The modern trade industry in Thailand is poised for significant growth in 2025, despite facing numerous challenges stemming from the aftermath of the COVID-19 pandemic. According to the SCB Economic Intelligence Center (SCB EIC), the sector is expected to expand by 4.6%, following a robust growth of 5% in 2024. This optimistic outlook is fueled by government stimulus measures and a gradual recovery in consumer purchasing power, particularly as the number of tourists continues to rise.
As the retail landscape evolves, modern trade businesses are adapting to meet shifting consumer demands. The SCB EIC notes that while the Thai economy shows signs of recovery, household debt remains a pressing concern, limiting the purchasing power of many consumers. Rising operational costs and intense competition from both domestic and international online platforms further complicate the retail environment.
In response to these challenges, modern trade businesses are increasingly focusing on omnichannel strategies, integrating online and offline sales to enhance consumer experience. The emphasis on sustainability is also becoming more pronounced, driven by both government policies and consumer expectations. The SCB EIC highlights that the trend toward Environmental, Social, and Governance (ESG) practices is growing, as consumers demand greater transparency and sustainability in their purchasing decisions.
Government initiatives, such as the Easy E-Receipt 2.0 program, which allows consumers to deduct their spending on goods and services from their personal income tax, are expected to stimulate spending in the retail sector. Additionally, the increase in the minimum wage to 400 baht per day in selected provinces is anticipated to boost consumer purchasing power, particularly benefiting modern grocery stores that sell essential goods.
Looking ahead, the modern trade sector must navigate a competitive landscape dominated by e-commerce giants, particularly from China, such as Taobao and Shein. These platforms offer a wide variety of products at competitive prices, posing a threat to local retailers. As a result, traditional brick-and-mortar stores are compelled to enhance their online presence and improve customer service to retain market share.
Moreover, the department store sector is also expected to see growth, with projections indicating a 4.6% increase in sales in 2025. This growth is partly attributed to the anticipated return of international tourists, which is crucial for department stores that rely heavily on tourist spending. However, the sector must remain vigilant against global economic uncertainties and changing consumer behaviors that favor online shopping.
In the health and beauty retail segment, sales are projected to increase by approximately 4.9% in 2025, driven by a growing interest in health and wellness among consumers. The trend of promoting sustainable and locally sourced products is becoming increasingly significant, as consumers express a willingness to pay a premium for environmentally friendly options.
The retail sector is also witnessing a shift in consumer behavior, particularly among younger generations such as Gen Z and millennials, who prioritize sustainability and value for money. Retailers must adapt their marketing strategies and product offerings to align with these changing preferences, ensuring they meet the expectations of a more conscientious consumer base.
Despite the challenges posed by rising costs and competition, the Thai retail sector is positioned for growth by embracing innovation and sustainability. The SCB EIC emphasizes the importance of leveraging technology to enhance operational efficiency and customer engagement, as retailers strive to create a seamless shopping experience that meets the demands of today’s consumers.
As Thailand’s modern trade industry moves forward, the focus will remain on adapting to the evolving landscape, where sustainability, technology, and consumer preferences play pivotal roles in shaping the future of retail.
