The FMCG market in Thailand is among the largest in Southeast Asia. Despite some contractions in recent years from new international tax regulations, Thailand’s FMCG market is still expected to expand due to the country’s
. FMCG brands, especially in the food and beverage segment, could benefit from increased brand consciousness and improve their penetration rate in the country’s growing FMCG market. In Thailand, popular FMCG brands are a pool of local and international ones. Domestic brands like Dutch Mill and Mama are taking the lead in the dairy products and the dry foods categories, respectively. Despite the COVID-19 pandemic, the FMCG sector in Thailand has shown signs of growth at the beginning of 2020.
The flow of FMCG products: distribution channels and household consumption
Urbanization in Thailand correlates with the rise of consumer income and higher internet penetration rates, providing more opportunities for the potential growth of the FMCG sector. Provision stores have recently become the
leading source of FMCG product distribution. These stores include major chains such as 7-11 as well as smaller local stores. Distributing consumer products via e-commerce mediums is also becoming more common since urbanization has led to greater digitalized environments. In addition, the distribution of
household expenditure on non-food products and alcoholic beverages such as housing items, transportation, medicine, and clothes are estimated at around 60 percent, implying that a large portion of household spending is spent on food. Recently, Thai consumers have been developing more awareness towards environmental-friendly and health-oriented products, leading to a variety of consumer goods to meet these demands, and changing FMCG brands’ strategies.
The influence of the COVID-19 pandemic on the FMCG market in Thailand
The coronavirus (COVID-19) pandemic has caused a shift within the FMCG sector. Purchase decisions for products in some categories have been delayed or stopped while there has been an increase in consumption for food products, especially for dry foods. In 2020, Thailand was among the leading countries in the Asia Pacific region in which
food delivery services have become more sought-after than pre-pandemic. Consumers are also demanding more ‘zero touch’ experiences in FMCG retail. This includes virtual reality shopping experiences, drone product deliveries, and other technologically incorporated facilitating methods. Despite the ongoing pandemic, the Thai FMCG market has adapted to the changing demands and preferences of consumers.
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