Bangkok is among the top e-commerce cities in Asia, along with other cities, such as Jakarta, Kuala Lumpur, Shanghai, and many more, according to the study in our latest report, “Top E-commerce Cities in Asia”. The report emphasizes the significance of e-commerce landscape in Asia which has quickly adapted to global trends. In this regard, “e-commerce city” is defined as an urban city with interconnected infrastructure that makes up an e-commerce ecosystem that helps it develop.
The retail industry in the country has seen tremendous growth for the past decade, with USD 62 billion market size in Bangkok alone, caused in part by the growth of e-commerce in the city. Bangkok’s e-commerce is expected to grow strongly in the coming years, driven by the increasing number of users of mobile phone and internet, as well as improvement in Bangkok’s infrastructure, such as 4G. The home of 15.7 million population has 67% internet penetration rate, 5.7 million smartphone users and 45% digital banking penetration.
With the intense competition among e-commerce operators, the government’s recent PromptPay service, which falls under the national e-payment scheme, is also in driving e-commerce activities in the country. Furthermore, the quality and reliability standard for online shopping has improved dramatically compared to the past years. Mobile e-commerce will continue to see strong growth especially among millennials generation.
Despite the swift growth, Bangkok’s e-commerce landscape is yet to see its full potential. Bangkok, alongside Ho Chi Minh City are lagged behind compared to their counterparts when it comes to human human resource and knowledge creation in our scoreboard. Slow digital banking, with 45% penetration rate, coupled with relatively low average digital spending per capita also put a brake to e-commerce growth in Bangkok. The residents are also still favoring brick & mortar style retail shop to make the final purchase decision, while most e-commerce platforms are only used to look, observe and compare products that they are interested in.
The report also report stated that integration with dominant online payment system as well as partnerships with trusted third party logistics is seen essential in ensuring quality service for the existing and new players in the Bangkok e-commerce scene. To maximize the e-commerce potential in the city, players could ensure a favourable experience and provide express delivery with a reasonable price to shift the market towards e-commerce market.
The study shows an exponential growth from the e-commerce industry in the world, from USD 2.86 trillion in 2018 to an estimated projection of further growth of USD 6 trillion in 2022. The Asia Pacific market shows 35% growth rate, or USD 1.8 trillion retail e-commerce sales in 2018, making the region as a leader to achieve one-fourth of global e-commerce share by 2023.
Bangkok and other global cities can improve their e-commerce ecosystem through the framework which is suggested in the report, providing 5 key building blocks, including: stable and predictable regulatory environments; adequate talent; market readiness and robust infrastructure; funding to scale up the business, and global culture to empower innovative ideas, for startup ecosystem to reach its full potential.
Download the full report on Top E-Commerce in Asia