Online cross-border shopping set to surge 84%

Thai shoppers buying things they can't find in Thailand online but customs taxes big uncertainty that must be cleared up.

ONLINE SHOPPING & CUSTOMS TAXES

Online cross-border shopping set to surge 84%

17/02/2017
Suchit Leesa-nguansuk

Thailand's online cross-border shopping is expected to grow by 84% this year from 60 billion baht in 2016.

Shoppers are gaining confidence in the online shopping channel and seeking certain products unavailable domestically.

This is according to Somwang Luangphaiboonsri, country lead of PayPal Thailand. PayPal is the US- based digital payments giant used to make online payments in much online shopping.

THIRD COUNTRY FOR PAYPAL OFFICE AFTER SINGAPORE & MALAYSIA

Online cross-border shopping by Thai users purchasing products from overseas websites has grown much more than Thailand's overall e-commerce market.

The overall e-commerce market includes both the business-to-business (B2B) and business-to-consumer (B2C) segments.

Thailand is the third Southeast Asian country where PayPal has chosen to open a local office, after Singapore and Malaysia.

TWO MILLION PURCHASED FROM OVERSEAS WEBSITES LAST YEAR

Payment transactions in Thailand have experienced double-digit growth in the past three years.

The number of online shoppers in Thailand reached 7.9 million last year, with 2 million purchasing goods from overseas websites.

This is according to a 2016 research jointly conducted by PayPal and Paris- based market researcher Ipsos.

SAVING MONEY & FAST SHIPPING: REASONS FOR SHOPPING ONLINE

Online cross-border shopping averaged 30,893 baht per head annually against 41,215 baht paid by the overall e-commerce.

Thailand's e-commerce spending is predicted to increase by 16% to 377 billion baht in 2017 and 426 billion in 2018 from about 326 billion in 2016.

The survey also found 55% of Thai respondents said they are willing to spend more online this year thanks to three reasons: convenience, the expectation of faster shipping and saving money.

Thai online cross-border shoppers have mostly bought three key categories of products: fashion, digital entertainment and education and consumer electronics.

CHINA & THAILAND LEADING ASIA-PACIFIC IN CROSS-BORDER MOBILE DEVICE PURCHASES

China and Thailand are leading the Asia-Pacific region when it comes to making cross- border purchases on a mobile device, Mr Somwang said

An average of 47% of cross-border purchases were made on a smartphone or tablet in China in 2016, followed by 46% in Thailand.

PayPal predicts Thailand's mobile commerce segment will grow 22% this year to 174 billion baht from 142 billion in 2016, with that figure amounting to 206 billion baht in 2018.

LACK OF CLARITY ON CUSTOMS DUTIES & TAXES: MAJOR PROBLEM 

Nonetheless, the online payment service provider said there are still barriers to online cross-border shopping in Thailand

Barriers including relatively high shipping costs and customs duties and a lack of clarity in customs duties and taxes.

PAYPAL PROTECTS CUSTOMERS WITH RETURN POLICY

In a move to address buyers' concerns, PayPal has started a new returns policy to help customers called the Refunded Returns programme.

This returns policy will allow buyers to return products after purchase, with PayPal reimbursing shipping costs.

PayPal also offers buyers protection covering e-travel tickets, digital music, digital books, digital games and software downloads.

PAYPAL TARGETING MULTI-CURRENCY TRANSACTIONS OF THAI SMES

According to Mr Somwang, PayPal aims to ramp up its payment services this year to cover more Thai small and medium-sized enterprises (SMEs) and companies.

Merchants who have a PayPal account are allowed to hold a balance in their accounts in 25 different currencies.

Consumers are also offered the convenience of using PayPal accounts to buy products without the need to fill in credit card details every time they make a purchase.

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