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How Thailand 4.0 Will Affect E-commerce

Written by
Katrina B. & Benedict L
Published on
Updated on
July 11, 2023

Thailand 4.0 aims to bring Thais out of the middle-income trap. Find out how these developments will affect e-commerce within Thailand and Southeast Asia.

In October 2018, Thailand formally launched1 its Thailand 4.0 initiative. With an eye on technological innovation, regional competitiveness, and financial empowerment for all Thais, the policy stretches far and wide across different industries. It also sets some tough standards and goals for education, industry, and trade.

Officials from the International Labour Organisation describe2 Thailand 4.0 as “an economic model based on creativity, innovation, new technology and high-quality services” with the aim of improving Thais’ quality of life. The policy is seen as a way to free the country from the “middle-income trap”, “inequality trap”, and “imbalanced trap”.

For e-commerce players who are eyeing business in Thailand, the policy is good news. Many of its programs and goals will support the development of the country’s e-commerce market, which is expected to account for 5 percent of total retail sales over the next five years, up from the current proportion3 of 1 percent of retail sales currently.

The government’s 5 agendas for Thailand 4.0 and how they will affect e-commerce

The Thai embassy lists five agendas5 for Thailand 4.0. Each of these either supports or has a direct impact on e-commerce—be it on the side of sellers, buyers, manufacturers, or e-commerce logistics providers.

Agenda 1: ‘Prepare Thais 4.0 for Thailand to become a first world nation’

This agenda takes a three-pronged approach to the development of the Thai people. One is education reform, encouraging mindful and results-based learning. The second promotes the development of new skills to support non-routine and project-based jobs—a necessity in the future workplace where AI and automation will take over repetitive work.

The last approach aims to “unlock individual limitation5” by providing financial support and social opportunities to Thais who live in poverty and those who earn moderate incomes but lack financial security. E-commerce is seen as a way for individuals to augment their income by setting up small online ventures—something that is becoming more feasible with increased startup funding in the country’s e-commerce and marketplace sector6. This, in turn, may increase opportunities for more Thais to set up e-commerce businesses.

Agenda 2: Development of technology cluster and future industries

Thailand 4.0 emphasises the need to develop five ‘technology and targeted industries’:

  • Food, Agriculture and Bio-Tech
  • Health, Wellness and Biomedical
  • Smart Devices and Robotics
  • Digital, Internet of Things (loT), Artificial Intelligence and Embedded Technology
  • Creativity, Culture and High-Value Services

It aims to increase investment in these industries by offering incentives like corporate tax exemption for a given number of years. The government also recognises the need to reform its research system and spur R&D.

Thailand also aims to develop knowledgeable and highly-skilled manpower in these industries. On its website, the Thai embassy in Washington DC identifies7 robotics technicians and fashion designers as two examples of such manpower.

Robotics technicians and IoT specialists can help to digitize and automate many areas of logistics, such as picking and packing, labelling, and even delivery. This may lead to shorter delivery times, more accurate parcel tracking, and reduced risks of lost and stolen packages, benefitting e-commerce sellers and buyers in Thailand.

According to Austrade8, the top three categories that Thais are purchasing online are mobile and electronics, fashion, and beauty. These three fit into the technology clusters supported by Agenda 2, potentially increasing Thailand’s ability to become a source for these product categories for e-commerce merchants selling within Thailand and Southeast Asia.

For example, specialists who can develop smart devices, digital, IoT, AI, and embedded technology can create cutting-edge electronics products that can be sold online.

Creative services can also support these industries’ sales. For example, this can spur the rise of vertical e-commerce platforms in different crafts and artistic categories. A vertical platform focuses on a specific category, like groceries or electronics instead of selling a wide variety of product categories.

An early example is Pomelo9, a Thai fashion e-commerce platform that designs and manufactures the clothes that it sells. Meanwhile, biotech expertise improves beauty product development10, especially given the trend towards natural skincare and cosmetics11.

With a greater talent pool in these industries, e-commerce sellers in Thailand and Southeast Asia will be able to find local and even customisable products to differentiate their stores from the rest.

