Information & Communication Technologies Thailand Market Study
FEBRUARY 2020
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EU Business Avenues in South East Asia
Central Management Unit
Thailand Market Study
February 2020
Submitted to the European Commission on 10 February 2020
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Table of Contents
LIST OF FIGURES ...... 6 LIST OF TABLES ...... 7 LIST OF ABBREVIATIONS ...... 10 1. EXECUTIVE SUMMARY ...... 11 2. WHAT ARE THE CHARACTERISTICS OF THAILAND? ...... 15
2.1 POLITICAL OVERVIEW ...... 16 2.2 ECONOMIC OVERVIEW ...... 17 2.3 TRADE OVERVIEW ...... 19 2.4 MARKET ACCESS ...... 21 2.5 BUSINESS AND COMPETITIVE ENVIRONMENT ...... 21 3. MARKET OVERVIEW AND EU ENTRY OPPORTUNITIES ...... 23
3.1 THAILAND’S INFORMATION AND COMMUNICATION TECHNOLOGIES (ICT) SECTOR ...... 23 3.1.1 Overview of the Singaporean ICT Sector ...... 23 3.1.2 Lead Agencies ...... 45 3.1.3 Key Associations ...... 46 3.1.4 Entry Strategies ...... 48 3.1.5 Challenges & Entry Barriers ...... 51 3.2 INFORMATION TECHNOLOGY EQUIPMENT ...... 54 3.2.1 Market Overview ...... 54 3.2.2 EU Entry Opportunities ...... 64 3.3 INFORMATION TECHNOLOGY SOFTWARE ...... 68 3.3.1 Market Overview ...... 68 3.3.2 EU Entry Opportunities ...... 82 3.4 INFORMATION TECHNOLOGY SERVICES...... 87 3.4.1 Market Overview ...... 87 3.4.2 EU Entry Opportunities ...... 93 3.5 TELECOMMUNICATIONS EQUIPMENT ...... 97 3.5.1 Market Overview ...... 97 3.5.2 EU Entry Opportunities ...... 102 3.6 TELECOMMUNICATION SERVICES ...... 106 3.6.1 Market Overview ...... 106 3.6.2 EU Entry Opportunities ...... 112 4. REGULATIONS ...... 116
4.1 IMPORT PROCEDURES ...... 116 4.2 GOVERNMENT TENDERS ...... 120
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4.3 THAILAND’S DIGITAL ECONOMY REGULATORY FRAMEWORK ...... 121 5. ANNEX ...... 130
5.1 LIST OF USEFUL CONTACTS ...... 130 5.2 STARTING A BUSINESS IN THAILAND ...... 132 5.3 USEFUL STATISTICS ...... 142 6. REFERENCES ...... 168
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List of Figures
Figure 1: Map of Thailand ...... 15 Figure 2: Growth in Key Thai Industries 2015-2018 ...... 18 Figure 3: EU Imports and Exports to Thailand 2016-2018 (in EUR billions) ...... 19 Figure 4: EU-Thailand Trade in Goods and Services, 2015-2018 ...... 20 Figure 5: Thailand 4.0 Visualisation ...... 23 Figure 6: World Digital Competitiveness Rankings 2019 for the Asia-Pacific Region ...... 25 Figure 7: ICT usage, 2016-2019 ...... 26 Figure 8: Computer & Internet Usage among Thai Businesses by Size and Type ...... 28 Figure 9: Four Strategies in Developing a Digital Government ...... 36 Figure 10: Conceptual Plan for Digital Park Thailand ...... 38 Figure 11: Thailand Payment Connectivity in ASEAN Source: Bank of Thailand ...... 40 Figure 12: E-Commerce Activities in Thailand ...... 42 Figure 13: Secure Internet Servers per 1 Million People in Thailand, Indonesia and Malaysia ..... 56 Figure 14: Market share by m2 of Data Centre Space in 2017 ...... 58 Figure 15: The state of Additive Manufacturing in ASEAN ...... 62 Figure 16: Olipad W811, the Latest Tablet from Olivetti ...... 66 Figure 17: Thailand’s core on the Cloud Readiness Index 2018 ...... 71 Figure 18: The DGA is Developing a Centralised Big Data Management System ...... 75 Figure 19: IoT in Thailand: Top 5 Industries for IoT market ...... 78 Figure 20: Manao Software Office in Chiang Mai ...... 86 Figure 21: Chinese Brands Storming South East Asia ...... 99 Figure 22: MikroTik Wireless Solutions Product Offering ...... 105 Figure 23: Thailand Fixed Line Subscribers ...... 108 Figure 23: Key Figures from the We are Social Global Digital Report 2019 ...... 109 Figure 25: Import procedures in Thailand ...... 116 Figure 26: Thailand Regulatory Regime for Digital Assets and Cryptocurrencies ...... 124
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List of Tables
Table 1: Ease of Doing Business in Thailand 2019 ...... 22 Table 2: World Digital Competitiveness Rankings, 2015-2019 ...... 24 Table 3: Thailand’s Rankings on Global ICT Indices ...... 25 Table 4: Percentage of internet users who reported performing certain activities using the internet ...... 27 Table 5: Estimates on ICT Workers per Economic Area, Field of Study and Company Size, as of 2017 ...... 29 Table 7: Targets for Thailand Digital Economy and Society Development Plan 2016-2020 ...... 35 Table 8: Thailand ICT Industry Export/ Import Factsheet, 2010-2018 ...... 44 Table 9: IT and Digital Market Value in Thailand ...... 54 Table 10: Examples of IT hardware companies in Thailand...... 64 Table 11: Required Steps for Registering Business in Thailand ...... 137 Table 12: Imports of Printers - for computer output, not multi-functional, separate units (HS Code 844332) ...... 142 Table 13: Exports of Printers - for computer output, not multi-functional, separate units (HS Code 844332) ...... 142 Table 14: Imports of Laptop and notebook computers (HS Code 84713020) ...... 143 Table 15: Exports of Laptop and notebook computers (HS Code 84713020) ...... 143 Table 16: Imports of Multimedia portable players - audio, video, software downloading (HS Code 847130) ...... 144 Table 17: Exports of Multimedia portable players - audio, video, software downloading (HS Code 847130) ...... 144 Table 18: Imports of Desktop computer systems, personal computers (PCs) and tower computer systems (HS Code 847149) ...... 145 Table 19: Exports of Desktop computer systems, personal computers (PCs) and tower computer systems (HS Code 847149) ...... 145 Table 20: Imports of Keyboards - for computer systems, separate units (HS Code 84716030) ...... 146 Table 21: Exports of Keyboards - for computer systems, separate units (HS Code 84716030) ...... 146 Table 22: Imports of Mouse, trackballs, joysticks for computers and other X-Y coordinate input devices - separate units (HS Code 84716040) ...... 147 Table 23: Exports of Mouse, trackballs, joysticks for computers and other X-Y coordinate input devices - separate units (HS Code 84716040) ...... 147 Table 24: Imports of Central storage units - for example RAID (Redundant Arrays of Inexpensive Disks) systems (HS Code 847170) ...... 148 Table 25: Exports of Central storage units - for example RAID (Redundant Arrays of Inexpensive Disks) systems (HS Code 847170) ...... 148 Table 26: Imports of Optical disk drives including cd-rom drives & cd-r drives (HS Code 84717040) ...... 149 Table 27: Exports of Optical disk drives including cd-rom drives & cd-r drives (HS Code 84717040) ...... 149
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Table 28: Imports of Hard disk drives (HS Code 84717020) ...... 150 Table 29: Exports of Hard disk drives (HS Code 84717020) ...... 150 Table 30: Imports of Sound cards & video cards (HS Code 84718070) ...... 151 Table 31: Exports of Sound cards & video cards (HS Code 84718070) ...... 151 Table 32: Imports of Power supply units (PSUs) for computer units, separate units (HS Code 850440) ...... 152 Table 33: Exports of Power supply units (PSUs) for computer units, separate units (HS Code 850440) ...... 152 Table 34: Imports of Network Communication System (HS Code 851762)...... 153 Table 35: Exports of Network Communication System (HS Code 851762) ...... 153 Table 36: Imports of Speakers - single loudspeaker, separate units (HS Code 851821) ...... 154 Table 37: Exports of Speakers - single loudspeaker, separate units (HS Code 851821) ...... 154 Table 38: Imports of Speakers - multiple loudspeaker, separate units (HS Code 851822) ...... 155 Table 39: Exports of Speakers - multiple loudspeaker, separate units (HS Code 851822) ...... 155 Table 40: Imports of Laser Discs for recording or reproducing video (HS Code 852190) ...... 156 Table 41: Exports of Laser Discs for recording or reproducing video (HS Code 852190) ...... 156 Table 42: Imports of Optical Media/Disks for Computer Use (HS Code 852341) ...... 157 Table 43: Exports of Optical Media/Disks for Computer Use (HS Code 852341) ...... 157 Table 44: Imports of Network Communication Devices in Wired or Wireless Network such as LAN and WAN (HS Code 851769) ...... 158 Table 45: Exports of Network Communication Devices in Wired or Wireless Network such as LAN and WAN (HS Code 851769) ...... 158 Table 46: Imports of Software on CD or DVD - programs or data, music or other sound (HS Code 852349) ...... 159 Table 47: Exports of Software on CD or DVD - programs or data, music or other sound (HS Code 852349) ...... 159 Table 48: Imports of Flash memory cards (HS Code 852351) ...... 160 Table 49: Exports of Flash memory cards (HS Code 852351) ...... 160 Table 50: Imports of Web cameras (HS Code 85258010) ...... 161 Table 51: Exports of Web cameras (HS Code 85258010) ...... 161 Table 52: Imports of Television cameras, digital cameras and video camera recorders (HS Code 852580) ...... 162 Table 53: Exports of Television cameras, digital cameras and video camera recorders (HS Code 852580) ...... 162 Table 54: Imports of Radio navigational aid apparatus (HS Code 852691) ...... 163 Table 55: Exports of Radio navigational aid apparatus (HS Code 852691) ...... 163 Table 56: Imports of MP3 players - no video capability, with radio (HS Code 852713) ...... 164 Table 57: Exports of MP3 players - no video capability, with radio (HS Code 852713) ...... 164 Table 58: Imports of Television PCI (Peripheral Component Interconnect) tuner card assemblies (HS Code 85287111) ...... 165 Table 59: Exports of Television PCI (Peripheral Component Interconnect) tuner card assemblies (HS Code 85287111) ...... 165 Table 60: Imports of Electronic personal organisers - or palm-held portables (HS Code 85437090) ...... 166
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Table 61: Exports of Electronic personal organisers - or palm-held portables (HS Code 85437090) ...... 166 Table 62: Imports of Central processing units (CPUs) - can be complete with heatsink and/or fan, separate units (HS Code 847330)...... 167 Table 63: Exports of Central processing units (CPUs) - can be complete with heatsink and/or fan, separate units (HS Code 847330)...... 167
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List of Abbreviations
AIS Advanced Information Services AIT Asian Institute of Technology ASEAN Association of South East Asian Nations BOI Thailand Board of Investment BSID Bureau of Supporting Industry BUILD BOI Unit for Industrial Linkage Development CAGR Compound Annual Growth Rate CAT Communications Authority of Thailand CGI Computer-Generated Imagery DTAC Total Access Communication DTAC Total Access Communication E&E Electronics and Electrical EHR Electronic Health Records ERP Enterprise Resource Planning FBA Foreign Business Act HDD Hard Disk Drives IaaS Infrastructure as a Service ICD International Classification of Diseases ICM Information Communications Mobile ICN Information Communications Network ICs Integrated Circuits ICT Information and Communication Technology IDC International Data Corporation IT Information Technology LOINC Logical Observation Identifiers Names and Codes MICT Ministry of Information and Communication Technology MMOG Massive Multi-Player Online Game NBTC National Broadcasting and Telecommunication Commission NSTDA National Electronics and Computer Technology Centre SaaS Software as a Service SI System Integration SIPA Software Industry Promotion Agency SME Small and Medium Enterprises TESA Thai Embedded Systems Association THIS Thailand Health Information Standard Development Centre TMT Thailand Medicines Terminology TOT Telecommunication of Thailand TTET Toyota Tsusho Electronics Thailand Co., Ltd. WTO World Trade Organization
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1. Executive Summary
In recent years, Thailand has made great strides in growing its ICT sector, moving quickly from being a secondary player in the world of technology to one of the regional leaders. Over the past decade, the digital divide in Thailand has been closing at an ever-increasing speed, with the country making significant gains in labour force education and skills building. Thailand is seeing the proliferation of technology across various demographic segments, and is taking steps to embrace a sustainable, value-based digital economy under what has become known as ‘Thailand 4.0’.
