BANGKOK — Thai Private sector concerns have emerged about foreign e-commerce businesses dumping product prices, making Thai businesses unable to compete. Therefore, they propose that the government implement regulations requiring foreign e-commerce platforms to register in Thailand for legal tax compliance.
The October 2024 survey of the Federation of Thai Industries (FTI) titled: “How will the industry deal with the penetration of low-cost e-commerce platforms in Thailand?” found that 35.1 percent of FTI executives reported a decline in sales due to the encroachment of low-cost foreign e-commerce platforms, particularly in industries such as apparel, furniture, plastic products and packaging.
Some products sold through these platforms, moreover, may not meet standards or have quality defects, causing consumers to lose money and take risks in terms of product safety. 61.7 percent of executives believe that the influx of substandard and poor quality products poses a safety risk to consumers and increases the burden of waste management.
In addition, 44.6 percent of executives stated that they cannot compete on price and are losing market share. 41.7 percent expressed concerns that these platforms could disrupt the domestic industrial supply chain and 26.9 percent said their profitability has been affected as they have had to lower prices and reduce costs to remain competitive.
M.L.Pikhong Thongyai, Vice Chairman of FTI, announced that FTI executives propose that the government set conditions requiring foreign e-commerce platform providers to register as legal entities and open branches in Thailand.
This would enable the collection of VAT and ensure strict enforcement of consumer protection laws. They also suggest that the platforms should be held accountable for the return of products if they are of poor quality or do not match the advertised description.
However, the survey found that most FTI executives believe that Thai products can still compete with cheap foreign products sold on e-commerce platforms.
They emphasize that Thai companies need to adapt by improving their products and building on their strengths, especially by improving product standards, incorporating innovative technologies into production processes and fostering business networks to promote locally made goods and expand into international markets.
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