Japanese businesses use cross-border ecommerce to sell products to customers outside of Japan. Recently, the demand for inbound tourism has risen in Japan. Therefore, it's likely that Japanese businesses will see an increased number of repeat customers looking to purchase Japanese products after returning to their home countries. As such, cross-border e-commerce is expected to become a powerful tool for Japanese businesses looking to expand to other markets.

There are many countries Japanese businesses could target for cross-border e-commerce. For example, the US and China have large cross-border e-commerce markets, making them especially well-suited to Japanese e-commerce businesses. Likewise, Korea and Taiwan present similar opportunities. In recent years, interest in the cross-border e-commerce market in Thailand has grown. Thailand and Japan have a long history of cultural and economic exchange. Thus, the potential for growth exists for Japanese businesses through cross-border e-commerce with Thailand.

In this article, we outline what businesses in Japan need to know about cross-border e-commerce with Thailand. We detail the size of the Thai e-commerce market, the main payment methods used in Thailand and more.

What's in this article?

• What is the Thai e-commerce market like?
  
• How can Japanese businesses enter the Thai market with cross-border e-commerce?
  
• Which payment methods should businesses use for cross-border e-commerce in Thailand?
  
• What should businesses consider when pursuing cross-border e-commerce in Thailand?
  
• How can cross-border e-commerce businesses meet Thai customers' needs?
  

What is the Thai e-commerce market like?

Here are some details about the e-commerce market in Thailand, including basic information that businesses looking to pursue cross-border e-commerce in the country need to know.

E-commerce market size in Thailand

In Thailand, digital payments and online shopping are becoming more and more popular. Additionally, the popularity of the internet and social media – especially in urban areas – has had a positive impact on the e-commerce market.

According to Research and Markets, the annual growth rate of the Thai e-commerce market is expected to grow more than 10% annually from 2024–2028, with an estimated volume of $53.8 billion USD in 2028.

Thai customers are generally quite open to purchasing foreign products. According to an Asian Bridge survey, 76% of respondents had purchased goods through cross-border e-commerce, suggesting a high level of demand for foreign goods in Thailand.

Key qualities of Thailand's e-commerce market

Here are three of the main features and characteristics of the e-commerce market in Thailand:

Younger customers

In Thailand, the younger generation (i.e. aged 17–36) is an important target group for e-commerce. Digital payments are becoming more popular and social media promotes online shopping activity, especially among younger people. The needs and trends of these young Thai customers are important to consider in cross-border e-commerce.

Popularity of Japanese products

Thailand has a largely pro-Japan sentiment. There is a high level of interest in Japanese culture and food and a high degree of trust in Japanese products. This means many customers deliberately make an effort to purchase items from Japan.

For example, Daiso – Japan's popular chain of 100-yen stores – has several locations in Thailand and is quite popular with Thai customers. Other Japanese products, such as electrical appliances, cosmetics and sweets, are also well-liked in Thailand. As inbound tourism to Japan grows, it's likely that many Thai tourists will become repeat customers, purchasing Japanese products via cross-border e-commerce when they return to Thailand.

Live commerce

Much like cross-border e-commerce in China and South Korea, live commerce is very popular in Thailand. Live commerce is a sales method that introduces and promotes products and services to viewers in real time using live video streaming from apps and social media. As online shopping gains popularity in Thailand, there is an increase in marketing activities by businesses using live commerce, largely led by the younger generation.

Businesses all over the world use live commerce. Here are some of the reasons live commerce is trending in Thailand:

• It is relatively cheap, making it accessible for businesses of all sizes.

• Live-streaming helps the streamer and viewer interact directly, allowing prospective customers to establish a connection with the product.

• By introducing products in real time, customers can learn more about the products, increasing their trust in the brand.

Thailand's major e-commerce shopping centres

In Thai e-commerce, there are two main e-commerce shopping centres: Shopee and LAZADA. Some Thai customers have a strong preference for Shopee, while others only use LAZADA. That said, many shoppers use both, depending on the items they seek. Businesses looking to develop cross-border e-commerce in Thailand should consider opening stores on both Shopee and LAZADA.

Shopee

Shopee is a Singaporean e-commerce shopping centre that recently gained popularity in Thailand. Because it supports cross-border e-commerce between Japan and South East Asia, it's relatively easy for Japanese businesses to open a store there.

One of Shopee's advantages is its dedicated page for business owners. The page allows businesses to use a variety of functions related to shop operations, such as registering product information, managing orders and communicating with customers. Shopee also focuses on social media marketing. The Shopee Education Hub provides a wide range of useful information on cross-border e-commerce, including online seminars for shop owners.

Shopee has also grown popular with customers in Taiwan's cross-border e-commerce market.

LAZADA

Due to its structure and system, LAZADA is sometimes referred to as "the Amazon of South East Asia". It is the area's largest e-commerce shopping centre, mainly selling daily necessities, home appliances, clothing and miscellaneous goods.

LAZADA exists under the corporate umbrella of Alibaba – one of the world's largest e-commerce companies. As a result, LAZADA draws on the know-how of Alibaba's Tmall, the largest B2C marketplace in the world. This helps make LAZADA easier to use for buyers and sellers.

How can Japanese businesses enter the Thai market with cross-border e-commerce?

There are many ways to get started with cross-border e-commerce. In Thailand, the methods for starting cross-border e-commerce are generally the same as those for cross-border e-commerce in South East Asia. Here are the three methods:

• Build an in-house e-commerce site

• Create a store in a local e-commerce shopping centre

• Open a store on a Japanese e-commerce shopping centre that supports cross-border e-commerce

The time and cost of preparing your store will differ depending on which method you choose. Therefore, it's important to consider cost effectiveness and choose a method that suits your business' management strategy.

Which payment methods should businesses use for cross-border e-commerce in Thailand?