The Thai ICT sector appears to be entering a unique take-off period. A convergence of factors, including the rollout of 4G nationwide, preparations for 5G networks, government support and investment from the private sector are resulting in improved IT and telecoms infrastructure and increased demand, fuelled by Thailand’s increasingly tech-savvy population.
IT Equipment
The IT hardware market is estimated to have reached a value of THB 234.19 billion (EUR 7.04 billion)1 in 2019 with a 5% CAGR. A study conducted by the IMC institute, commissioned by the Digital Economy Promotion Agency (DEPA), showed that hardware was the largest segment in the ICT market, followed by followed by smart devices, software and digital services. Sales of notebooks and PCs have grown around 4.7% in the second half of 2019, driven by students, gaming and e-sports. There is a bright for enterprise hardware sales in Thailand, specifically for data centre equipment.
IT Software
The previously mentioned IMC-DEPA study puts the value of the Thai software market at THB 106 billion (EUR 3.2 billion) for 2019.A different research report from IDC divides software revenues in three categories, illustrating that the application development and deployment
1 As of 26 November 2019, 1 THB = 0.030 EUR
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segment experienced the strongest growth (9.4% in 2019), followed by system infrastructure (7.3%) and applications (6.9%)
Key market drivers of software sales are the supply of specific solutions offering more affordable pricing models, such as subscriptions and third-party innovations like cloud delivery models. Enterprises are likely to focus on mobility and security, as well as software solutions for productivity and efficiency improvement, including those adopting AI, blockchain and other new technologies.
IT Services
Even though it is rapidly developing, the IT services sector has not reached the same scale of the Thai hardware market. In 2018, the largest contributor to IT services spending was project- oriented services (THB 40.5 billion or EUR 1.2 billion), followed by managed services (THB 30.9 billion or EUR 930 million) and support services (THB 21.2 billion or EUR 640 million). Software services is expected to account for 20% of the total IT market in 2019, valued at THB 363 billion (EUR 10.8 billion), with digital services amounting to THB 65 billion THB (1.9 billion). Factors driving the demand for IT consulting include SMEs investing in new technology and enhanced productivity, for which they need support.
Telecommunications Equipment
The telecommunications sector represents a key focus of the Thai government’s ambitious plans to transform the country into a digital economy. Apart from its 3rd ICT master plan and the National Digital Economy Policy and Plan (2016-2020), its ICT Policy Framework lists ambitious goals such as universal broadband, developing a qualified ICT workforce and competitive industry, creating a digital government among other activities.
In terms of regional broadband connectivity, Thailand currently only hosts seven submarine cables compared to 20 in Singapore and 12 in Malaysia. The mobile penetration rate in Thailand is very high, with 71% penetration of mobile users, 92 million mobile internet subscribers, 133% penetration of mobile subscriptions and 55 million active mobile internet users.
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Telecommunication Services
The telecommunication services sub-sector in Thailand is vibrant and rapidly evolving. The country has progressed in both use and access indices, but it particularly stands out for its achievements in mobile broadband. The total generated revenue for telecommunications services is forecasted to expand from US$ 10.7 billion (EUR 8.7 billion) in 2016 to US$ 14.2 billion (EUR 11.6 billion) in 2022, growing at a CAGR of 2.9%. The growth is expected to be driven by the mobile segment, which represents over 70% of the total telecommunication services spending. In particular, the growth will be led by the mobile data services segment.
Opportunities
Emerging Technologies
The market for ICT in Thailand is expanding with multiple openings for European companies. In addition to more traditional export opportunities of ICT products and services, new technologies, such as Cloud Computing, Interactive Media, Big Data and Internet of Things, among others, represent a new, growing field. As the country leaps forward with its plans towards Thailand 4.0, businesses will be increasingly seeking for automation, efficiency and optimisation solutions in the face of growing regional, and global, competition. These ICT solutions encompass several different sectors, such as health, security, energy, manufacturing, finance, and others.
Government Support
The Thai government is actively supporting the development of ICT. In the past several years, it has taken important steps towards improving Thailand’s ICT ecosystem and helping the technology sector develop. In this context, the government has developed the ambitious ICT Policy Framework 2020, Digital Development Plan for Economy and Society, the Third ICT Masterplan and the Plan for Digital Government, and has committed itself to not only transform the public sector, but the whole Thai ecosystem.
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Based on its policy framework, transformations of the entire economic and industrial sectors, infrastructure and cities are being rolled out. Amid these initiatives, both traditional ICT and novel solutions are likely to gain traction in Thailand. Among other areas, a rising demand can be expected for online services, the Internet of Things, and innovation applications like smart vehicles and transport infrastructure, remote healthcare, and robotics.
E-commerce
Thailand is the fastest-growing e-commerce market in South East Asia. Following data from the Thai Electronics Transactions Development Agency (ETDA), the Thai e-commerce market grew 14% in 2018, and is expected to hit 20% growth by the end of 2019. By 2025, the Thai E-commerce market is expected to reach a value of US$ 13 billion (EUR 11.8 billion). This market growth is attributed to changes in consumer behaviour, the strength of Thai-international platforms supporting online shoppers and increased confidence in e-payment systems, due in part to better logistics and delivery services. The success of online players makes e-commerce an attractive option for European ICT companies seeking to test the market.
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2. What are the characteristics of Thailand?
The Kingdom of Thailand is centrally located within South East Asia and shares its borders with Myanmar, Laos, Cambodia and Malaysia. With a GDP of US$ 529 billion in 2018, Thailand is the world’s 25th largest economy and the 2nd largest economy in South East Asia. Its economy expanded by an estimated 4.1% in 2018, driven by government spending, strong private sector activities and improved exports.
Thailand has a diversified and competitive economy. As a result, the country is resilient to external and domestic economic shocks. A free- market economy and well-integrated into the global marketplace, the country has recently attained an upper-middle-class status, according to the World Bank.
The country has a population of around 69.4 million
Figure 1: Map of Thailand (2018, World Bank), with approximately half living in Source: CIA Factbook urban areas. While the greater Bangkok metropolitan area is the preeminent urban centre in the country, other sizable cities include Chiang Mai in the north, Nakhon Ratchasima (Khorat), Khon Kaen, and Udon Thani in the north east, Pattaya in the south east, and Hat Yai in the far south.
The official language is Thai. English is used in certain commercial circles and in tourist areas, but otherwise it is not widely spoken.
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2.1 Political Overview
Thailand is a constitutional democratic monarchy. The king serves as the head of state while the elected Prime Minister is the head of the government’s executive branch. An elected parliament serves as a legislative branch and the country’s judicial bodies remain independent. The Thai constitution defines the rule of law in Thailand. Political parties have been divided primarily along the lines of leftist “red shirts”, characterised by mostly rural and low-income people, and “yellow shirts”, which typically attract middle class urban population. Political participation is very high with both sides voicing concerns over economic inclusion, equality and corruption.
In addition to its role of national defence, the military has also appointed itself as a defender of the constitution. Over the years, there have been a total of 12 coups when the military set out to restore the constitution. The most recent military coup in 2014 led to the establishment of a junta by the military, called the National Council for Peace and Order (NCPO), to govern the nation. From 2014 onward, strict censorship and restrictions on freedom of speech and political activism have been imposed in the name of national unity. A new constitution was approved in August 2016 via public referendum. The constitution bestows the military broad powers over future elected governments, including fast-track means to remove elected politicians deemed as corrupt or wayward.
The 2019 Thai general election was held on 24 March 2019. It was the first election since the 2014 Thai coup d'état, and the first held in accordance with the 2017 constitution, which was drafted under the ruling military junta.
The 2019 National Assembly of Thailand consists of 500 elected members of the House of Representatives and 250 members of the appointed Senate. Its lower house was the first since the coup to be elected, while the Senate was appointed by the NCPO, the military junta that came to power in the coup. The National Assembly then voted for a prime minister, in which incumbent prime minister and coup leader Prayut Chan-ocha won over Future Forward Party leader Thanathorn Juangroongruangkit.
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2.2 Economic Overview
The Thai economy was valued at US$ 529 billion (EUR 474.8 billion) in 2018 and has a per capita income of US$ 6,610 (EUR 5,933)2. The country has long been a free-market export driven economy that balances promotion of foreign direct investment with domestic initiatives to make Thai businesses dynamic and competitive partners in the region.
Over the past few decades, Thailand has made remarkable progress in social and economic development, moving from a low-income country to an upper middle-income economy, with GDP growth averaging more than 7% from the 1950s to the 1990s. Growth slowed in 2014, although political stability and solid macroeconomic fundamentals saw the country’s economic recovery continue in 2018, as its GDP grew and income from exports increased.
In 2019, the outlook is slightly less favourable, with GDP growth reaching 2.3% from April to June 2019, compared to the same period in 2018, the slowest it had grown in 5 years. The Thai government pointed towards weakening domestic demand and slower export performance as well as the China-US trade war before announcing a 10 billion stimulus package to reinvigorate the economy.3
The Thai economy is heavily based on agriculture, which contributes around 9% of the GDP and employs more than 40% of the active population. The country is one of the leading producers and exporters of rice and also has rubber, sugar, corn, jute, cotton and tobacco as major crops. Fishing is an important activity, as Thailand is a major exporter of farmed shrimp. However, agriculture’s contribution to the GDP is declining, while the exports of goods and services have increased.