Agenda 3: Incubate entrepreneurs and develop networks of innovation-driven enterprise

Thailand 4.0 emphasises financial and technological support for startups and SMEs. It aims to increase SMEs’ contribution to the economy from the current 37 percent of total GDP to 50 percent within 10 years.

It also signals a shift towards “high-value services”, including advertising and logistics services. Boosts to these services can greatly benefit e-commerce in Thailand.

The advertising boost

Advertising is a major component of e-commerce. More entrepreneurs entering advertising could provide better services at potentially cheaper rates.

In fact, it’s impossible to imagine e-commerce businesses surviving without digital advertising and marketing. Even the country’s two largest e-commerce players, Lazada and Shopee, depend on it, with most of their Thai buyers finding their way to the platforms through Facebook and Google8.

As more e-commerce players enter the market, sellers and marketers need to master not only digital marketing and advertising strategies, but also creative content production and storytelling. Alibaba has promised to help out, intending to provide digital marketing training10 to 30,000 local SMEs.

It’s also important for e-commerce merchants to understand the market and know how to undertake audience research—something local Thai advertising and marketing agencies are well-positioned to do, given their knowledge of consumers in Thailand. Having a larger pool of advertisers could make it easier for merchants to gain this edge.

The logistics boost

And of course, entrepreneurship in the logistics sector will benefit both local and international e-commerce sellers hoping to move goods to and from Thailand.

Increased competition among service providers may make prices more affordable and challenge companies to provide faster and more reliable services. More logistics players can also increase the volume of goods that can be handled. With a focus on innovation, logistics players can test out different models, such as cross-border shipping.

Agenda 4: Strengthening the internal economy through the mechanisms of 18 provincial clusters and 76 provinces

This agenda involves planning a specific economic specialisation for different geographical areas in Thailand and developing regional innovation hubs with different specialisations. These regional hubs aim to develop initiatives like smart cities, creative economies and smart energy. This agenda also focuses on creating support initiatives for those industries, services, and innovation hubs.

With regards to e-commerce, this agenda could benefit merchants in Thailand through better connectivity, better payment options for Thai citizens and, for local Thai merchants, access to better funding.

Regarding smart cities, the Thai government’s agenda includes the development of one hundred smart cities within two decades13. This vision includes the establishment of a broadband network for all villages across the country, improving Internet access and increasing the number of potential online sellers and buyers. Fibre cable networks have already been installed in around 25,000 villages, with 50,000 more to go14 in 2019. This is part of their plan to strengthen the Thai economy’s digital backbone.

Creating smart cities also means encouraging e-payments. That’s exactly what the government is doing with its National E-Payments Master Plan15. Under this plan, the country has introduced PromptPay, which allows people to transfer funds electronically using only their mobile phone numbers or citizen ID as verification.

More than 36 million16 Thais have registered for PromptPay, making an average of 2.9 million transactions a day17. With greater access to e-payments, Thais who don’t own credit cards now have a convenient way to pay for purchases online.

PromptPay is now used in offline businesses18 around Thailand, enabling purchases by scanning QR codes. It also facilitates inter-bank payments for online purchases19, and even cross-border payments20 to and from Singapore.

This agenda also includes the Province 4.0 strategic plan which aims to transform local enterprises in terms of their productivity and capabilities. One of the initiatives here involves helping local startups via financial measures and risk management and helping them conduct businesses on digital platforms.

In summary, Agenda 4 wants to modernise Thailand’s economic infrastructure. E-commerce merchants could see a larger market as more people in Thailand are connected to the internet and have access to new payment methods. However, merchants may also increase competition from local players who are receiving government backing.

Agenda 5: Integrating with ASEAN and connecting Thailand to the global community

Agenda 5 includes supporting cross-border trading and the selling of goods to international markets. It seeks to position Thailand as a “trading nation and one of Asia’s business centres”.

One strategy within this agenda is to push for further integration in the CLMVT (Cambodia, Laos, Myanmar, Vietnam, Thailand) context. They aim21 for the border between Thailand and the CLMV territories to be “gradually perceived as bridges linking economies, trade, and investment together”.

For e-commerce players, it could mean less complexity and lower costs when selling and delivering goods across these five countries, especially in the Indochina region.