Businesses looking to expand into Thailand should adopt certain payment methods to successfully engage in cross-border e-commerce. For example, cash transactions are a particularly important option in cross-border e-commerce with Thailand. In addition, mobile payments have become popular because of the Thai government's promotion of cashless payments.

Here are the most popular payment methods in Thailand:

• Credit cards (i.e. Visa or Mastercard)
  
• PromptPay
  
• TrueMoney
  
• LINE Pay
  
• Cash on delivery
  
• Bank transfer
  

In addition to these, more people in Thailand are beginning to use PayPal, AliPay and other similar payment services, so it's important to consider these options as well.

What should businesses consider when pursuing cross-border e-commerce in Thailand?

Given the popularity of Japanese brands and products in Thailand, it is an attractive market for cross-border e-commerce. However, entering the market might require specialised knowledge or expertise, so it is recommended to consult with a local sales agent or an expert familiar with cross-border e-commerce in Thailand. Below, we list some other important points to consider:

Cash payments

Although cashless payments are gradually becoming more common, cash remains the primary method of payment in Thailand. As a result, many people in the country still do not use online payment methods, even though bank transfers via online banking are becoming more widely used. For this reason, it is important to offer alternatives to cashless payments – such as cash on delivery – in cross-border e-commerce with Thailand. To offer a cash on delivery option, it is necessary to have a warehouse located in Thailand.

Local warehouses

Without a warehouse in Thailand to store products, sales activities could be restricted. For example, a business might not be able to offer cash on delivery as a payment option to customers. When using a Thai e-commerce platform for cross-border sales, you might not be granted permission to open a store without a local warehouse.

On platforms such as Shopee or LAZADA, businesses without warehouses in Thailand are not allowed to sell certain products, such as supplements or cosmetics. If opening a store on either of these major e-commerce platforms proves difficult, available sales channels for cross-border e-commerce in Thailand lessen significantly. Therefore, Japanese businesses looking to enter the Thai market through cross-border e-commerce should consider setting up local warehouses in Thailand.

Thai language support

While many South East Asian countries use multiple languages, Thailand has only one official language: Thai. Similar to Japanese, the accuracy and quality of machine translation for Thai tends to be lower than for other major languages, such as English. As a result, it is important to have personnel with a strong command of Thai to provide effective cross-border e-commerce services to Thai customers in their native language.

Limited purchasing power

Overall, personal income in Thailand remains relatively low. Additionally, purchasing power for Japanese products – often more expensive than locally produced goods – is limited to a certain segment of the population. This segment mainly includes white-collar workers and those in technical careers (e.g. engineers) living in urban areas who earn relatively higher incomes. In other words, the pool of customers able to purchase products through cross-border e-commerce is limited. This can lead to challenges with customer acquisition.

As income levels in Thailand continue to rise, it is expected that more customers will gain greater purchasing power. As a result, purchasing activity across various sectors is anticipated to increase.

The Thai tax system

When selling products from Japan to other countries, it is important to first understand the tax system of the destination country. In particular, customs duties for cross-border e-commerce can vary significantly from one country to another. Therefore, when entering a new market, it is important to gather information in advance by consulting with experts who are familiar with the customs regulations of the destination country.

Customs duties

Taxation methods for tariffs in Thailand are similar to those of the US and other countries. There are two types of tariffs: ad valorem tariffs and specific rate tariffs. Customs duties in Thailand are made up of the five main tariff rates below:

• General tariff rates
  
• Association of Southeast Asian Nations (ASEAN) Common Effective Preferential Tariff (CEPT) tariff rates
  
• Applicable tariff rates for free trade agreements (FTAs)
  
• Generalised System of Preferences (GSP) tariff rates
  
• Global System of Trade Preferences (GSTP) tariff rates
  

Value-added tax (VAT)

In addition to customs duties, it's important to be aware that Thailand has implemented VAT. Similar to Japan's consumption tax, Thailand's VAT applies to imported goods in addition to goods and services sold within the country. In other words, when providing goods or services to customers in Thailand, overseas businesses are subject to tax obligations and VAT is applied to cross-border e-commerce transactions.

Thailand's VAT system was introduced in response to the growth of the e-commerce market. As with customs duties, it's important to have a clear understanding of the latest regulations – including how the tax is collected and paid – before launching cross-border e-commerce operations.

How can cross-border e-commerce businesses meet Thai customers' needs?

In this article, we covered the fundamental knowledge Japanese business owners need to have before entering the Thai e-commerce market. This includes the scale of the Thai e-commerce market, as well as major e-commerce shopping centres in Thailand, popular payment methods and other key points.

Thailand is known for its friendly attitude towards Japan, with many people showing a strong interest in Japanese culture and popular Japanese products, such as electronics and cosmetics. In addition, the main demographic for the Thai e-commerce market is the younger generation, who are generally comfortable with online shopping, including cross-border e-commerce. In this sense, the conditions are quite favourable for business expansion.

However, there are still many important factors to consider when it comes to cross-border e-commerce in Thailand. To succeed, it's important to first gain a thorough understanding of Thai business practices and customer preferences and then implement an effective marketing strategy, particularly on social media. In addition, it's important to offer familiar and convenient payment methods to encourage Thai customers to participate in cross-border e-commerce. This means businesses need to be flexible in the payment options they offer, including offering cash-based payments alongside credit cards and others.

Stripe offers a wide range of functions to support the efficient operation of payment services, including the introduction of cashless payments, such as credit card payments, information processing and revenue management. For example, Stripe Checkout supports more than 30 languages and more than 135 currencies and can be used to refine and simplify the payment pages of cross-border e-commerce sites. This also makes it possible to provide customers with a smooth and pleasant payment experience, which in turn leads to an increase in the purchase completion rate.