The manufacturing sector remains the economic mainstay, propelling the country forward. The sector accounts for almost 36% of the GDP and is well diversified. The main Thai industries are electronics, steel and automotive. Thailand is an assembly hub for international car brands.
2 https://www.export.gov/article?id=Thailand-market-overview https://www.macrotrends.net/countries/THA/thailand/gni-per-capita 3 https://www.ft.com/content/2e8749e0-c22c-11e9-a8e9-296ca66511c9
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Electrical components and appliances, computers, cement production, furniture and plastic products are also important sectors. The textile sector employs less than a quarter of the active population and is no longer as dynamic as tourism, which has become the main source of foreign currency. The tertiary sector, including financial services, is rising and contributes 55% of the GDP. It employs nearly 38% of the active population.
Figure 2: Growth in Key Thai Industries 2015-2018 Source: Deloitte Thailand Economic Outlook Report
Looking ahead, the Thailand 4.0 economic development strategy will be a major driver of growth, with an emphasis on innovation and competitiveness. Estimates indicate an anticipated GDP expansion of about 3.5% in 20214, buoyed by the strong promotion of new industries, high-growth areas such as the Eastern Economic Corridor, and increased spending on infrastructure development and expansion projects.
4 http://statisticstimes.com/economy/countries-by-projected-gdp-growth.php
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2.3 Trade Overview
An export-dependent economy, Thailand exported a total of US$ 249.8 billion (worth EUR 224.2 billion) of goods in 2018. The US was Thailand’s second largest export market (11.2%) after China (11.9%). The top ten export items were computers (17.2%), electronic appliances (14%), vehicles (12.2%), gems (4.9%), rubber (6.2%), plastic (5.8%), mineral fuels (4.2%), meat and seafood (2.6%), organic chemicals (2.5%) and cereals (2.3%)5.
EU-Thailand: Trade in Goods (in EUR billions) 25 22.3 20.7 22,9 20 15 15.1 15 13.6
10
5
0 2016 2017 2018 -5
-10 -7.1 -7.3 -7,7 EU Imports EU Exports Balance
Figure 3: EU Imports and Exports to Thailand 2016-2018 (in EUR billions) Source: European Commission
The EU remains an important trade partner for Thailand. In 2018, the total bilateral trade between the EU and Thailand amounted to EUR 38 billion, making the EU Thailand’s third-largest trade partner after China and Japan. Thailand is also the EU’s third-largest trading partner in ASEAN. In 2018, exports of goods from Thailand to the EU amounted to EUR 22.9 billion, with key exports being machinery and electronics, transport equipment, miscellaneous manufactured articles, and food products. The EU exports of goods in 2018 were worth EUR 15.1 billion, primarily focused on machinery and transport equipment, chemicals and related products, and manufactured goods.
5 https://www.export.gov/article?id=Thailand-market-overview
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Negotiations for an EU-Thailand Free Trade Agreement (FTA) were launched in March 2013, but stalled following the 2014 coup by the Thai military. In December 2017, the European Union’s foreign affairs council announced its intentions to resume political contact at all levels with Thailand in order to facilitate meaningful dialogue on issues of mutual importance, including on human rights and fundamental freedoms, and the road towards democracy. According to the statement by the EU, the signing of a Partnership and Cooperation Agreement and talks on the FTA could resume with a democratically elected civilian government under the new constitution.
In October 2019, the Council of the EU stated it would be open to resume negotiations for an FTA with Thailand. The director-general of the Department of Trade Negotiations in Thailand, Auramon Supthaweethum, stated studies on a Thai-EU FTA could potentially be submitted to the cabinet for approval in November 2019, and public hearings have been scheduled throughout this month
EU-Thailand: Trade in Services (in EUR billions) 8 6.5 6.8 5.9 6 3.9 3.7 4 3.3
2
0 2015 2016 2017 -2 -2 -3.1 -4 -3.2
EU Imports EU Exports Balance
Figure 4: EU-Thailand Trade in Goods and Services, 2015-2018 Source: European Commission
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2.4 Market Access
Thailand is an open market for global participation. The Thai government does not enforce regulations that completely ban or create insurmountable barriers to entry for foreign participation. As a result, the Thai market is highly competitive, with competitors from many countries. European companies looking to do business in Thailand may find it useful to utilise agents or distributors to enter the Thai market. Using agents or distributors is a common and effective way to serve the Thai market and, from here, the other countries in South East Asia.
On 31 December 2015, the ten ASEAN Member States established a common market, the ASEAN Economic Community (AEC), a boost to South East Asia’s combined economic clout as the world’s seventh largest economy. The AEC has an estimated economic value of US$ 2.5 trillion annually, powered by a fast-growing market of more than 600 million people. Being part of the AEC makes Thailand an attractive choice for firms looking to tap the growth potential of the bloc.
Thailand’s strategic location within the Greater Mekong Sub-region is also making it an attractive place for serving countries such as Cambodia, Laos, Myanmar, and Vietnam. With a substantial industrial base, population, and increasing number of multinational corporations operating there, Thailand is seen as a practical location for central operations for the Greater Mekong Sub-region.
Thailand is also one of the most important destinations of European investments within ASEAN, as the EU is the second-largest investor in Thailand, after Japan.
2.5 Business and Competitive Environment
Ease of Doing Business in Thailand 2020 Rank 2019 Rank Change in Rank
Overall Rank 21 27 +8
Starting a business 47 39 - 6
Dealing with construction permits 34 67 + 33
Getting electricity 6 6 NA
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Ease of Doing Business in Thailand 2020 Rank 2019 Rank Change in Rank
Registering property 67 66 - 1
Getting credit 48 44 - 4
Protecting minority investors 3 15 + 12
Paying taxes 68 59 + 9
Trading across borders 62 59 + 3
Enforcing contracts 37 35 + 2
Resolving insolvency 24 24 NA Table 1: Ease of Doing Business in Thailand 2019 Source: World Bank
According to the World Bank’s 2020 “Ease of Doing Business” report (completed in May 2019) Thailand now ranks 21st out of 190 economies in terms of the ease of doing business for small and medium enterprises around the world. In addition, Thailand is one of the top 10 economies that have progressed most in the ranking, going from 46th place in 2017 to 26th in 2018.
In 2019 the country adopted various reforms to make it easier to do business in Thailand. In addition to improving the regulatory framework, the government also supported the development of a comprehensive Doing Business portal providing easier and faster services for business owners. Other initiatives include an automatic risk-based system to select companies for a tax audit; reduction in the property transfer tax rate; adoption of legislation to broaden the scope of assets that can be used as collateral; and the use of geographic information systems for access to electricity.
The Thai Board of Investment (BOI) provides far-reaching tax incentives to entice foreign businesses to locate themselves in the country, especially in the agriculture, mining, light, metal, electronics, chemicals, services and technology development industries. Tax incentives include exemption from import duties, R&D incentives and exemption of corporate income tax on land and working capital depending on the activity and location.6
6 http://taxsummaries.pwc.com/ID/Thailand-Corporate-Tax-credits-and-incentives
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3. Market Overview and EU Entry Opportunities
3.1 Thailand’s Information and Communication Technologies (ICT) Sector
3.1.1 Overview of the Singaporean ICT Sector
In the Asia-Pacific region, Thailand ranks among the more advanced, higher-income countries with a growing infrastructure and strong institutional framework. In recent years, the country has made great strides in growing its ICT sector, responding to domestic demand from the financial, business and retail sectors, as well as capitalising on its role as a leading hardware exporter in the region.7
Figure 5: Thailand 4.0 Visualisation Source: HKTDC Research
7 https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---sector/documents/publication/wcms_710031.pdf
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The Thai government has laid out the Thailand 4.0 development plan, which focuses on 10 targeted industries divided into two segments — five existing industrial sectors and five additional growth engines — to accelerate Thailand's future growth. The Thai government wants to move the country into a new era defined by innovative technology-based manufacturing and services. Thailand 4.0 aims to ensure that all Thai people have access to the Internet and where 100% of the population are digitally literate to drive the growth of the digital sector to 25% of the GDP by 2020. To achieve this aim, the government is taking measures to improve labour force education and build skills to embrace this new economic model.
Thailand’s International Rankings
In the IMD (International Institute for Management Development) World Digital Competitiveness Ranking (WDCR) 2019, Thailand fell one place, ranking 40th out of 63 countries. Thailand’s rank slipped mainly due to a lack of public access to digital public services and diminished participation in public decision-making. Thailand ranks midway in the region, above Indonesia and the Philippines but below Singapore and Malaysia. The ranking, which covered future readiness, knowledge and technology showed mixed performance across sectors. However, Thailand’s ranking has not changed much over the years, ranking 42nd, 39th, 39th, and 40th from 2015-2019.8
Economy 2015 2016 2017 2018 2019
Singapore 1 1 1 2 2
Malaysia 21 24 24 27 26
Thailand 42 39 41 39 40
Philippines 45 46 46 56 55
Indonesia 60 60 59 62 56
Table 2: World Digital Competitiveness Rankings, 2015-2019 Source: International Institute for Management Development (World Digital Competitiveness Ranking 2019)
8 https://www.imd.org/wcc/world-competitiveness-center-rankings/world-digital-competitiveness-rankings-2019/
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Figure 6: World Digital Competitiveness Rankings 2019 for the Asia-Pacific Region Source: International Institute for Management Development (World Digital Competitiveness Ranking 2019)
Thailand’s global performance on other key relevant indices and rankings is further summed up in the table below:
Type of Index Thailand’s Global Ranking
WIPO’s Global Innovation Index (GII) 2019 43rd
Economist Intelligence Unit’s IT Industry Competitiveness Index 2011 50th
Tuft University’s Digital Evolution Index 2017 42nd
World Economic Forum’s Network Readiness Index 2017 61st
IMD Business School World Competitiveness Scoreboard 2019 25th
United Nations E-Government Development Index 2018 73rd
United Nations E-Participation Index 2018 82nd
Waseda University’s Digital Government Ranking 2018 20th
Table 3: Thailand’s Rankings on Global ICT Indices
Thailand is doing relatively well with new technologies too; the 2019 IMD Government AI Readiness Index put Thailand in 56th place out of 194 economies – beating Indonesia but following the Philippines (50th) and Malaysia (22nd).9
9 https://www.bangkokpost.com/tech/1719147/thailand-56th-in-ai-readiness-index
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While different rankings adopt varying criteria to evaluate Thailand’s ICT ecosystem, broadly the country has performed better in terms of affordability and usage of mobile services, as well as financial attractiveness as an investment destination, but the rankings show a lack of human resources for the ICT industry and a lagging regulatory environment, including underdeveloped national strategies on the utilisation and prioritisation of AI in government and industry.
