Business and general market in Thailand
ECONOMY. Thailand has a market economy for businesses driven by strong foreign investment and export oriented manufacturing especially in electronics, food and automobiles. Thailand exports 60% of GDP. Thailand experienced strong economic growth before the Asian economic crisis of 1997 with GDP growth averaging 9.4% annually. However, the crisis affected firms in Thailand and saw the value of the Thai baht fell by more than 50% against the U.S. dollar. Since the crisis, the economy has become a growth path.
Thailand's GDP was U.S. 163.5 billion U.S. dollars, with a GDP per capita of U.S. $ 2537 in 2004. Thailand's GDP grew at an average 4.6% annually since 2000 to 2004 driven mainly by exports of high technology products, especially electronics. Inflation remained below 2.0% since 2000 to 2003, but increased to 2.8% in 2004. However, unemployment trended downward from 3.6% in 2000 to 1.8% in 2004.
Nearly 60% of workers Thailand is involved in the agriculture industry but contributed to only 9.8% of U.S. GDP in 2004. The services industry contributed to 46.1% Thailand's GDP and manufacturing 44.1% during the period. The main industries are tourism, electronics, textiles and clothing, processed foods, beverages, agricultural produce, jewelry, furniture, plastics, vehicles and vehicle parts and the extraction of tungsten and tin. The main agricultural products are rice, tapioca, rubber, corn, sugarcane, coconut, soy and milk.
Demography. Ethnic Thais represent 75% of the population 65 million Thais and another 11% are Chinese or Sino-Thais who have assimilated into Thai culture or are children of mixed marriages. The minorities are Malays, who live mainly in southern Thailand and 4% of the population. Others include the Sun, Laos, Khmers, Puan Karen and minorities and immigrants from India. Nearly 95% of the population of country are Buddhists in Thailand, while the Malays are mostly Muslims. Thailand is the national language, while the languages used by minorities are Malays, Isan and red. The schools teach English, but competition is low and, in general, the educated elite is more skilled with language.
Most of the population Thai still live in rural communities, although the proportion of urban population is increasing. Urban population of Thailand increased from 22% of the population total in 2000 to 31% in 2004. The capital of Thailand and the accounts of the major cities of Bangkok for nearly 8% of the total population. Other major cities are Nonthaburi, Pak Kret, Hat Yai, Nakhon Ratchasima, Chiang Mai and Udon Thani.
Thailand succeeded in reducing poverty levels from 27% in 1990 to 10% in 2004. The proportion of the population belonging categorized into low-income household is estimated at 60%, while middle and high income households account for 30%. The average family income in Bangkok is twice that the national average.
INFRASTRUCTURE. Telecommunication services to the general public are generally adequate. Internet services are focused on broadband particularly in Bangkok. Cities and towns are well connected by roads but no highways connecting the cities of Thailand and the main cities. The major cities cities are served by the airport and well connected by bus and rail system.
INTERNATIONAL TRADE. Thailand's main trading partners are Japan, U.S., China, Hong Kong, Singapore, Malaysia and Taiwan. Thailand's main exports are electronics, vehicles and vehicle parts, textiles, garments apparel, footwear, seafood, processed foods, rice, rubber, jewelry, electrical appliances, including computers. The main imports are machinery and equipment, raw materials and finished products, consumer goods and fuels.
CONSUMER USE OF TECHNOLOGY. There were about 17.3 million phones installed in 2004, giving a penetration of 40% of all Thai households with telephones installed. The mobile phone penetration rose from just 7% of the population in 2001 to 42% or 27 million phones in 2004. The computer penetration is still low, but increased from 5.1% of households in 2001 to nearly 12% in 2004. The number of Internet users reached an estimated $ 8 million in 2004, but most Internet users are concentrated in Bangkok and major cities and towns. The penetration of television households in the 93% that indicates many low-income households have televisions.
Retail market. Industry U.S. retailer in Thailand reached an estimated 24.5 billion U.S. dollars in 2004. There are about 300,000 traditional "mom and pop" in the accounts of stores Thailand 65% of total retail sales. However, there are 4500 modern retail outlets (hypermarkets, supermarkets, department stores and convenience stores), representing 35% of total retail sales. Most modern retail outlets are located in Bangkok. Shopping in retail establishments is becoming more modern and more popular establishments expected in the near future.
Food culture. Rice is the staple food, but while in central and southern Thailand prefer the those white fragrant rice in northern Thailand prefer the glutinous variety. The Thai dishes are usually hot and spicy, but food of the northern region are generally milder. Thais are less suited to western food, even if they could afford compared to consumers in Singapore and Malaysia. However, bakery box and chain stores are gaining popularity among young professionals who have adapted to Western culture.
About the Author
Khal Mastan is a Senior Consultant with Pegasus Business and Market Advisory (http://bma.pegasus-asia.com) based in Malaysia. He involves himself in business and marketing research and provides consulting services on markets in Southeast Asia namely Malaysia, Thailand, Singapore, Indonesia, Philippines and Brunei. He has more than 20 years experience in the region and work experience in various industries. He holds a bachelors degree in Biochemistry and an MBA. He can be contacted at khalzuri@pegasus-asia.com or +6 (03) 7726 5373 in Malaysia.
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