The Thai retail business is showing signs of a gradual recovery, and economic experts predict that its market value will grow by approximately 10% in 2023, driven by increased economic activity and consumer spending. The Economic and Business Research Center, Economic Intelligence Center, Siam Commercial Bank (SCB EIC) forecasts that the market value will reach 3.7 trillion baht, with store-based retailing returning to pre-epidemic levels by 2024, while non-store retailing continues to flourish.
In the first half of 2023, retail businesses are expected to benefit from the government’s economic stimulus policies, leading to an uptick in sales. Additionally, an anticipated influx of Chinese tourists in the second half of the year is likely to further boost the retail sector. However, amidst these positive developments, certain challenges demand close attention, including product price fluctuations and the persisting issue of high household debt. The purchasing power of consumers remains fragile, particularly for those with high levels of borrowing, as higher interest rates increase financial costs. Furthermore, the depreciation of the baht could impact the affordability of imported goods.
E-commerce continues to thrive, albeit with increasing competition in the market. Although there was a temporary slowdown in online shopping activity after consumers resumed their pre-pandemic lifestyles, consumer behavior has shifted towards the convenience of online platforms. Marketplaces, in particular, offer a diverse range of products from multiple vendors, allowing consumers to compare prices and services easily.
The Buy Now Pay Later (BNPL) approach has gained prominence in the retail business, especially within the realm of online trading. Entrepreneurs are adapting to this payment method to facilitate purchasing decisions and encourage higher store sales. However, caution is advised regarding household debt, as BNPL could exacerbate financial burdens if not managed responsibly.
Another noteworthy trend in the retail sector is the growing focus on Environmental, Social, and Governance (ESG) issues. Entrepreneurs are increasingly emphasizing environmental responsibility, particularly in reducing greenhouse gas emissions. On the social front, businesses are directing efforts towards career development and enhancing transparency in information disclosure, catering to the preferences of consumers, especially the environmentally-conscious Millennial generation. These young consumers show a willingness to pay a premium for sustainable products.
As the Thai retail industry steadily recovers, stakeholders must remain vigilant in navigating potential challenges. Policymakers should continue to support economic growth while keeping household debt in check. Entrepreneurs should adapt to the evolving retail landscape, embracing e-commerce and sustainable practices to meet the changing demands of consumers. By striking a balance between growth and responsible financial practices, the Thai retail business can embark on a path of sustained recovery and prosperity.