Usage of ICT in households and businesses
ICT usage
In 2019, the Global Digital Report from creative agency We are Social and social media management platform Hootsuite put the number of internet users in the country at 57 million (82% penetration) and the number of mobile phone subscriptions at 92.33 million (133% penetration). Like several other emerging markets, Thailand is a mobile first nation and the majority of the population access the internet via mobile devices as seen from smart phone penetration at 71%, compared to only 25% of the population using computers. Average speed of mobile internet connections was 17.6 Mbps, an improvement of 29% over the previous year, while the average speed of fixed internet connections stood at 57.6 Mbps, a 48% year-on-year increase.
120%
100%
80%
60%
40%
20%
0% 2016 2017 2018 2019 Internet 56% 67% 82% 82% Computer 27% 26% 25% 25% Mobile Phone 96% 96% 98% 98% Smart Phone 64% 70% 71% 71%
Figure 7: ICT usage, 2016-2019 Source: Global Digital Report 2019 Note: Mobile Phone Includes Feature Phone and Smart Phone
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Supported by improvement in internet speeds, internet users in the country are accessing a greater variety of services. For instance, the percentage of internet users who used mobile banking rose from 41% in 2017 to 74% in 2019, while the percentage who reported making an online purchase of a product or service went up from 51% in 2017 to 80% in 2019.
Percentage of internet users who reported 2017 2018 2019 performing the following activities Used mobile messengers 59% 77% 95%
Watched videos on mobile 66% 75% 95%
Played games on mobile 53% 66% 85%
Used mobile banking 41% 56% 74%
Used mobile map services 46% 64% 80%
Visited an online retail store on the web (any device) 57% 70% 85%
Purchased a product or service online (any device) 51% 62% 80%
Table 4: Percentage of internet users who reported performing certain activities using the internet Source: Global Digital Report 2019
Business ICT usage
According to a 2018 study by United Overseas Bank, EY and Dun & Bradstreet, Thailand’s SMEs are the most active in South East Asia in terms of investment in technology to drive business performance. 73% of Thai SMEs put technology as their top priority, above investments such as machinery or factory equipment. Thai SME’s top choices included software and services such as mobile applications or digital marketing, which aligns with the country’s booming e-commerce sector. ICT hardware and network investments reached second place at 66%, followed by ICT training for employees at 53%.10
According to the latest survey from the National Statistical Office of Thailand dated 2016, only 20.6% of total business establishments in Thailand use internet in their normal work routines.
10 https://www.nationthailand.com/Economy/30356721
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The use of computers and the internet in Thailand depends heavily on the size of the establishment, with larger businesses utilising ICT more frequently. The highest proportion of internet and computer usage was observed in private hospital activities, while the lowest use was recorded in the manufacturing sector:
Computer & internet usage among Computer & internet usage among businesses by size businesses by type
99.1% 97.4% >200 Private Hospital 99.6% 99.7% 51-200 94.4% 96.3% Information & 96.3% Communication 98.1% 31-50 85.0% 88.9% 25.4% Construction 28.4% 26-30 71.0% 83.6% 22.3% Business Trade & Services 16-25 71.0% 27.1% 77.8% 15.8% 10-15 60.7% Land Transport & Storage 68.5% 19.1% 18.3% 11.0% 1-9 Manufacturing 22.5% 13.7% 20.6% Total 20.6% 24.9% Total 24.9%
Internet Computer Internet Computer
Figure 8: Computer & Internet Usage among Thai Businesses by Size and Type Source: National Statistical Office of Thailand
A study published by Maybank Kim Eng in October 2019 noted that Thailand still lags behind regional peers in digital adoption and digitalisation. Small and medium enterprises (SME) in Thailand continue to be underequipped with digitalisation skills. A 2019 survey on digital transformation conducted by Cisco Systems ranked Thailand in 11th place out of 14 countries in the Asia Pacific region in terms of digital readiness.
Thailand’s ICT Workforce
In terms of ICT workforce challenges, Thailand is facing a significant shortage of industry-ready skilled workers with the relevant technical skills. As of 2017, an estimated 386,000 ICT specialists were employed in Thailand according to the International Labour Organisation and the Thai
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Ministry of Information and Communication Technology, accounting for only 1% of total employment in the country.11
Economic area ICT workers Number of workers with Percent of workers with ICT degrees ICT degrees
Business trade and 270,635 87,190 32 services
Construction 10,247 3,177 31
Land transport and 11,692 2,652 23 storage
Hospital activities 8,232 2,141 26
Communication activities 21,133 18,714 89
Total 321,939 113,874 35
Company size ICT workers Number of workers with Percent of workers with ICT degrees ICT degrees
1-10 people 200,117 55,588 28
11-15 people 17,353 5,422 31
15-26 people 19,344 7,128 37
26-30 8,223 2,736 33
31-50 people 16,104 6,740 42
51-200 people 35,427 18,147 51
More than 200 people 25,371 18,114 71
Total 321,939 113,874 35
Table 5: Estimates on ICT Workers per Economic Area, Field of Study and Company Size, as of 2017 Source: International Labour Organisation (ILO)
Although Thailand graduates over 115,000 students in ICT-related subjects each year, many are considered to be lacking robust IT skills. According to the latest available data from the ILO, only
11 https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---sector/documents/publication/wcms_710031.pdf
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an estimated 21% of graduates are in science, technology, engineering, and mathematics (STEM) fields, compared to 79% in non-STEM fields such as education, law and social sciences.
Officials from the Association of Thai ICT Industry (ATCI) estimated in 2016 that as many as 90% of the ICT graduates each year are unable to meet the basic qualifications for companies to even begin job-specific training, highlighting a massive problem of under-skilled graduates.12 Many of these students lack basic skills like coding, or a strong foundation in core subjects, such as advanced mathematics. Furthermore, of the 10% considered to be qualified, only one out of every 10 students is deemed highly employable. Many of these employable candidates, however, often end up starting their own companies. While this contributes to a more vibrant start-up scene, it also reduces the supply of workers for established ICT firms.13 A 2019 report from the ILO stated that this trend continues with skill sets of most individuals currently employed in the ICT workforce failing to meet the standards required by employers. In addition to a shortage of highly-skilled ICT specialists, Thailand faces a shortage of semi-skilled ICT workers for providing ICT support and maintenance for networks, servers, software packages and computer equipment.
To generate the required manpower of qualified ICT professionals, costly private development initiatives, such as in-house or internal training programmes, are often conducted by large firms. The Thai government is also currently working to improve the teaching of STEM subjects in primary schools. Partnering with ATCI, it is also trying to increase the effectiveness of the teaching of ICT skill sets in schools and to revamp vocational education to increase the supply of qualified ICT workers. Industry players are also partnering with vocational schools to help ensure the relevance of their diploma programmes.
The private sector is also calling for a tightening of the standards of the ICT programmes at the universities, to ensure that these programmes are able to meet industry demand. Currently, only a small number of universities in major cities are seen to be able to meet these standards. The Thai government has singled out human capital development as a key focus in its twelfth
12 https://www.sciencedirect.com/science/article/pii/S2452315117301005 13 https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=2891&context=soe_research.
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National Economic and Social Development Plan (NESDP), as well as its Digital Thailand Plan which aims to establish a fully digitally literate Thai population by 2026.14
Current Status of the Thai ICT Sector
The IT hardware market is still the largest in Thailand, although growth in this segment is slowing down, overtaken by growth rates in the software, smart devices and digital services segments. Innovative new IT applications such as smart homes and wearables are coming from a small base, mainly addressing the premium segments. Thailand is proving itself as an attractive country for 3D printing as well, given its strong base of SMEs, local designers and large manufacturing companies. Data centre equipment is showing a particularly bright outlook, driven by the quickly increasing rate of internet use including social media platforms as well as the high growth rate of e-commerce, social commerce and mobile commerce platforms.
The value of the digital content industry in Thailand this year is expected to reach THB 33 billion in 2019 (EUR 1 billion), up 10% from 2018 due to the rising demand for animation and games globally as well as business development and promotion by the private sector and state.15
IT software production in Thailand is largely focused on software-as-a-Service (SaaS) solutions. Software spending is being particularly driven by demand for new and innovative 3rd Platform solutions, such as cloud delivery models, which offer affordable pricing models via subscription. The sector is expected to grow as a result of companies outsourcing non-core operations and focusing exclusively on their core competency.
Increasingly, Thai enterprises are becoming digitally capable, especially by transforming the ways they operate, developing products and services, and engaging with customers to stay ahead in a competitive digital economy. Enterprises are also paying increased attention to cybersecurity as well as to solutions focussing on productivity and efficiency gains such as Internet of Things (IoT),
14 https://www.itu.int/en/ITU-D/Regional-Presence/AsiaPacific/Documents/Events/2016/Apr- Digital2016/S2_Present_Pansak_Siriruchatapong.pdf 15 https://www.bangkokpost.com/tech/1730419/digital-content-to-reach-b33bn
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big data analytics and Artificial Intelligence. The banking sector is one of the early adopters of blockchain, with cryptocurrency regulations published in 2018.
In terms of the telecoms sector, Thailand has a very high mobile penetration rate, with an estimated 92 million mobile internet subscribers. The smartphone market is heavily saturated, although fixed broadband subscriptions are still expected to grow significantly. This is in line with government plans to provide universal broadband to its people in 2020.
The Thai ICT sector appears to be entering a unique take-off period, with significant growth anticipated in the demand for IT hardware, software and services, as well as telecommunications equipment and services. A convergence of factors, including significant government investment, ICT infrastructure, favourable digital policies and the expected implementation of 5G networks from 2020 are resulting in improved IT and telecoms infrastructure, as well as increased consumer and enterprise demand. Various sectors are expected to increase their ICT spending in the near future - government; retail & wholesale; healthcare; banking, financial services and insurance, among others16.
Recent Initiatives to Stimulate ICT Growth
The ICT Policy Framework 2020 (2011-2020), currently runs alongside the newly introduced Digital Development Plan for Economy and Society (2016-2020). In 2017, the government launched the Digital Government Plan 2017-2021 to develop and incorporate digital technologies in all public services. The key aspects of the government initiatives are provided below:
The ICT Policy Framework 2020
The ICT Policy Framework 2020 involves a number of development strategies and goals, which include universal broadband, a competent ICT workforce, a competitive ICT industry, and digital government, among others.
16 https://www.bangkokpost.com/business/1596158/it-services-spending-predicted-to-increase
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In terms of the national broadband policy, the precise targets laid out are to increase the percentage of the population connected from 80% to 95% by 2020, with cities and major centres, as well as all schools, linked with 100 Mbps-minimum connections by 2020.