Thailand will also expand its U-Tapao airport (code: UTP), envisioning it as a regional aviation hub that will serve as a gateway to the country’s Eastern Economic Corridor22 (EEC). The EEC consists of three eastern provinces: Chonburi, Rayong, and Chachoengsao and aims to become a hub for technological manufacturing and services in ASEAN.

A high-speed rail15 will connect the three key airports of Don Mueang (DMK), Suvarnabhumi (BKK), and U-Tapao (UTP). Meanwhile, Thailand will also build and expand ports along the EEC23 to make the country a centre for trade among ASEAN, China, and India. These developments will increase the country’s capacity to move goods.

Get one step ahead of the competition

With the opportunities that Thailand 4.0 will open up, you can be a step ahead of the competition by beginning to participate in the country’s e-commerce industry.

To be well-positioned for Thailand 4.0, e-commerce sellers both in and outside of the country can:

  • Target the industries that the government aims to grow. This includes top e-commerce categories like electronics and fashion, as well as unique local goods. Thailand Post, for example, is creating e-commerce units that showcase local produce24, handicrafts, and other goods. It aims to have 25,000 of these e-commerce units25 by 2020.
  • Consider how offline stores can offer an online shopping experience. For instance, Thailand’s Industry Ministry will be encouraging 11,505 merchants26 at the famous Chatuchak Market to join Shopee. Savvy e-commerce sellers may take a cue from this strategy and partner with brick-and-mortar stores.
  • Stay up-to-date on logistical innovations in the country and the logistics service providers who can offer these. If you have the chance to offer faster shipping before your competitors do, and if the price makes sense for your business, grab it.
  • Look beyond Thailand’s major cities. Understand the challenges and opportunities of online selling to people in the villages. Establish your brand early in the villages that will be first to benefit from the broadband network by using both online and offline marketing strategies.
  • Learn digital marketing and advertising strategies and tools that can help you in Thailand. Seek out local advertising and marketing agencies with proven knowledge of Thai consumers and experience in the e-commerce space.
  • Understand the CLMVT market and how Thailand can be a hub for e-commerce operations targeting these countries.

Whether or not you’re already selling goods online in Thailand, it helps to stay updated on news regarding Thailand 4.0 and startups in the e-commerce, fintech, payments, and logistics spaces. By understanding local developments and the country’s vision, you can chart a long-term path for e-commerce success.

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Interested in Thailand's eCommerce scene? Check out our Thai eCommerce insights below:


  1. Royal Thai Embassy: National strategy Thailand 4.0 officially launched
  2. Press Reader: Thailand
  3. Aijss
  4. Royal Thai Embassy: Thailand 4.0
  5. Royal Thai Embassy: Agenda 1: Prepare Thais 4.0 for Thailand becoming a first world nation
  6. Bangkok Post: Surge in startup funding led by e-commerce, marketplace
  7. Royal Thai Embassy: Agenda 2: Development of Technology Cluster and Future Industries
  8. Austrade: Ecommerce Guide in Thailand
  9. Pomelo
  10. Cosmetics Design Europe: How Science is helping the beauty industry source natural personal care and cosmetic ingredients
  11. The Zoe Report: The 2019 Skincare Trends You'll See All Year, According To Derms
  12. Bangkok Post: Lazada to provide online training to local SMEs
  13. Open Gov: Thailand 4.0: The Smart Grid Project
  14. The Phnom Penh Post: Internet service for all Thai villages by end of this year
  15. National Media
  16. South China Morning Post: The effects of digitalisation in Thailand
  17. Bangkok Post: PromptPay transfers grow sixfold in Q2
  18. Bangkok Post: E-payment players ready to rumble
  19. Thai PBS
  20. Straits Times: PayNow to be linked to Thailand's PromptPay, among slew of initiatives announced at Fintech Festival
  21. Royal Thai Embassy: Agenda 5: Integrating with ASEAN and Connecting Thailand to the Global Community
  22. Ecco
  23. Youtube: Thailand’s Eastern Economic Corridor (English version)
  24. Thailand Post Mart
  25. Bangkok Post: Thailand Post targets community e-commerce
  26. Bangkok Post: Chatuchak shops plied with e-commerce, loans