Thailand’s Ministry of Foreign Affairs says that the country is on the verge of turning into an Asian digital behemoth. In June 2021, Thailand’s startup scene celebrated its first unicorn with Flash Group, a Thai e-commerce logistics and delivery services provider Flash Express, after the company’s Series D+ and E funding raised more than US$150 million, shooting up its total value to more than US$1 billion. Thailand also boasts other “half-unicorns” to join the coveted ranking soon. In short, the Thai economy looks set to be transformed into a cutting-edge economic powerhouse through digitalization.
Digital Industry as Prime Mover of Economy
Thailand hosts an enabling ecosystem under which startups can thrive. In 2020, Thailand’s digital industry grew by more than 10 percent at US$20.6 billion. Digital content is a robust industry in Thailand with a total market value estimated at US$1.08 billion in 2020, driven by gaming, Big Data, and animation industries. Thailand’s overall Gross Merchandise Volume hit US$18 billion in 2020, an impressive 7 percent year-on-year growth. Thailand’s digital economy will likely reach US$53 billion in value by 2025, according to Google, Temasek and Brain & Company’s e-Conomy SEA 2020 report. The Ministry of Digital Economy and Society has also fortified the capacity of local e-commerce, digital entertainment and food delivery platforms to keep up with the implosion of online shopping associated with the COVID-19 lockdown economy, in line with its Digital Economy Development Plan that began in 2016.
Thailand is an early adopter of the 5G technology digital transformation. The country’s adoption of the 4.0 economy policy augurs well for its digital aspiration, expected to contribute to more than 30 percent of its GDP by 2025 from less than 20 percent at present, opined Abel Deng, chief executive of Huawei Technologies Thailand. In Sept. 2020, Huawei launched a 5G ecosystem innovation center worth US$15 million in Bangkok and plans to invest another US$23 million to build its third data center in 2021 to satisfy growing demands in the Eastern Economic Corridor (EEC), especially from the financial sector and cloud providers.
Buoyant e-Payment System
E-payment has become the preferred choice of financial transactions for most Thais. More than half of Thailand’s population — approximately 30 million with a transaction value of over THB 260 billion (US$ 8.4 billion) — have gone cashless. The number of registered PromptPay users in Thailand has surpassed 50 million in 2020 with daily transactions exceeding US$2.5 billion. The use of mobile phone digital payment services, including PromptPay and Quick Response (QR) Code, has been growing exponentially with up to 75 percent of shoppers preferring QR Code payment, according to UnionPay and Nielsen. The Thai government has forged partnerships with Krungthai Bank to create an e-commerce platform that has been linked to the government’s e-payment gateway, Pao Tang, and Thong Fah (Blue Flag) Pracharat shops for state welfare cardholders, thereby, realizing the Thai dream of a cashless society. In 2022, investment in digital infrastructure is expected to rise by 20.5 per cent to more than US$6.6 billion and up to US$8.4 billion, thanks to rapid digital transformation and adoption of new technology.
Large banks have capitalized such growth by enabling mobile applications to support e-payments, while non-banks are launching promotions to draw in more e-Wallet users. The Bank of Thailand has implemented the fourth stage of its payments system roadmap (2019-2021) to build an ecosystem that supports digital payment as the preferred choice.
Thailand is also eyeing artificial intelligence as the next key feature of its digital economy. The Digital Government Development Agency (DGA) established a government Artificial Intelligence (AI) Centre to boost government agencies’ efficiency and services offered by focusing on three core functions: fostering networks and systems for AI adoption support; generating digital platforms in the cloud where state agencies can seek consultancy and AI solutions for their services; and upskilling government officials on AI and data analytics.
Thailand has continued to make great strides towards complete digitalization. Industry 4.0, AI, e-payment and cutting-edge technology are all but part of the daily realities for most of those who live in the country. With a strong industrial policy that favors digitalization, Thailand is on the cusp of becoming the next Asian digital behemoth through its adoption of the 4.0 digital revolution.