Currently, the digital market is driving the global economy. Because of this, many Thai entrepreneurs have begun to consider cross-border ecommerce for their small and medium-sized enterprises (SMEs). This can help them grow and expand their businesses into the global market. To do so, businesses must have outstanding products or services and marketing that can effectively reach customers. Businesses also need cross-border payments, which help Thai SMEs compete in the international ecommerce market.

In this article, we explore cross-border ecommerce from Thailand. We also identify which businesses are classified as SMEs and why Thai SMEs should enter international markets. We outline funding sources, various support organizations, considerations before expanding into global markets, and the importance of reliable payment solutions. All of this can help Thai SMEs expand their markets and increase opportunities to reach customers worldwide.

What’s in this article?

• What is cross-border ecommerce?
  
• Why should Thai SMEs enter the global market?
  
• What should Thai SMEs consider before expanding into the global market?
  
• Funding sources and support organizations for SMEs
  
• What methods can be used for cross border payments?
  
• Payment solutions for SMEs
  
• How Stripe Payments can help
  

What is cross-border ecommerce?

Cross-border ecommerce refers to buying and selling goods or services through online channels to customers in other countries who pay in their local currencies. The seller and buyer are typically in different countries. For example, this could include a Thai SME selling products to customers in the US, China, Europe, or Japan.

Cross-border ecommerce is a channel for selling products online to international markets and a tool to drive SME growth. It presents high-quality Thai products or services on the global stage through cross-border payment options that connect markets worldwide.

Why should Thai SMEs enter the global market?

In an era where business borders are gradually fading, cross-border ecommerce allows Thai SMEs to reach customers worldwide. The advantages of entering international markets include the following:

• Increase revenue and expand markets
  Because the international market is so large, cross-border ecommerce can help businesses expand their customer bases. This can help Thai SMEs significantly increase their revenue.
  
• Ensure business stability
  Expanding into international markets can increase sales and help diversify risk when the domestic economy fluctuates. This can reduce reliance on the Thai market, especially if the domestic market becomes saturated or faces an economic crisis.
  
• Raise product standards
  International markets often have higher standards than domestic markets. This can include higher standards for product quality, service, or packaging. This can encourage Thai SMEs to elevate their production processes or product selection to meet international standards, potentially adding long-term value to their businesses.
  
• Enhance SMEs
  Engaging in cross-border ecommerce often helps entrepreneurs enhance their management skills and experience. They can also gain valuable business insights from communicating with a large number of customers and build business partnerships with foreign entities. These enhancements can help them adapt to various markets worldwide.
  
• Use convenient cross-border payments
  Cross-border payment solutions today—such as those offered by Stripe—can make international trade convenient and fast. They can also reduce transaction costs under more secure standards. In addition, they allow Thai SMEs to receive payments and expand their businesses into international markets more efficiently.
  
• Use support from public and private sectors
  SMEs have resources to help them face the challenges of expanding into international markets. Today, there are several projects from both the public and private sectors that support and assist Thai SMEs in preparing and equipping them for entry into the global market. This is achieved via funding sources, programs, and a wide range of training opportunities that can enhance their knowledge.
  

What should Thai SMEs consider before expanding into the global market?

Expanding Thai businesses into the global market has many advantages. These include access to funding sources and support programs for SMEs that help them prepare for business development and market expansion. However, cross-border ecommerce also comes with various challenges that entrepreneurs should consider.

Analyze international markets

SMEs should analyze the market of interest and the target audience. They should also check whether the products or services have potential in that market. This includes analyzing overall ecommerce trends, pricing strategies, and examples of both successful and unsuccessful cases.

Understand local markets

Brand marketing and communication should understand the local market, meet international quality standards, and include reviews from real customers in that market. This will help enhance credibility when expanding into foreign markets. Furthermore, SMEs should develop marketing strategies, define communication tones, and translate and adapt website content, product descriptions, advertising, and customer service to align with the brand identity and cultural context of each market. This can contribute to a brand’s success on a global scale.

