Over the last four decades Thailand has made remarkable progress in social and economic development, moving from a low-income to a upper-middle-income country in less than a generation. The economic growth and opportunities across the country are huge. According to the Asian Development Bank, Thailand’s gross domestic product (GDP) is expected to grow by  3.0% in 2020.

Rising incomes in the country are generating optimism in the population, and consumer demand is growing for a wide variety of products. With the increase in incomes  consumers, particularly wealthier ones, have been spending more on experiences, such as eating out and travelling.

The statistics above prove that there is an abundance of opportunities for international brands in Thailand. Many overseas brands have either already entered the Thai market or are now considering expanding to Thailand. Foodpanda, Grab, Tim Hortons, and Lazada are just to name a few that have already made their presence known in the kingdom.

However the existence of multiple opportunities does not mean that entering the Thai market is easy. Most markets are already developed with serious competition in existence. Besides, there are cultural, political, technological and language barriers that every newcomer will have to deal with. Let’s take a closer look at some of the challenges that international brands face expanding in Thailand: 

1. If Thais don’t know a brand, they don’t want it: According to Santander Trade Report 2019, Thai consumers are the most brand-conscious and brand-loyal in Southeast Asia. They are willing to pay more for their favourite brands even if cheaper alternatives are available and avoid switching brands. They’re loyal to brands in a variety of categories, from soaps and cosmetics to foods, beer and snacks. Companies that recognise this characteristic can build and leverage brand equity to create strong consumer pull and loyalty. But at the same time a brand must rank number one or two in its category in order to achieve strong loyalty. This attitude of Thai consumers often creates a communication challenge for new international brands with low recognition in the Thai market as Thai audiences would hesitate to try a new brand if they are not aware of it. It is also a PR challenge – media are less likely to cover topics which they do not see as already prominent or interesting for their audiences.

1. If you don’t know the right people, you can’t get anywhere: This is particularly important for PR. Relationships between PR practitioners and media professionals emphasise the bond between the two sides. The Thai practitioner-media relationship is much closer and less adversarial than in the West, with less scepticism exercised by the media. Content still drives coverage but overall, the media in Thailand seem to be much more open to all types of PR activities and they are less critical of it. Thailand is a “feminine” culture, and as such it tends to place more value on interpersonal relationships, which play a much more important role in media relations in Thailand than they do in the West. It is in fact extraordinarily different that so much of PR is based around personal media relationships and “making sure that these journalists are very happy”. But it also means that without these existing relationships and connections new brands will find it difficult to generate so much needed publicity.

1. If you are not recognised on Thai Facebook, you do not exist: A study by Statcounter (2019) found out that Thais are very social media savvy. More than 63% of Thais use Facebook. This increasing consumption of social media has given birth to a new trend in the country – micro-influencers. Thai audiences now trust influencers because of their more personal approach to sharing news about brands. They reach out to them and look to them for  recommendations and reviews. The industry has developed so quickly that Thailand currently has no lack of micro-influencers across different topics like food, lifestyle, travel, fashion, parenting. But working with these influencers requires a deep knowledge of the market and ability to manage multi-channel campaigns in Thai language. Penetrating the world of micro-influencers and establishing solid presence there is not easy.

1. If you have a major Hollywood star endorsement, it does not mean you are all set: Micro-influencers may be influential, but big celebrities still reign in Thai consumers’ minds. International brands who want to cement their foundation in Thailand should consider celebrity endorsement as a mark of local recognition. But there is a catch, Thai audiences tend to relate more to local influencers than global ones. This is why global brands which already have an international celebrity endorsement may want to think of localising their strategy and messages. Local stars are more influential than Hollywood celebrities, and in Thailand Yaya (Urassaya Sperbund) is bigger than Lady Gaga.

These are just some examples of challenges that international brands face in the Thai market. There are many more to list, besides. Some of the challenges are industry specific – companies which sell snacks will experience different problems than companies in fashion retail. But the fact that there are challenges does not mean that entering the Thai market is impossible. With experience and expertise, any challenge can be turned into an opportunity. All you need is a right local partner.