In developing the scope of the ICT 2020 policy framework, specific focus has been paid to agriculture and service sectors – the sectors in which Thailand has a competitive advantage. The policy focus is to move towards “smart agriculture” and “smart services”, and both areas represent potential investment opportunities for European companies.17
Smart agriculture offers promising opportunities to increase productivity in the production process through user-friendly, ICT-enabled innovations. For instance, automation, e-agriculture that can function via a sensor network, and geographic information systems with a forecasting analytics for future outputs, are some of the potential areas. Given the fact that the national development goals include strengthening of agricultural cooperatives, smallholder farmers, and young farmers via ICT-enabled solutions, Thailand is likely to be receptive to development and application of ICT products and services.
Smart services also feature prominently in the ICT 2020 policy framework. Although the IT services sub-sector is addressed in Section 3.4, it is noteworthy to mention that Thailand provides good investment options in adding value to products across all industry sectors. From connecting communities to enhancing cooperation among entrepreneurs, consumers and others in the value chain, as well as providing efficiency and security management solutions, the smart services segment is expected to grow in Thailand.
Digital Development Plan for Economy and Society (2016-2020)
The Digital Development Plan (2016-2020) was launched to encourage the country to constructively make use of digital technology in the development of infrastructure, innovations, information, workforce, and other resources, in a bid to mobilise national economic and social development, and drive innovation, competitiveness and growth. It incorporates six key strategic
17 http://www.mict.go.th/assets/portals/10/files/e-Publication/Executive%20Summary%20ICT2020.pdf
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areas: development of hard infrastructure, acceleration of digital economy, promotion of digital society, improvement of digital government, workforce development, and soft infrastructure growth.
The following targets, the majority of which offer opportunities for ICT companies, have been established as 1.5-year priorities:
Category Targets
1. Deploying broadband to all villages.
2. Providing Free Wi-Fi at 10,000 locations, including Non-formal and Informal schools (reaching 2,000,000 students), Border Patrol Police Schools and Digital Community Centres all over the Infrastructure country.
3. Doubling international bandwidth to meet the demands of growing economic activities.
4. Setting up Digital Thailand Infrastructure Fund
1. Yearly fostering 1,500 digital start-ups, SMEs, and Micro SMEs, with 300 ready-to- commercialise prototypes.
2. Coaching 15,000 SMEs to trade online and standardising 100,000 product items.
3. Building at least 10,000 online community stores via digital community centres; piloting smart farms for organic product traceability; and producing 1,600 digital farmers. Economy 4. Building Tourism Thailand Open Platform (B2B) that links to global platforms for Tourism SMEs
5. Building 5 Smart Cities within 3 years (Pilot at Phuket and Chiangmai); creating Digital Industry Hub & Innovation Park; providing CCTV for public safety; and establishing Control Centre to manage environment and disaster incidents.
6. Creating data standards for the National e-Payment System.
1. Developing a Personal Health Record system (PHR) that links all countrywide hospitals to benefit at least 1,000,000 people.
2. Training digital skills and literacy
3. Providing Massive Open Online Courses for the public both in education and non-education Society settings
4. Building an English-learning mobile application/ system for all groups of people.
5. Piloting a digital package (of electricity, internet and e-Learning) in 20 most marginalised schools to bridge the digital divide.
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Category Targets
1. Developing an e-Government law that mandates digital government plan, strategy, standards, etc.
2. Establishing and upgrading Government Shared Infrastructure/ Data Centre, government cloud, and government mail system.
Government 3. Creating at least 79 smart services (to become paperless) 4. Building a platform to facilitate entrepreneurs to start businesses.
5. Developing a mobile communication system that can accommodate at least 15,000 users.
6. Providing a government one-stop portal that can be accessed via website, mobile and Smart Government Kiosk in all provinces.
Table 6: Targets for Thailand Digital Economy and Society Development Plan 2016-2020 Source: Thailand Digital Economy and Society Development Plan (2016-2020)
As part of the 10-year goals, the government wants digital sectors to account for at least 25% of Thailand’s GDP, all Thais to be digitally literate, and have access to broadband internet as a basic utility.
To manifest the development of hard and soft infrastructure, services infrastructure, e-commerce, e-education, e-society, e-industry and e-government, the country is actively searching for partners to collaborate with, representing massive opportunities for European companies.
Digital Government Plan (2017-2021)
In March 2017, the Digital Government Plan 2017-2021 was also launched, which aims to develop digital capabilities within all public services and points to likely growth of government tenders for ICT products and services. The Plan acts as a digital blueprint to revolutionise government operations, business practices and people’s lifestyles via government infrastructure improvements and data integration. The Plan includes four strategies:
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Figure 9: Four Strategies in Developing a Digital Government Source: Digital Government Plan 2017-2020
Additional initiatives
Additional initiatives have further given encouragement for the growth of the ICT sector.
◼ The Thai Government’s National Broadcasting and Telecommunications Commission (NBTC) announced it wants Thailand to be one of the first Asian countries to make the jump to 5G. According to Huawei Technologies Thailand, the country is expected to see full 5G commercial wireless broadband service by 2024, when an ecosystem has been put in place.18
◼ The Ministry of Digital Economy and Society (MDES) is rolling out the biggest government IT project, costing THB 13 billion (EUR 390 million), laying fibre optic cables to every village in the country.19
18 https://www.nationthailand.com/Corporate/30341801 19 http://www.datacenterdynamics.com/content-tracks/colo-cloud/positioning-thailand-as-a-data-center-hub/97769.fullarticle
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▪ The government’s broadband initiative to create affordable and universal national broadband network infrastructure by 2035 at minimum speeds of 30 Mbps has already seen dramatic increases in the country’s adoption of high-speed internet broadband. Broadband access is expected to reach all 70,000 villages (95% of the population) by 2035.
◼ The Thai government aims to turn 30 cities in 24 provinces into smart cities by 2020, and targets 100 cities across the country by 2022. So far, 20 cities in 9 provinces have applied for the smart city project, comprising of Phuket, Chiang Mai, Khon Kaen, Bangkok, Chon Buri, Rayong, Chachoengsao, Yala and Nakhon Ratchasima. 10 zones in 7 provinces have already begun to see smart city developments, including Bangkok Chonburi and Rayong. To support business growth in the digital sector, the government amended the regulations providing tax incentives, such as tax exemptions on import tax for machines, and corporate as well as personal income tax exemptions for Thai and foreign experts in those smart cities. Recently, Bangkok was ranked 75 out of 102 cities worldwide in the smart city rankings, according to the IMD Smart City (SCI) Index 2019.20
◼ The Thai government is heavily investing in its digital ecosystem. After launching True Digital Park in 2018, the government set ambitious plans for Digital Park Thailand, an innovation hub expected to be the flagship project of the Eastern Economic Corridor, an infrastructure project. It is planned to support major digital investments (EUR 1.14 billion per year). Eight digital clusters will be promoted in the Digital Park areas, which will encompass the following areas: computer hardware, semi/superconductor, smart device, IoT, robotics, big data & AI, intelligence platform & auto systems, immersive content, satellite & broadcast, future ultra-high broadband, and digital tech start-ups.
20 https://www.bangkokpost.com/business/1764224/bangkok-lands-at-75-in-smart-city-index
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Figure 10: Conceptual Plan for Digital Park Thailand Source: Smartcitiesworld.net
Key emerging trends in the Thai ICT market
Fintech
Thailand has a rapidly developing Fintech market, among the fastest in ASEAN. Population-wise around 74% of Thais use mobile banking, 47% make mobile payments and 9.9% own some type of cryptocurrency.21 According to Ernst & Young’s Thailand Fintech Landscape report, the country’s high internet penetration rate and high rate of underbanked people (at 22%) are key drivers of the sector growth, as consumers demand convenient and affordable fintech solutions.22 In 2019 there were 140 fintech companies registered, half of those new companies. 43% of fintech players work in digital transaction services, most of them under the guise of large banks which does discourage independent development. The country already operates innovative fintech solutions in several areas, including payment, alternative financing (such as person-to-person lending), insurance, robot advising, blockchain, personal finance management, and technical
21 https://www.slideshare.net/DataReportal/digital-2019-thailand-january-2019-v01 22 https://www.ey.com/th/en/home/ey-thailand-fintech-landscape-report
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services (business-to-business digitised workflow management). Nevertheless, the market has many new areas for expansion.
The Thai government has established legal frameworks and organisations to promote expansion of the market and diversification with clear guidelines. However, a major inhibitive factor remains unequal access to capital.23 To further promote the sector, government investments are necessary to promote connectivity, cooperation between banks and fintech firms, as well as between regulatory agencies to prevent redundancies.
A notable development is the increasing number of fintech startups in Thailand, which include Omise, a payment solutions and real-time fraud detection provider, Jitta, an investing solution, MoneyTable, a platform that simplifies financial analysis, Finnomena, an online platform providing expert advice on investments in the public market, FlowAccount, a cloud-based bilingual accounting platform for small and medium-sized enterprises (SMEs), Masii, an online comparison platform, and Sunday Insurance, an insurtech startup.24
In terms of investments, Both FinTech-focused venture capital funds and sector-agnostic funds focused on FinTech have invested regionally in ASEAN. In Thailand, there is only one Fintech- specialised investor among the most active ones in the financial services sector; SBI holdings, a Japanese firm. Looking at deal values, 500 startups, Golden Gate Ventures and Telenor are leading the market.25
Additional developments in the sector include:
◼ Cross-border payments are quickly picking up steam. Thailand has multiple agreements with ASEAN countries. In April 2019, Thailand and seven other ASEAN nations met to showcase cross-border payments utilising modern technologies. In 2020, the Thailand-Singapore
23 https://www.thailand-business-news.com/startups/74656-thailands-fintech-growth-among-the-fastest-in-asean.html 24 https://fintechnews.sg/32830/thailand/fintech-thailand-hub-ey-asean/ 25 https://gomedici.com/exploring-thailand-fintech-landscape-investment-perspective
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payment system is expected to go live, enabling Singaporeans to use their PayNoW platform to send money in real-time to Thailand’s PromptPay users and vice versa. 26
◼ In June 2019, Bank of Thailand and People’s Bank of China (PBC) signed a Fintech cooperation agreement, aiming to promote innovation in financial services. The banks will collaborate on information sharing, R&D, and regulatory coordination.27
◼ In September 2019, JD.com and Central Group, A Thai conglomerate in the merchandising, retail and real-estate sectors launched a fintech app called Dolfin. According to JD Central Fintech, a joint venture between the two players, the new service will have an e-wallet function, as well as digital lending, insurance, and wealth management offerings. The app will support credit card payments, the government e-payment system PromptPay, and e-wallet top-ups. It is partnering with large Thai banks such Siam Commercial Bank, Kasikorn Bank and Bangkok Bank. The joint venture seeks to get around 1.5 million users by Figure 11: Thailand Payment Connectivity in ASEAN the end of 2020, and is aiming to launch a Source: Bank of Thailand merchant version in that same year as well.28
26 https://www.aseantoday.com/2019/08/cross-border-payment-systems-in-asean-gather-steam/ 27 https://www.thestar.com.my/business/business-news/2019/06/10/thailand-china-central-banks-ink-agreement-on-fintech-cooperation/ 28 https://www.techinasia.com/jd-central-group-launch-financial-services-app
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E-Health
Health care reforms resulted in Thailand providing universal health coverage in 2002 through its three public health insurance schemes covering over 90% of the population. However, these developments have put an increasing pressure on the Thai health system for which digital technologies could be used to reduce costs and increase efficiency. In this context, the Thailand 4.0 strategy envisions the country as a global medical hub by strengthening medical tourism and technology industries.29 Furthermore, in 2017 the Ministry of Public Health launched the Thai E-Health Strategy (2017-2026) to transform the country into a leading e-health nation in the region by 2025.