Consider logistics limitations

It is important to consider the availability and quality of transportation and infrastructure in each country to ensure delivery within a reasonable time frame and at a reasonable cost. Shipping costs are an important factor that can directly impact business profits. This is especially true for international shipments. SMEs should establish appropriate and balanced shipping cost criteria that consider customer satisfaction, product costs, and the following factors:

• Product characteristics: The weight, size, and type of product affects shipping costs.
  
• Real-time product tracking system: Choose a shipping system that has real-time tracking and return management that follows the return standards of each country.
  

Find a fulfillment partner with experience in the target market. In addition, consider including part of the shipping cost in the product price, and set the shipping fees within the standard range of the market.

Choose cross-border payment methods

Study the popular payment methods in each country (e.g., credit and debit cards, PromptPay, or digital wallets). Then, choose a provider that supports these methods with user-friendly features under international security standards, such as Stripe Payments. This financial solution can help businesses reach customers worldwide and offers payment options that meet the needs of SMEs of all sizes. It can also protect cross-border transactions from fraud and unauthorized access to data.

Understand currency conversion difficulties

Another challenge for cross-border ecommerce is currency conversion, which directly affects business profits. This includes currency exchange fees and fluctuating exchange rates. Entrepreneurs should use systems that support payments from abroad in multiple currencies, automatically convert money, and display prices in the customer’s currency for fast and convenient transactions.

Manage international tax and legal issues

Due to differences in import taxes, value-added tax (VAT) rates, and import-export regulations in each country, businesses should choose services that help reduce the complexity of tax compliance. Solutions such as Stripe Tax can automatically calculate and collect sales tax, VAT, and goods and services tax (GST) for physical and digital goods and services across all US states and in more than 100 countries. In addition, if you are outside the US, Stripe partners with Taxually to help you save time and more easily comply with local regulations.

Funding sources and support organizations for SMEs

Both the public and private sectors have funding sources and support organizations for SMEs in Thailand. These can help increase capital, knowledge, and skills for expanding into international markets.

Funding sources for SMEs

• Personal assets or partners
  These are personal funds or capital raised from partners or investors. This can include private equity or venture capital companies that focus on investing in businesses with high growth potential. These funds can help reduce SME debt burdens in exchange for shares in a company.
  
• Crowdfunding
  For SMEs with high growth potential, crowdfunding is an attractive option. It can be divided into four types: donation-based, reward-based, equity-based, and debt-based.
  
• Low interest loans
  Low-interest loans for SMEs—with interest rates lower than standard market loans—can help improve business liquidity and have flexible conditions. These include no collateral requirements, extended repayment terms, and grace periods.
  
• Online loan
  These include loans through an application or website by a financial institution licensed by the Ministry of Finance. This includes loans that use online sales for credit assessment and peer-to-peer (P2P) lending. This also includes borrowing between SMEs and investors through an online platform without going through a financial institution.
  
• Other loans
  Thai financial institutions offer a variety of business loans for SMEs, such as working capital loans, business expansion loans, and factoring loans, among others.
  
• Financial support
  The Thai government and various organizations provide financial aid to entrepreneurs without the need for repayment. This supports SMEs in various areas, such as market expansion, technology development, research and development (R&D), innovation, and financial support during economic crises.
  

Support organizations for SMEs

• The Office of SMEs Promotion (OSMEP)
  This is the central agency for helping Thai SMEs access support from the public and private sectors. This includes access to funding and guidance about programs suitable for businesses. OSMEP offers training and knowledge in organizational development, business, marketing, technology, digital solutions, production capability improvement, and more.
  
• SME Development Bank of Thailand (SME D Bank)
  SME D Bank of Thailand provides comprehensive financial services that cover manufacturing, service, and wholesale and retail businesses. It offers financial assistance, business management support, and digital tools.
  
