Consumer goods to Thailand
Trends and opportunities
The personal care and personal effects sector is one of the more prominent
in Thailand, with demand increasing from a population entering higher
paying service sectors within cities and becoming increasingly
image-conscious; the rise of Thai women entering the workforce with
enhanced discretionary spending ability, and a large, buoyant tourism
Thai spending on personal care and personal effects is forecasted to rise
from THB 489.8 billion ($A 19.2b) in 2017 to THB 648 billion (A$ 25.4b) in
2021. This 7.3 per cent per year growth is the fastest of any household spending
category in the region. (Source: BMI Research,
Thailand Consumer & Retail Report Q4 2017
, September 2017
The retail market is fiercely competitive but is still regarded as
unsaturated, presenting strong potential for growth. And despite high
income disparity within Thailand’s 67 million population, the country remains
attractive for many international players.
The rise of online platforms and prominent advertising within metropolitan
areas is exposing Thai consumers to international beauty and grooming
trends, leading to increased awareness of products. Although Korean and
Japanese beauty trends and innovation still prevails in the market,
Australian brand equity is considered high to local consumers as they
perceive Australia as the country of clean and green products.
Additionally, the demand for “premiumisation” or high-quality products with
more natural ingredients has been growing in Thailand as a number of
consumers perceive they are safe and gentle to their skin.
Growing areas in this sector which Australian companies may also wish
to explore include:
herbal, natural and organic products with multifunctional benefits
- anti-ageing solutions
- senior wellbeing products
- maternity and baby care products
FTA gains for Australian exporters
The Thailand Australia Free Trade Agreement (TAFTA) and ASEAN Australia and New Zealand Free Trade Agreement (AANZFTA) have eliminated most import tariffs on beauty goods and vitamins imported from Australia to Thailand. Claiming preferential treatment under Free Trade Agreements to Thailand requires goods be accompanied by Certificates of Origin.
Marketing your products and services
Establishing a wholly owned presence in the market is difficult.
Retail comes under ‘List 3’ of business types where restrictions exist on
foreign business ownership. These lists outline a wide range of business
types where it is considered ‘Thai nationals are not yet ready to compete
with foreigners’, and the intent is entirely designed to protect local
business interests, from retail through to services. Please refer to
guidance on the Thai Board of Investments website.
To be successful in the market:
Engage with multi-brand retailers to establish an in-store presence
- Engage a local partner or agent to support administration and marketing.
Cosmetics and a number of personal care products are required to obtain a
certificate from the Thai Food and Drug Administration. This task is
usually carried out by the importer
- Consider franchising: the large retail conglomerates hold several master
franchises of international brands
- Familiarise yourself with local preferences with regard to the look,
feel and acceptable price points for your products
- Participate in local and regional trade shows to meet local buyers and
get brand exposure
- Develop in-country marketing activities, especially digital marketing to
create awareness to engage with your target audience.
e-Commerce platforms and the emergence of multi-brand retail chains is
changing the way Thais source personal care and beauty products.
Thailand is a very digital- saavy market and Thais are significant and
growing users of social media and online shopping platforms.
For Australian suppliers, the e-Commerce market is considered a ‘developing
opportunity’. In-market fulfilment remains a challenge for small foreign
companies, and cash on delivery remains the preferred payment method in
Thailand, however warehousing, logistics and payment systems are improving.
Multi-branded retail chains have also emerged quickly. These stores,
usually located within shopping centres, hypermarkets or department stores
include names such as Sephora, Eve & Boy, Stardust, Beauty Club and
Beautrium. These offer consumers ‘high value’ in-store service and
experience. It is likely more local and international brands plus new
affordable products will be available through this channel especially in
skin care and colour cosmetic ranges. (Source: Euromonitor,
Beauty and Personal Care in Thailand
, May 2017)
Links and industry contacts
this list of websites and resources is not definitive. Inclusion in this
list does not imply endorsement by Austrade. The information provided is a
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Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
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