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Why Amazon Is Luring Exported Products From Thailand

Amazon sees a great opportunity for Thai sellers as Thailand is rapidly evolving into a leading manufacturing base and has one of the largest B2C (business to consumer) markets in ASEAN.

It’s widely known around the world that Thailand produces high-quality electronics, world-class silk, food and beverage products however Thailand manufacturers much more. With a relatively low cost ‘blue collar’ workforce, Thai manufacturing is well placed in global markets against other developing countries providing the Thai Baht can remain stable and not appreciate too much.

Amazon recently opened their first Thailand office in Bangkok in early 2019 however they officially launched their Thailand Global Selling team under the registered business name of Amazon Web Service back in 2016 in order to stimulate awareness of Amazon marketplaces to Thai manufacturers and retail brand owners.

Although the take-up by Thai manufacturers has been relatively slow to date, awareness and understanding of the potential of selling on Amazon are growing and Thai sellers are beginning to take the leap into international e-commerce via Amazon. Amazon’s Bangkok office, located Phetchaburi Road is both a commercial office for the Global Selling team and a training centre where sellers are trained on how to use the Amazon platforms and how to attract international buyers to their product listings.

When it comes to Thai sellers or retailers, Amazon is a very exciting prospect for various reasons however the vast majority of sellers are attracted by the fast-growing Prime membership customer base and other buyers that are active on the Amazon marketplaces worldwide.

It’s estimated that in July 2018, Amazon had more than 95 million (active) Prime membership accounts just in the US alone.  It is also estimated that Amazon had over 49% of the online shopping market in the USA alone so it’s easy to see why more than 1 million SMEs that are located in the US choose to sell on the Amazon USA marketplace. Thai sellers can also see that for many product categories, they can sell at higher retail prices on Amazon’s international marketplaces rather than locally on Lazada and Shopee.

Another appealing aspect is that most Amazon product categories require no pre-approval so just about anyone can start selling on Amazon. Unfortunately for new Thai sellers or brands, the professional marketing tools such as branded logo presentation on the marketplace and the creation of an actual Amazon flagship webstore are not available to anyone or entity that doesn’t own a registered and active US trademark.

Thai sellers definitely have their work cut out for them when selling internationally on Amazon. Largely, the competition will be against the Chinese manufacturers who are aggressive and have been actively selling on Amazon for a number of years. Amazon marketplaces are competitive in general and the selling environment is at its competitive peak around the major shopping holidays and seasonal events throughout the year.

During the lead-up to the Christmas shopping season in 2017, more than one billion items were ordered from sellers in five days, from November 23rd through to Cyber Monday. Amazon electronic devices had their best holiday sales in history, with tens of millions of the Amazon Alexa-enabled devices sold worldwide. Echo Dot and Fire TV Stick with the Alexa Voice Remote were not only the top-selling Amazon devices for the holiday shopping season, but they were also the best-selling products from any manufacturer in any category across all of Amazon.

This clearly shows that voice-enabled or activated search is growing in popularity at an amazing rate. Thai sellers have been generally selling low-end consumer goods on Amazon to date including food and beverage products, clothing and apparel and household goods including homewares and basic furniture. The challenge will be if the Thai sellers can move up the value chain and start competing for more sophisticated and cutting-edge technology products which are the hot ticket items for consumers.

Clearly, Amazon is a very enticing prospect for any Thai manufacturer or brand owner however it does bring with it a number of challenges. Fortunately, the Amazon Global Selling Team Jumpstart program is providing some well-needed training for selected Thai sellers. The Jumpstart program provides a select group of 100 sellers per year with full training on how to launch their brand on Amazon and how to effectively market their products to Western consumers. Another alternative for Thai sellers is to outsource the management of their Amazon selling the account to a specialized e-commerce marketing company that has extensive experience with all aspects of setting up and managing a professional Amazon selling account. There are a number of specialized e-commerce marketing service providers based in Thailand including Elevate who provide a full-service turnkey solution for brand owners and manufacturers in Southeast Asia.

Amazon sees a great opportunity for Thai sellers as Thailand is rapidly evolving into a leading manufacturing base and has one of the largest B2C (business to consumer) markets in ASEAN. In addition, the Thai government are starting to create some exciting e-commerce initiatives including the new ETDA B2C marketplace to help drive growth in the region and retain ownership of a Thai only marketplace. The question many people want to be answered is, will Amazon launch a Southeast Asian marketplace of their own and enter the Southeast Asian market that is largely dominated by Alibaba’s Lazada and Gerna’s Shopee?

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Alex McLay
Written By

Alex is a Marketing Consultant at Elevate. Elevate is a marketing and consulting company helping businesses bring their products to market. Follow him on LinkedIn and website.

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