• Thai SME Fund
  The Thai SME Fund assists local and small-scale SMEs with low-interest loans, access to funding, support for improving business capabilities, and business recovery assistance.
  
• Department of Business Development (DBD)
  The DBD helps with business registration and can help SMEs grow and adapt to the digital era and increasing competition. They provide training and knowledge on digital marketing, brand modernization, and point-of-sale (POS) systems. The DBD also provides assistance with connecting ecommerce and expanding SME business opportunities to international markets.
  

• National Innovation Agency (NIA)
  The NIA supports SMEs and overall innovation. It is suitable for SMEs that want to expand their markets, build networks, develop intellectual property, and promote national-level improvements.

• Institute for the Development of SMEs (ISMED)
  ISMED promotes and develops the capabilities of SMEs for stable and sustainable growth. They offer consulting, training, research, data collection, and networking. ISMED also encourages entrepreneurs to apply improvements and helps certify professional standards for personnel serving SMEs.

• Thai Credit Guarantee Corporation (TCG)
  The TCG is a state organization that helps SMEs access funding by acting as a loan guarantor to reduce collateral requirements. This can help increase the confidence of financial institutions in providing loans.

• Industry-specific organizations
  Joining organizations in specific industries is highly beneficial for SMEs. Examples include the Thailand Textile Institute, which plays a role in promoting the textile and garment industry, and the National Food Institute, which supports the food and food processing industry. These organizations can help with market expansion and value addition.

What methods can be used for cross-border payments?

There are many different options available for cross-border payments in Thailand today. They can be divided into the following categories:

• Bank transfers
  Bank transfers are widely used and trusted. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) system allows parties to transmit money transfer information between banks worldwide. These transfers are highly secure and can take anywhere from two hours to several business days. They often carry higher fees due to charges by the sender’s and recipient’s banks and intermediaries.
  
• Money transfer platforms
  Examples include Western Union and MoneyGram. International money transfer platforms have become increasingly important for international transactions due to their speed and often lower fees compared to traditional bank transfers. These service providers use advanced technology and ensure secure and efficient transactions.
  
• Credit and debit cards
  Using credit and debit cards is a convenient method for customers and is typically regulated by banks or card providers with strict security systems. However, it can involve higher exchange rates and additional fees compared to other methods. It is suitable for transactions of relatively low value.
  
• Digital wallets
  Digital wallets have become very popular in Thailand. Thai digital wallet providers—such as TrueMoney Wallet, YouTrip, and DeepPocket—have begun to play a significant role in providing international payment services.
  
• Quick-response (QR) codes
  This is a fast and secure method of sending payment information. Because QR code scanning is highly popular in Thailand, it is now being used for cross-border transactions with neighboring countries—such as Hong Kong, Malaysia, Singapore, and Vietnam—as customers are already familiar with its use.
  
• Bank drafts and letters of credit
  Bank drafts and letters of credit are traditional methods of payment using documents issued by banks. They are commonly used in import and export businesses, relying on bank credit to guarantee that the recipient will receive the specified amount of money. They are highly secure and reliable because the bank acts as a guarantor and verifies the transaction.
  

Payment solutions for SMEs

It is important to choose a payment solution that aligns with the needs of an SME according to its size. This can enhance operational efficiency, reduce management costs, minimize redundant work, and increase customer satisfaction.

SMEs in Thailand often have different payment system needs depending on their size and type:

• Micro SMEs: Micro businesses often need a payment system that is easy to use and quick to install and start using without much technical knowledge. It should also be low cost to help reduce the burden for businesses in the early stages.
  
• Small SMEs: Small businesses need a payment system that supports multiple channels, making it convenient for diverse customers and enabling organized transaction management.
  
• Medium SMEs: Businesses of this size should look for solutions that can integrate with accounting or enterprise resource planning (ERP) systems. This can provide comprehensive management of automatic financial transaction recording, electronic invoicing, taxes, and revenue.
  

Cómo puede ayudar Stripe Payments

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