Recent developments in the E-health sector include:
◼ In March 2019, the Thai Public Health Ministry and the National Broadcasting and Telecommunications Commission (NBTC) initiated a telemedicine programme in rural areas, as part of its Thailand 4.0 strategy to increase access to healthcare using digital technologies. The programme will use its THB 180 million (EUR 5.41 million) to install digital equipment in 32 hospitals in eight rural provinces, including Chiang Rai, Kamphaeng Phet, Phetchabun, Surin, Songkhla and Surat Thani in the first phase of the project.30
◼ Also in March 2019, Samitivej Hospital Group, one of the largest private hospital brands in Thailand announced a one-stop “Virtual Hospital” app, offering teleconsultation, blood sample testing at home and medicine delivery from one integrated platform. The Group partnered with Advanced Info Service (AIS), Line Thailand, Muang Life Assurance, Siam Commercial Bank, Sansiri and SCG cement-building to launch the app.31
◼ In October 2019, HIMSS announced it will sign a MoU with True Digital Group (subsidiary of True Corporation, a leading communications firm in Thailand) to create a HIMSS digital centre in the True Digital Park. The centre will primarily be geared towards training health professionals in healthcare ICT, providing two separate certification programs for healthcare professionals.32
29 https://www.rvo.nl/sites/default/files/2019/06/2019%20Thailand%20market%20study%20LSH%20sector.pdf 30 https://www.healthcareitnews.com/news/thailand-launches-telemedicine-programme-rural-areas 31 https://www.healthcareitnews.com/news/samitivej-launches-multi-service-virtual-hospital-app-thailand 32 https://www.thailandmedical.news/news/himss-partners-with-true-digital-to-launch-digital-health-centre-at-true-digital-park
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E-commerce
Figure 12: E-Commerce Activities in Thailand Source: We Are Social Global Digital Report 2019
According to data from the Thai Electronics Transactions Development Agency (ETDA), the Thai e-commerce market grew 14% in 2018, and is expected to hit 20% growth by the end of 2019. By 2025, the Thai E-commerce market is expected to reach a value of US$ 13 billion (EUR 11.8 billion). Thailand’s E-commerce growth is one of the strongest in ASEAN, attributed to changes in consumer behaviour, the strength of Thai-international platforms supporting online shoppers, and increased confidence in e-payment systems, due in part to better logistics and delivery services.33
According to a 2019 Google/Temasek e-Conomy Report, the top five e-commerce exports sold through cross-border trade in Thailand's comprise jewellery and watches, health and beauty products, auto parts, home and garden, and collectables. Meanwhile, popular domestic product
33 https://www.thailandmedical.news/news/himss-partners-with-true-digital-to-launch-digital-health-centre-at-true-digital-park
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categories are online travel, furniture and appliances, fashion & beauty, electronics and cosmetics and skincare. In terms of market size, Thailand ranks third, following Indonesia and Vietnam.34
In terms of channels, top-ranking mobile shopping apps include Lazada, Shopee, AliExpress, JD Central, Amazon, Ebay, Alibaba Chilindo, Zilingo and Joom in that order.35
Current developments in the E-commerce sector include:
◼ In 2018, Alibaba invested US$ 3.7 billion in Lazada, the company allocated US$ 306 million (EUR 277 million) of investment for the development of a digital hub linked to the Eastern Economic Corridor. Moreover, JD.com injected 457 million US$ (EUR 414 million) in a joint venture with Central Group in 2019.
◼ In 2019, the Thai government announced it will be introducing a Value-Added Tax (VAT) on electronics businesses in 2020, a move which is expected to collect THB 3-4 billion (EUR 90 – 120 million) in taxes.36.
◼ In August 2019, Lazada Thailand announced its partnership with GroupM Thailand to create a holistic ecosystem for Lazmall brands to grow their sales on the Lazada ecommerce platform. The partnership will leverage GroupM’s media and marketing analytics experience to drive traffic to LazMall stores.37
Thailand’s ICT Trade Trends
Thailand is a global leader in Hard Disk Drive (HDD) manufacture and exports. According to the latest available estimates from the NBTC, the country’s exports in ICT products were valued at EUR 15 billion for 2019, while import value stood at an expected EUR 26 billion in the same year.
34 https://www.blog.google/documents/47/SEA_Internet_Economy_Report_2019.pdf 35 https://datareportal.com/reports/digital-2019-ecommerce-in-thailand 36 https://www.reuters.com/article/us-thailand-tax-ecommerce/thailand-plans-e-commerce-tax-next-year-idUSKCN1VG0ZM 37 https://www.marketing-interactive.com/lazada-ties-up-with-groupm-to-bolster-ecommerce-solutions-in-thailand/
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The table below provides some key trade figures:
2010 2011 2012 2013 2014 2015 2016 2017 2018
ICT goods exports (% of total 18.9 15.6 16.0 15.6 16.0 16.6 15.8 - - exports) ICT goods imports (% total goods 14.2 11.9 11.8 11.3 12.6 13.9 14.0 - - imports) ICT service exports (% of service 1.37 1.35 0.95 0.92 0.95 0.80 0.77 0.59 - exports, BoP) ICT service exports (BoP, current 470 561 473.8 538.8 527.9 495.6 522.9 450.1 - US$ 1 million) Computer communication, and other services (% of commercial service 22.5 18.5 17.5 16.3 18.9 16.4 18.1 14.1 14.5 exports) Communications, computer, etc. (% 23.1 19.1 18.0 16.8 19.4 16.9 18.4 14.4 1.02 of service exports, BoP) Computer, communication, and other services (% of commercial service 35.1 36.1 32.1 34.9 36.2 39.2 39.2 - - imports) Communications, computer, etc. (% 35.5 36.4 32.4 35.3 36.7 39.7 39.7 35.4 10.6 of service imports, BoP) High technology exports (% of manufactured 24.0 20.7 20.5 20.1 20.4 21.4 24.0 - 23.34 exports) Table 7: Thailand ICT Industry Export/ Import Factsheet, 2010-2018 Source: World Bank (2018)
In September 2019, the Thai Cabinet approved the formation of a National Digital Trade platform. The office of Public Sector Development Commission (OPDC) and the Joint Standing Committee of Commerce, Industry and Banking (JSCCCIB) will work together with related parties to achieve the development of the platform. The platform is expected to improve the trading system and hasten the service process for private companies, thereby reducing the time and cost spent on completing transactions.38
38 https://en.vietnamplus.vn/thailand-develops-national-digital-trade-platform/160284.vnp
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3.1.2 Lead Agencies
The lead agencies in Thailand’s ICT sector are:
◼ The Ministry of Digital Economy and Society (MDES) is a responsible agency for the development of the country’s overall ICT sector. It administers, regulates and manages Thailand’s ICT policies and supports the development of technology as well as the digital economy. The MDES was established in September 2016 and replaced the former Ministry of Information and Communication Technology (MICT).
While in the past, the ICT sector was regulated by various regulatory entities, now MDES oversees computer crimes, internet content, telecom, broadcasting, electronic transactions with national security and data privacy as added areas of responsibility.
Some of the more relevant agencies under the MDES umbrella are:
▪ Digital Economy Promotion Agency (DEPA) promotes and supports the development of digital industry, innovation and the digital technology.
▪ Electronic Government Agency (EGA) provides digital infrastructure and services, including Government Cloud, Government Information Network (GIN), and other IT-related services, to over 2,000 government agencies.
▪ Electronic Transactions Development Agency (ETDA) is responsible for development, promotion and support of electronic transactions in Thailand. It conducts research and provides technical support for the Electronic Transactions Commission as well as other related agencies.
◼ National Innovation Agency (NIA) is an organisation tasked with supporting and developing Thailand’s innovation system, promoting economic restructuring and competitive enhancement. NIA functions as the key engine driving national innovation by co-creation, networking, and partnering with different organisations from various fields, such as academic, technology, industry, finance
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and investment. Its main focus is on utilising knowledge management to achieve innovation and drive the competitiveness of the Thai economy.
◼ National Science and Technology Development Agency (NSTDA) is Thailand’s national agency for Science & Technology (S&T), and one of the leading S&T centres in South East Asia.
▪ National Electronics and Computer Technology Centre (NECTEC) is an agency under the NSTDA umbrella, which is responsible for undertaking, supporting and promoting the development of electronic, computing, telecommunication, and information technologies through Research & Development (R&D) activities. NECTEC also provides linkage between research communities and industries through the established industrial clusters and programmes.
▪ Software Park Thailand is a government agency under the NSTDA, which was established to stimulate the development of the Thai software industry. It supports and strengthens the software industry through human resources, marketing, and securing investments and latest technologies. It maintains a close association with the private sector.
◼ National Broadcasting and Telecommunications Commission (NBTC) is an independent state regulatory body which was established to allocate the nation’s radio frequency and regulate broadcasting and telecommunications sectors. Although the NVTC remains a separate entity, its policy is supervised by the MDES.
3.1.3 Key Associations
The Association of Thai ICT Industry (ATCI) is Thailand’s first Information Technology professional association. Its members include computer hardware and software manufacturers, distributors and service providers, together representing over 80% of Thailand’s ICT market. With such strong representation, ATCI plays a significant role in the development of National ICT Policy and the ICT Master Plan. The specific goals of ATCI include: promoting the Thai ICT industry through business
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collaboration and sustained growth; focusing ICT human resource development; working with the government to formulate policy to stimulate ICT uses and technological advancement; acting as a representative of Thailand in the international arena to enhance the country’s reputation and to build relationships across the region. Link: www.atci.or.th
The Telecommunications Association of Thailand (TCT) was founded in 1990 to promote and develop telecommunications in Thailand. The TCT members come from a variety of sectors, including government agencies, state-owned enterprises, private companies, academia and the general public. Among its activities, the association represents the interests of service providers and other TCT members in industry events and policy circles; monitors, analyses, and disseminates information on telecommunications development in Thailand, and abroad; trains and educates telecommunications professionals; and promotes the development of telecommunications industry in the country. Link: www.tct.or.th
The Association of the Thai Software Industry (ATSI) was founded in 1998 to promote the local software industry to be more productive and conform to international standards to improve the industry’s future competitiveness. ATSI represents approximately 500 software companies in Thailand. The associations’ activities include organising meetings and seminars on industry trends, including the Thailand Software Fair and the ATSI networking night, providing a directory of resources, developing draft laws and organise activities to support IP protection among others. Link: www.atsi.or.th
The Thai Blockchain Association was established in 2018 and functions as a spokesperson for the business sector to coordinate, monitor and comment on the Blockchain technology and digital assets with government agencies, serving as an educational institution to raise awareness and strengthen understanding related to the blockchain business in both private and government sectors. To date, it represents around 12 blockchain companies. Link: www.thaiblockchain.org
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3.1.4 Entry Strategies
Prior to establishing a direct presence in Thailand, European ICT companies may wish to test the Thai market via the following entry strategies:
◼ Strategic partnerships
◼ Joint ventures
◼ Online commerce
◼ Tendering opportunities
◼ Participation in tradeshows
Strategic partnerships
Obtaining a local partner, such as agent or distributor, is often considered by European companies as preferred means of entering the Thai market, and one of the most efficient and effective ways to reach Thai buyers. The agent or distributor can facilitate and expedite market entry with their extensive market knowledge and established networks, reduce labour costs, and provide immediate on-site assistance to customers. Partnerships can also ensure effective after sales service provision.
