E-commerce in Thailand made a massive revenue worth $8.5 billion in 2021, an impressive figure for any APAC country. E-commerce in Thailand continuously rises yearly, and new firms are constantly emerging. Investing in Thailand’s e-commerce business would surely be a dream for international and domestic entrepreneurs.
Online platforms are the new ways to distribute products and services worldwide. The trend is spreading to every corner because of the high demand for online stores. Lower and affordable prices online, a variety of products, free delivery, and good customer service are some of the reasons why customers in Thailand opt for e-commerce.
Setting up an E-commerce Business
Setting up an e-commerce business in Thailand is no different than in other countries. You can consider these to be the foundation for any entrepreneur. It is not an easy task to operate your e-commerce in a different country, but the things that you should do to achieve success are-
Research about the space and find your niche
This is the first step of your business. You must first develop the type of product you want to sell. Find answers to all related questions. What am I going to sell? Is it in public demand? How many firms have already made products like this? And other questions along similar lines.
Next is thorough research about the general public and their demands for e-commerce. You must be aware that e-commerce is not new for Thais, who are invested in this sector. Find your niche within e-commerce. What are the things that others have not touched? Or maybe how can I make ordinary products different? What are some other demands of Thai customers? Consider all possible questions when determining your segment.
After coming up with products and your niche market, go a little further. Think about how you are going to deliver the product to the customers. How can you make the website or app accessible for all customers? What payment options are available to them, and so many other factors in evaluating your idea and research?
Select a unique business name
Once you’re done making the strategies, select your unique and solid business name. It should indicate your business and what you have to offer. Choose a different domain name that must not coincide with any other firm. Once you have selected a unique name, get the patent as soon as possible so it can be registered as your company’s name later on.
Putting Together E-commerce Terms and Conditions
You should incorporate several terms and conditions into your business before and after launching it. These are-
- Accurate information: Every item present on your website or the app should have all the necessary information that any customer must know before buying. This clears out any confusion among customers and gives them the right to choose after learning about the product completely. In fact, it is observed that 54% of customers return their orders due to unsatisfactory products.
- Terms of Sale: You must make the audience aware of the type of product they are buying. Whether it is just for kids or adults. Do mention the product’s usage age if it shouldn’t come in contact with kids.
- Mode of payments: In Thailand, there are only two modes of payments available- bank transfer and cash on delivery as credit card penetration is low. Mention these payment options clearly on your website.
- Shipping & Delivery: Set up an estimated time of arrival (ETA) and inform the customers about the same. If possible, hire a 3PL to make your delivery and shipping process even more efficient. It is seen that 45% of customers abandon online shopping cards due to unsatisfactory delivery options. Therefore, be sure about how you are going to deliver the item.
- Intellectual Property: As mentioned above, you must come up with an original or unique company name or logo that must not coincide with any other firm. If possible, trademark the company name as soon as possible. Here are a few requirements of a trademark-
It is not compulsory to trademark your company name, but it is always advised to go for it since it benefits you afterward. It reserves all the company’s rights to the owner and avoids infringement. Documents you would require to trademark your firm is-
- A logo of the trademark in the exact color
- Signed passport copy of the authorized director(s)
- A copy of the applicant’s company affidavit (if based abroad) and an original set of the company affidavit in case of a Thai company
- A signed power of attorney (should be notarised if signed from abroad)
- Disclaimer of Liability: Make yourself clear about the case of any loss, damage, or injury. Mention in the description whether or not the company is responsible for any such actions.
- External Links: If your link takes the customer to a third-party link, then alert the customer right before the redirection. So that your customer can decide whether they want to continue shopping or not.
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Know Your Market and Your Competition
Thailand has four main types of online channels-
- E-marketplace– where buyers can find a wide range of goods on websites. Some big names in this channel are Lazada, Shopee, 11Street, Looksi, and many others.
- Brand Webstore- refers to standalone websites that allow customers to purchase directly from the website. This brings you access to customer data that can be used afterward for future marketing.
