Thailand has witnessed tremendous e-commerce growth over the past 3 years. Online grocery services have become one of the fastest-growing e-commerce categories in the country.
The pandemic has accelerated the demand for e-commerce as preventative measures that encouraged people to social distance and stay indoors have promoted online purchasing of goods.
In 2021, Euromonitor projected that e-commerce expenditures among Thais was US$22 billion with an estimated 18% year-on-year sales growth in 2022. Thailand is the 22nd fastest-growing e-commerce country in the world. The pandemic has also accelerated the trend toward e-commerce with an estimated 45% increase in e-commerce spending. The food and beverage segment is the largest contributor to the e-commerce market with an estimated total revenue of US$6 billion in 2022. Euromonitor projected that the food and beverage e-commerce segment, including both restaurant and online grocery delivery, will grow up to 25% over the next 5 years.
Meanwhile, Statista reported that Thailand’s grocery e-commerce reached US$900 million in 2021, accounting for 3% of the whole grocery market. This is expected to rise to 5% in 2022 and 10% by 2025.
Mobile applications are the most-used method to shop online, comprising 65% of all transactions. Businesses are focusing on developing their own applications as a one-stop service from product browsing to purchasing to delivery. Honestbee and HappyFresh were some of the first to offer online grocery delivery services in Thailand and enjoyed a lot of success until online business giants, such as Line, Grab, and Lazada, and traditional supermarkets (e.g., Tops Market, Gourmet Market, Foodland, Makro, Big C) entered the market. Foodpanda, Grab, and Lazada partnered with major grocery stores and launched online grocery services in addition to their core food delivery service business, while LINE partnered with HappyFresh. Although traditional grocery stores already have their own online shopping platforms, many of them have partnered with these big delivery services to benefit from their expertise in e-commerce, logistic, and digital storefronts.
One of the biggest key drivers of Thailand’s e-commerce business model was the government’s encouragement to move towards an e-payment system.
The rising demand for online grocery options has also resulted in the rise of online only groceries like PassionDeliver.com and Paleo Robbie.