Commerce Ministry urges Thai retailers to shift to omnichannel

Thailand’s Commerce Ministry has warned the retail sector is at a structural turning point, facing intense competition and a fragile economic backdrop, while urging operators to accelerate restructuring by using data and technology to link offline and online sales channels.

Poonpong Naiyanapakorn, director-general of the Department of Business Development (DBD), said the department has analysed the outlook for Thai retail and found the sector is under pressure from structural change amid a still-fragile economy. Growth has slowed, competition remains high and businesses must manage costs tightly. At the same time, opportunities remain from the recovery in tourism and from digital adjustment—particularly for retailers that can respond to consumer behaviour that increasingly prioritises value for money and convenience.

He said household income has been recovering gradually, especially among low- to middle-income groups, but high debt burdens and living costs mean consumers are more cautious, focusing on essential items and value. Foreign tourism remains a key driver supporting sales in some categories such as food, beverages and lifestyle products, particularly in major tourist destinations.

Structurally, brick-and-mortar retail still plays a key role, especially in communities and upcountry areas. Online retail continues to expand due to purchasing convenience and easy price comparison, but it cannot fully replace physical stores. As a result, businesses must shift towards omnichannel models that integrate offline and online channels, which is becoming the new standard. Examples include expanding online ordering, online ordering with in-store pick-up, and rapid local delivery.

Thailand currently has 14,902 registered juristic persons in the retail sector with total registered capital of 136,794 million baht. This includes 930 supermarket businesses (11,119 million baht), 299 discount store/supermarket/hypermarket businesses (22,893 million baht), 1,328 convenience store/minimart businesses (23,391 million baht), 1,114 grocery shops (3,735 million baht), and 11,231 other retail businesses (75,656 million baht). More than 94% are small businesses.

New business registrations over the past five years (2020–2024) rose 32.52%, from 1,390 in 2020 to 1,842 in 2024. Business closures increased from 298 in 2020 to 332 in 2025 (January–November), reflecting pressure from competition and higher costs.

Financial performance over the past three years (2022–2024) fluctuated with economic conditions. In 2024, total revenue was 1,306,002 million baht, down 345,397 million baht or 20.92% from 2023 (1,651,399 million baht). However, net profit rose to 47,893 million baht, up 9,082 million baht or 23.40% from 2023 (38,811 million baht), reflecting improved cost control and operating adjustments.

Foreign investment in Thailand’s retail sector totalled 11,571 million baht. The top three sources were Japan (21.14%, 2,446 million baht), China (18.98%, 2,196 million baht) and Singapore (16.70%, 1,932 million baht).

Poonpong said Thai retail is at a “turning point” where long-term survival and growth will depend not only on expanding branches, but on structural adaptation, using data and technology such as customer analytics systems and AI, effective omnichannel development, and operating with sustainability in mind—factors that will strengthen competitiveness in the years ahead.