- E-retailer- This means an online platform for retailers. It is different from the e-marketplace as it allows third parties to sell their products in a shared marketplace. In contrast, e-retailers sell their products from their own stores. Some common examples are- Tesco Lotus (groceries), Robinsons (Fashion and Beauty), and many others.
- Social media– This refers to selling products on online platforms such as Facebook, Instagram, and LINE.
Research in-depth about the marketplace in Thailand. How are customers reacting to these different channels, and which of them is the most advantageous? Some factors to watch out for before jumping into the market are-
- The current market trend of the region
- Your target audience
- Type of audience who are more likely to visit online stores
- Advertising effectively and many other factors
The next step would be identifying your competitors. It is crucial to have a thorough knowledge of your competition. Write down a business plan and roadmap about what you want to launch.
Create Business and Marketing Plans
There are various methods to market your business. Some ways could be email and content marketing that broaden your company’s spectrum. Another type of famous marketing platform is social media. Advertise your products as much as possible, as the target audience is most active on social media platforms. Moreover, utilize tools such as Google Ads, social media ads, word of mouth, and many others. You can also focus on getting the most website traffic on your website. Build up SEO and other organic methods to develop your website. Take advantage of e-commerce tools and reach the maximum number of potential customers.
Register Your Business
In order to establish any e-commerce business, the company must register with the Department of Business Development (DBD) under the Ministry of Commerce. It requires some documents, such as
- A request for commercial registration
- The commercial registration’s copy and id card of the managing partner or your authorized board
- A copy of the manager or partner’s identification card (in the case of an ordinary person)
- An authorization letter (if any)
Moreover, it is mandatory for entrepreneurs to acquire a unique domain name and an active website, as mentioned earlier. It must not coincide with any other firm. They must also submit some basic website details with a commercial registration form. Simultaneously, the domain name is made to register with the Thau Network Information Centre Foundation (THNIC). The company owner also has the right to opt for trademarking under the name of the company, meaning reserving the right to themselves.
When registering your domain name (with .co.th extension), you must bear-
- Certificate of registration
- The VAT registration document
- The VAT modification request document.
This process usually takes somewhere between six months to one year, starting from the filing date.
Relevant Permissions/licenses Required to Operate in Thailand
Once your business has started working in the country, you must obtain a special e-commerce license at the DBD within a 30-day period. This e-commerce license is essential if you have one or more websites that sell services and goods in Thailand.
The point to note here is that even if you have your e-commerce store on any social media platforms, it would still require this license if it has any pricing and payment options. The permit typically costs THB 9,500 or US$260.
In order to apply for the e-commerce company license, you must fulfill these requirements-
- Name of the website
- Nature of the services or goods being sold on the website
- The starting date of the website, when it became active
- Payment method for customers
- The document proving the domain name registration or certification from the service provider (ISP or web host)
If your company goes for online credit card payments, it must comply with specific security mandates by the Bank of Thailand.
There are no such rules and regulations on the import of general items such as clothes and furniture. They can be imported into Thailand without any restrictions. However, some items that take permission and licensing are- drugs, food and supplementary products, wild flora and fauna, antiques, and things of that nature.
These different commodities have policies and licenses issued by various government departments. For instance, importing any drugs or food items requires permission from the Food and Drug Administration of Thailand, and so on.
How a Third-Party Logistics Provider Can Accelerate Your E-commerce Business in Thailand
When you’re new to a region, you need trustworthy 3PL providers who can help you connect your business with your customers. That’s where Locad comes into the picture. Get the best in e-commerce, such as flexible warehousing, same-day pick and pack, real-time insights into sales, and the latest technology. With Locad, you can build a robust and secure warehouse network, courier services operating on national and international levels, and a unified e-commerce platform. Furthermore, you will also be able to satisfy your customers with the most optimized delivery services, further boosting your sales and popularity.
Now that we’ve seen the prerequisites required to start an e-commerce business in Thailand, your next step is to gauge interests in the market and position your business in a way that captures the attention of your target market. Thailand is a region that brings with it unlimited opportunities for emerging e-commerce businesses. And when you’ve done your research and know how to operate in the region, you streamline the process required to kickstart your business and realize profits early on.