E-commerce has lowered the barriers faced by sellers when exporting, especially micro, small and medium-sized enterprises (MSMEs), as it has allowed trading activities to occur at significantly lower costs than before. Foreign countries to export to, global shipping networks and sales channels are now accessible with just a few clicks. The shift in consumer behavior towards e-commerce is bolstered by the pandemic, given the restrictions on international travel and social mingling which affects footfall in traditional brick-and-mortar retail stores. Therefore, with the rapid growth in business e-commerce adoption and rising Internet penetration rates in the region, e-commerce serves as a meaningful avenue for local MSMEs to access foreign customers.
AlphaBeta has conducted a study (commissioned by Amazon) to examine the economic significance of the e-commerce export opportunity for MSMEs in selected economies in the region (i.e., Malaysia, the Philippines, Singapore, Thailand, and Vietnam).
Thai-based sellers can benefit from this increasingly important e-commerce export opportunity. Despite the strong e-commerce growth in Thailand, the biggest economic prize is likely to lie beyond national borders. We estimate that e-commerce sellers in the country currently earn an estimated THB110.2 billion (USD3.6 billion) from e-commerce sales made to overseas consumers annually, of which 31% is earned by MSMEs. If MSMEs were to accelerate the pace at which they adopt e-commerce for exports, this value could grow even further to reach THB485.8 billion (USD15.8 billion) in 2026, with 76% of this value earned by MSMEs. Through a survey conducted with 300 micro, small and medium-sized e-commerce sellers in Thailand, we also found that 90% of them believe e-commerce is critical for their ability to export, and 29% of exporting MSMEs that use e-commerce earn over half of their online sales from abroad. However, Thai MSMEs face several challenges in exporting online – key barriers include the high cross-border logistics costs, stringent consumer protection laws in overseas countries, and the high customs duties charged on online foreign trades overseas.
A regional report on this e-commerce export opportunity is forthcoming.