Thailand’s online channel sets tempo for retail sector’s 7.3% growth

Thailand’s retail sector in 2023 expanded 7.3% year on year to an estimated value of 4.32 trillion baht, the Commerce Ministry reported on Friday.

Traditional or off-line channels accounted for 3.4 trillion baht of trade, increasing 6% year on year, while 924 billion baht of trade was conducted via online channel, up 12.6% from the previous year, it said.

In 2023, the retail, wholesale, and auto repair businesses contributed 2.8 trillion baht to the country’s gross domestic product (GDP), the highest in the service sector. This contribution accounted for 15.17% of Thailand's GDP last year.

Last year, the retail sector employed some 2.89 million people, or 13.56% of labour in the service sector, and 7.25% of nationwide workers.

Using statistics from 2022 and 2023, the ministry’s Trade Policy and Strategy Office classified retail businesses into three groups, as follows:

● Rising star group comprises businesses that reported increasing net profit since 2022. This group included retailers of communication and IT devices, cultural and recreational products in specialised shops, as well as vendors at stalls and markets.

● High potential group includes businesses that reported increasing revenue since 2022, but declining net profit or increasing net loss. In this group are traditional shops and online platforms.

● Need improvement group comprises businesses that reported declining revenue since 2022, as well as declining net profit or increasing net loss. This group includes retailers of food and beverage in specialised shops, retailers of home appliances and second-hand products, fuel retailers at service stations, and retailers outside shops, stalls and markets.

The office director, Poonpong Naiyanapakorn, advised retailers to study market trends and customer behaviours and make necessary adjustments accordingly, such as adding online channels to fulfil increasing demand for online shopping.