Within the business culture of Thailand, interpersonal relationships are also a vital factor underpinning successful business transactions. Therefore, strategic partnerships can help European companies facilitate connections with strategic business stakeholders and find appropriate channels for selling their products or services.
Joint ventures
Foreign companies operating in Thailand may also find it advantageous to enter joint ventures, as this can expand distribution capacity and local service providers can assist with providing after- sales repair and maintenance services. Many Thai firms are actively seeking joint venture partners that, in addition to much needed capital, can also bring technical, marketing and
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management skills to the business relationship. In turn, Thai companies generally offer assets, such as valuable local vendor and government contacts and established business relationships in the region. In addition, in many cases, joint ventures often serve as the only way to overcome costly freight charges, high tariffs and competition from cheaper local goods via local production. This may also be a popular option for European companies seeking to gauge their product’s potential in the wider South East Asian market.
Tendering opportunities
European ICT companies can also sell their products in Thailand via direct submission of tenders to government agencies. Foreign companies are usually allowed to bid for tenders. If this is not the case, it is usually clearly stated. Opportunities for foreign exporters exist in both telecommunications and ICT sectors. However, although Thailand offers non-discriminatory treatment and open competition on government tenders, the system is not always entirely transparent.
The key to successful bidding on Thai government contracts and supply tenders is to have a reputable local representative with good access to the procuring agency and knowledge of specific procurement requirements. Without this intermediary, it is very difficult to win a government project, as procurement is decentralised among more than 200 government agencies and state enterprises. Representatives are accepted as legitimate players in the bidding process. Agents often provide an early “heads up” to foreign companies when they hear of attractive tenders. Before tenders are issued, agents help to ensure that a principal’s product will meet all of the required tender specifications.
Companies bidding on government tenders should note that training and after-sales services on all equipment purchases are important features considered in the review of all proposals. European companies should plan to build additional training costs and expenses into the bid.
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E-Commerce
The quality and reliability of online shopping services have improved significantly, and the acceptance of e-commerce has increased among the Thai population. This trend allows European companies to test Thailand’s market and the product traction online before establishing a physical presence in the region. However, companies should take note that some Thai consumers still prefer to see goods before purchasing them.
Tradeshows
Finally, specialised tradeshows often serve as a springboard for interested international companies to find relevant local partners and business opportunities. There are several upcoming events, which can offer opportunities to develop business-to-business partnerships:
Telecoms World Asia 2020 is an annual platform for leading international carriers, operators, authorities and suppliers to meet, learn and create business partnerships for wholesale revenue and growth. The event in 2020 will focus on 5 key themes: Wholesale Carriers, Network Virtualisation, Telco 4.0, 5G and new for 2020, Intelligent Connectivity in Asia. The event is expected to attract over 100 speakers, more than 50 sponsors & exhibitors, and over 1,000 attendees. It is scheduled for 25-26 March 2020, and is going to take place at the Centara Grand & Bangkok Convention Centre, CentralWorld, in Bangkok.
Broadband Forum Asia 2020 brings together the Digital TV and Broadband communities to learn, network and collaborate. Two defined tracks of content will tackle current challenges in network events and digital TV transformation, while curated networking events will give time to connect with both communities and understand how they are becoming increasingly converged. The event aims to address the industry’s need to prepare for the future demands of the connected and highly digitalised world. Attracting over 500 attendees from across the entire Asia Pacific region, and beyond, the event can be a fruitful platform to evaluate new markets and expand business in the Asia Pacific market, with many of the key decision makers
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in one place. The last edition of the event took place from 7-9 May 2019 at the AVANI Riverside Hotel in Bangkok. The 2020 event, although not confirmed, will likely take place at the same time and place.
The trade show CEBIT ASEAN Thailand - ASEAN’s Business Festival for Innovation and Digitalisation was hosted at the IMPACT Exhibition Centre in Muang Thong Thani, Nonthaburi, Thailand, on the 27th- 29th of November in 2019. The 2020 edition will most likely be organised at the same venue. CEBIT ASEAN is one of the largest B2B technology exhibitions and conferences in the South East Asian region. CEBIT ASEAN Thailand 2020 will be welcoming all key industry dignitaries, government policy makers, enterprise and government buyers, and business professionals from across the South East Asian region. The event’s key themes for 2019 were: Smart Factory, New Business Development in the Digital Disruptive Era and Lifestyle Blockchain platform. The main sectors, covered under the trade show, included communication and networking technologies, digital solutions, digital marketing and sales solutions, telematics and M2M, IoT, data centres, servers and storage, POS and banking solutions, big data analytics, business intelligence, digital office and client solutions, digital supply chain, smart e-government, cloud solutions, cyber security, unmanned systems, artificial intelligence, and virtual reality.
3.1.5 Challenges & Entry Barriers
In recent decades, Thailand has been a major destination for Foreign Direct Investment (FDI), and hundreds of foreign companies have invested successfully in Thailand. Although Thailand is officially a pro-business country, with laws intended to attract foreign investment and a constitution guaranteeing the presence of a free-market system, prospective European ICT companies may have to deal with a number of challenges and complications when navigating the Thai market. Below are some of the key barriers that the European companies should be aware of when devising their market entry strategies:
◼ Limitations on Foreign Direct Investment (FDI) and foreign participation in service sectors: The Foreign Business Act 1999 (FBA), which lays out the overall framework
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governing foreign investment in Thailand, sets out a maximum of 49% limitation on foreign ownership in all service businesses (with only company-by-company provisional exemptions). In the past few years, Thailand attempted to tighten the law even further by adding new criteria used to qualify companies as foreign referring not only to ownership limitation but also to the majority of voting rights and management controls. Apart from the FBA, a number of service sectors are also closely regulated and protected by sectoral laws under respective regulators, e.g. insurance, banking, telecommunications, transport, etc.
◼ Government participation: The Thai government may seek to participate in the ownership or operation of a business entity, if the nature of its business involves communications, radio, television, newspapers, internet service providers, defence, national security, transportation, among others.
◼ Government procurement barriers: The 1992 Prime Minister’s Office Regulation on Procurement provides a clear preference for “domestic” goods and services by using a range of initiatives that could limit the effective participation of foreign businesses in the Thai government procurement market.
◼ Insufficient Intellectual Property Rights (IPR) protection and enforcement: Despite the government’s repeated strong policy statements and occasional strong efforts in the field, the enforcement and administration of IPRs in Thailand remain inadequate in several respects.
◼ Technical barriers to trade: Thailand also maintains cumbersome third-party certification procedures (including testing in Thailand and mandatory factory inspection), which are costly, time-consuming and undermine the competitiveness of imports. This affects a wide range of goods, including electronic products and telecom equipment.39
◼ Tariff and duties barriers: Since 1 September 2006, Thailand has systematically used a theoretical value to determine the customs value instead of the declared transaction value,
39 http://madb.europa.eu/madb/barriers_details.htm?barrier_id=11162
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thus substantially increasing the amount of customs duties and indirect taxes imposed on imported products.
◼ Quality of ICT professionals: The supply of highly skilled local managers and employees with relevant industry experience is small and employers may still be forced to pay a premium to attract the right calibre of ICT employees.
◼ Strong competition: The Thai market is defined by strong competition either between global and domestic suppliers of goods and services, or by competition between large domestic firms (private and/or state), as in the telecommunications sector, which are increasingly squeezing out small and mid-sized companies.
◼ Internet control: The government has also indicated that it hopes to control the internet to the point where performance and flow of data could potentially be affected.
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3.2 Information Technology Equipment
3.2.1 Market Overview
The IT hardware market is estimated to have reached a value of THB 234.19 billion (EUR 7.03 billion) in 2019 with a 5% growth with respect to the previous year. A study conducted by the IMC institute, commissioned by the Digital Economy Promotion Agency (DEPA) showed hardware was the largest segment in the IT market, followed by smart devices, software, and digital services.40
Market Forecast Growth Forecast Growth Value 2017 2018 rate 2018 2019 rate 2019 (THB billio (THB billio (%) (THB billio (%) n) n) n) Hardware (device value in total) 216.54 223.03 3 234.19 5
Software (consumption total) 78.81 90.64 15 106.05 17
Smart Devices (device value in total) 78 101.4 30 121.68 20
Digital Services (digital operators' 36.32 48.67 34 65.22 34 income) Total 409.68 463.75 13.2 527.14 13.67
Table 8: IT and Digital Market Value in Thailand Source: Digital Economy Promotion Agency
There is a bright outlook specifically for data centre equipment, as the government has introduced tax incentives to encourage domestic and international businesses to set up data centres in the country. Major players include TCC Technology, NTT Communications, KIRZ, Servenet Solution, True IDC and SUPERNAP (Switch) Thailand, which in 2018 inaugurated in Chomburi one of the most advanced data centres in the ASEAN region. The SUPERNAP Thailand data centre is designed and built to the specifications of the industry-renowned, Tier IV Gold-rated Switch LAS VEGAS multitenant/colocation data centres in the United States.41
40 https://www.bangkokpost.com/business/1619602/survey-it-and-digital-market-projected-to-increase-13-7- 41 http://www.supernap.co.th/supernap-international-celebrates-grand-opening-advanced-data-center-asean-region/
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Factors continuing to drive demand are the quickly increasing rate of internet use, including social media platforms, as well as the high growth rate of e-commerce and mobile commerce platforms – which are all contributors to the increase in personal and other data requiring secure storage facilities to meet regulatory, privacy and other requirements.
Innovative IT applications such as smart homes and wearables are coming from a small base, mainly addressing the premium segments. However, such products are anticipated to become increasingly significant in the overall IT market in Thailand. Although its general penetration in ASEAN is low, 3D printing has great potential in the country, due to its strong manufacturing sector, high number of SMEs and key players such as Epson, XYZ printing and HP entering the market.
