve the e-commerce export capabilities of Thai small and medium-sized enterprises (SMEs).

A secondary objective is to improve the understanding of e-commerce exports to the US, which ranks second globally in terms of e-commerce revenue, with US$1.1 trillion in 2023. According to a survey, more than 65% of Thailand’s micro, small, and medium-sized enterprises (MSMEs) see the USA as a top e-commerce destination.

DITP director-general Phusit Ratanakul Sereroengrit expressed confidence in the partnership, saying: “We strongly believe that this will help accelerate Thai businesses’ pace in exporting and reaching global markets such as the US, while also enhancing the international reputation of Thai products.”

Anand Palit, the head of Amazon Global Selling for Southeast Asia, highlighted the importance of government-industry collaboration in organising educational sessions to improve e-commerce export capabilities.

“According to research commissioned by Amazon, 95% of the Thai businesses surveyed agreed that government-industry collaboration in staging educational conferences and seminars would enhance their e-commerce export capabilities. This is exactly what we are going to do with this MoU with DITP,” he said.

As part of the agreement, AGS will participate in DITP’s roadshows across Thailand, educating local brand owners and businesses about selling on Amazon’s US store and American consumer preferences. In the year to June 30, the top five categories from Thai selling partners on Amazon US were Home, Apparel, Grocery, Health & Personal Care, and Sport.

The collaboration also includes regular onboarding workshops to assist Thai brands in launching on Amazon.com, covering topics such as account opening, product listing creation, international shipping, and digital advertising.

Furthermore, AGS and DITP will continue to support the launch of Thai products under the TOPTHAI project on Amazon.com. DITP will select high-quality Thai brands for the programme and refer them to AGS for potential launch on the platform. A dedicated booth at the upcoming TOPTHAI Pavilion in New York’s Times Square on September 3 will showcase TOPTHAI-supported brands selling on Amazon.

Success stories from TOPTHAI-supported brands include Tuff Sport, a Bangkok-based Muay Thai shorts manufacturer, and Wel-B healthy snacks, a family-run business specialising in freeze-dried fruits.  Both companies have benefitted from Amazon’s services and DITP’s support in penetrating the US market.

The collaboration coincides with the global expansion of cross-border e-commerce. A recent study conducted by Access Partnership and commissioned by Amazon emphasises the significant opportunities available in business-to-consumer e-commerce, revealing that e-commerce exports from Thailand are currently valued at approximately 29.5 billion baht, with projections indicating that this figure will rise to around 313.8 billion baht over the next five years.

Significantly, micro, small, and medium-sized enterprises (MSMEs) stand to benefit greatly, with their share of e-commerce exports expected to increase from 38% to 55% by 2028.

The study emphasises the importance of e-commerce as an export facilitator: 87% of MSME respondents said that exporting would be impossible without it, and more than one-third attributed more than half of their revenue to international e-commerce transactions.

However, several challenges have emerged, most notably the high costs associated with cross-border logistics, customs duties and compliance.

Knowledge gaps about different e-commerce business models, regulatory implications, and a shortage of skilled professionals in digital marketing and logistics have all complicated the exporting process for these businesses.

To enhance export prospects, businesses expressed a desire for strategic public-private partnerships that could provide insights into foreign markets as well as educational resources for navigating their dynamics.

They also emphasised the importance of building a strong ecosystem of third-party logistics providers to streamline operations and lower costs, as well as advocating for multilateral trade agreements to reduce tariffs and regulatory barriers.

Amazon Global Selling is ready to enable thousands of Thai sellers to bring millions of locally produced items to global customers, as evidenced by the significant growth (double-digit increase in average sales) experienced by Thai businesses on Amazon.com during the first half of 2024. 

“With Amazon’s innovative tools, DITP’s support, and this partnership, we believe we can help more local brands go global and seize export opportunities in the US and other countries,” Palit said, promising that Amazon’s global infrastructure will help reduce barriers to entry for local businesses, enabling them to compete in the international marketplace with greater ease and efficiency.