Thailand’s large domestic electronics industry is geared towards exports (see section ‘5.3 Useful Statistics’ for detailed statistics on exports/imports). The Electrical and Electronics Institute’s estimates for the country's shipments experienced a growth of 3.26% to US$ 64.1 billion (THB 2 trillion) in 2019 to major destinations in Japan, South East Asia and Europe. In terms of value, growth related to electronic parts was estimated at 3.55% in 2019, while growth for home appliance shipments was at 2.97%. Thailand is specialised in electronics parts manufacturing such as hard disk drives and integrated circuits. Although there have been some decreases in exports due to the US-China trade war, Thailand’s electronics sector remains a major supporting industry for IT hardware and accounts for 24% of overall export value.42 There are 2,419 companies in the electrical and electronics industry and the sector employs 753,357 employees in Thailand.43
Despite recent economic slowdowns in both Thailand and China, Thailand’s position of being a key assembly point for component value added manufacturing is stable and is expected to strengthen. Finished product manufacturing of higher value-added equipment and devices is also
42 https://www.bangkokpost.com/business/1625394/exports-forecast-to-grow-3-26-in-2019 43 Ibid.
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slowly shifting towards Thailand’s market due to strong foreign investment and competitive market dynamics (including competitive labour costs and a highly-developed manufacturing sector).
There are no FDI restrictions in place for the electronics industry, where 100% foreign ownership is permitted. Manufacturing, including electronics and financial and insurance activities attract nearly 70% of all FDI inflows.44
IT equipment exporters should note, however, that high tariffs can become a barrier for entering the Thai market. Unfinished and intermediate products have a higher tariff than finished products. Thailand also levies 5% of tariff on most primary products, 10% on intermediate products and 20% on finished products, with 30% on those special goods that need protection (see Section 4: Regulations for more information).
Servers and Infrastructure
6000
5000
4000
3000
2000
1000
0 2010 2011 2012 2013 2014 2015 2016 2017 2018
Thailand Indonesia Malaysia
Figure 13: Secure Internet Servers per 1 Million People in Thailand, Indonesia and Malaysia Source: The World Bank
44 https://en.portal.santandertrade.com/establish-overseas/thailand/foreign-investment
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Thailand is a relatively immature server market, which is reflected in the relatively low density of secure servers.
The market, however, is growing fast, with vendors and service providers increasingly looking to meet the growing demand for cloud computing services and content provision, which is likely to result in server spending growth.
The APAC data centre market is expected to see investments valued at around US$ 10 billion by 2023, growing at a CAGR of more than 12% during 2017-2023. The total data centre market in ASEAN has been forecasted to grow from US$ 1.9 billion in 2017 to US$ 5.4 billion in 2024 at a CAGR of 16.1%.45 With significant regional growth opportunities, investors are starting to pay attention to Thailand as a potentially lucrative space for the data centre market. The demand for data centre services is projected to expand significantly, driven by Thailand’s digital transformation plans, the rise of hybrid-cloud and multi-cloud adoption by Thai enterprises, favourable government policies, growing internet penetration, as well as increasing cyberthreats in the country and in the broader region.46
Although hosting in-house data centres remains customary, companies are starting to realise the benefits of secure data centre spaces and outsourced data centre systems. According to Dell EMC, the new Personal Data Protection Act will stimulate spending on data protection technology, at an expected double-digit rate. Data loss is particularly expensive for companies in the Asia- Pacific, as 20 hours of downtime in 2018 cost businesses around US$ 494,869, while companies that lost data lost an average of 2.04 terabytes, costing the companies US$ 939,703.47 The growing interest in disaster recovery solutions is also accelerating the adoption of outsourced data centre services.
Thailand is also drawing attention as a base for reaching the Greater Mekong Sub-region (GMS).48 The appeal of the GMS lies in its substantial industrial base, population, and the
45 https://www.prnewswire.com/news-releases/asia-pacific-data-center-colocation-market-2018-2023-market-is-projected-to-witness- investments-worth-around-10-billion-300729602.html 46 http://www.datacenterdynamics.com/content-tracks/design-build/thailand-prepares-for-fast-growth/97695.fullarticle 47 https://www.bangkokpost.com/business/1664268/pdpa-to-boost-spending-on-data-protection-tech 48 Greater Mekong Sub-region (GMS) consists of Cambodia, Laos, Myanmar, Thailand, Vietnam and small part of China.
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increasing number of multinational corporations operating there. Although the two leading data centre market players in the wider ASEAN region are Singapore and Hong Kong, both are increasingly facing future land shortage, thus, fuelling interest in Thailand as a key emerging market to serve the GMS.49
At the beginning of 2017, Thailand counted around 30 DC operators in the country, but collectively as an industry, the country delivers the capacity of less than 500,000 square feet. Large proportions of these sites are delivering very low floor area and low power density per square foot.50 Compared to the ASEAN leaders, Singapore and Malaysia, the country has a lot of room for expansion.
Figure 14: Market share by m2 of Data Centre Space in 2017 Source: BroadGroup
Most data centres in Thailand are Tier III. The country has approximately 11,000 racks available nationwide, with more than 30% storage capacity left to serve the market. According to Cloudscene, Bangkok hosts the greatest number of providers in the country, with 22 co-location data centres, 33 cloud service providers and 1 network fabric.51
49 http://www.jll.co.th/thailand/en-gb/news/594/data-centres-create-new-real-estate-opportunities-in-thailand 50 http://www.datacenterdynamics.com/content-tracks/design-build/thailand-prepares-for-fast-growth/97695.fullarticle 51 https://cloudscene.com/market/data-centers-in-thailand/bangkok
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Key players in Thailand providing DC services include CS Loxinfo, TCC Technologies, Switch, NTT, True Corporation and KIRZ.52 Retail colocation and cloud data centre operators in Thailand are yielding return on invested capital (ROIC) on par with regional peers, such as Malaysia and Singapore, with one of the largest data centre providers CS Loxinfo yielding ROIC of around 8-9%. In 2019, Frasers Property (Thailand) Public Co and Telemedia Global Data Centres (STT GDC) launched their first hyperscale data centre, covering a 30,000 sqm gross floor area with an investment of more than THB 7 billion (EUR 233 million). Construction for phase 1 will be completed in 2021.53
As part of its Digital Economy Initiative, the government has also issued a strong policy to promote data centre business. Several local and international players have recently taken advantage of the attractive investment policies set by the government, such as tax privileges and preferential electricity rates, and have established data centres in Thailand. For example, the US-based data centre operator Switch recently opened the largest centre in Thailand, a Tier-IV DC with a capacity of around 60 MW.
As Thailand garners the attention of global data centre operators, local operators may need to upgrade their service offerings and facilities to match those of international operators as customers will likely be willing to pay premiums for reliability, security, and other add-on services on offer by international players.
PC, Tablets and Peripherals
Sales of notebooks and PCs have grown around 4.7% in the second half of 2019, driven by students, gaming and e-sports54 as well as the strengthening Baht. An interesting recent development is represented by computer makers and IT retailers moving into the gaming equipment market as this segment is experiencing a marked upward trajectory. Gaming notebooks are estimated to account for 40% of the 600,000 overall local notebooks sold in 2019,
52 DBS Asian Insights (November 2017). Data Centre & Cloud: Divestments and M&As to Accelerate in 2018 53 https://www.frontier-enterprise.com/frasers-property-thailand-st-telemedia-to-build-thailands-largest-hyperscale-data-centre/ 54 https://www.nationthailand.com/premium/30373344
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compared with 30% in 2018 and 10% in 2017.55 Thai consumers tend to prefer middle to high range products, as lower-end notebooks and PCs are being outcompeted by the smartphone segment – this is confirmed by data from the Thai National Statistics Office (TNSO). TNSO’s statistics indicate that PC ownership per 100 households has declined in every region in 2016, regardless of the existing level of penetration. There is, however, a divergence of buying intentions across regions, with households in North-Eastern Thailand twice as likely to buy a PC as those in Bangkok. This means there could be first-time buyer potential in the provincial and rural areas. Many households reported not having a PC as it was deemed unnecessary, seeing as the majority of households used their mobile devices to access the internet.56
In terms of consumer groups, vendors are now targeting primarily the mid- and high-value consumer groups, where upgrade/replacement demand is strongest, and they are able to target higher value (and higher margin) device sales. There is also a substantial student and first-time buyer market for affordable models, but with strong competition from tablets even first-time notebook buyers have increasingly high expectations regarding functionality and performance.
Thailand’s PC industry is dominated by international players and there are no Thai desktop or notebook producers. The key players in Thailand’s PC market are Acer, Dell, Lenovo, Hewlett- Packard (HP), and ASUS. Lenovo is the PC market leader in Thailand, capturing 25% of global market share in 2019 compared to 22.22% for HP and 16.9% for Dell.57
Although starting from a low market share in Thailand (around 2%), in 2019 ASUS announced plans for ranking among the leading vendors in Thailand within three years. The company budgeted more than THB 120 million (EUR 3.6 million) on marketing in 2019.58
The printer and projector markets are declining or seeing flat growth in Thailand. In 2018, the overall market shrank by 1-2%. In terms of printer purchasing, the sharpest falls were for spending
55 https://www.bangkokpost.com/business/1707178/computer-sales-headed-for-h2-rebound-on-gaming 56 http://www.nso.go.th 57 https://www.gartner.com/en/newsroom/press-releases/2019-07-11-gartner-says-worldwide-pc-shipments-grew-1point5percent-in-second- quarter-of-2019 58 https://www.nationthailand.com/Corporate/30370226
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on standalone inkjet and laser printers as the sales mix continued to shift towards multifunctional devices, which after declines in price have come to take a much larger share of the market.
Spending on copiers and printers is anticipated to remain flat over 2017-2021 period, due to pressures on retail and enterprise printer spending from the trend towards paperless offices and meetings, and environmental activities59.
Smart Devices
Management consultancy AT Kearney predicts the regional Asian market for smart homes will hit nearly US$ 120 billion by 2030, amounting to more than 25 percent of the global smart home market. While Singapore remains in the lead, Thailand is catching up with significant improvements in its telecommunications infrastructure such as maturing narrow-band IoT (NB-IoT) systems and long-range wide-area networks (LoRaWAN).60
According to data from Statista, the Thai smart home market amounted to US$ 111 million in 2019, a number which is expected to grow to US$ 350 million by 2023 with a 33.1% CAGR. Household penetration is still low, with 2.0% of homes possessing a smart device in 2019 – however, this is expected to rapidly increase to 7.1% in 2023.61
Smart home solutions in South East Asia and Thailand focus on home security, ambient assisted living, energy saving and automation. Demand for these solutions is primarily driven by the higher income segments, such as developers constructing luxury apartments and commercial buildings, hotel brands adopting new technologies to enrich guest experience and security providers improving their services with smart technologies.62
59 https://www.nationthailand.com/Corporate/30361859 60 https://www.asiapropertyawards.com/hyper-connected-homes-elevate-art-of-smart-in-thailand-and-singapore/ 61 https://www.statista.com/outlook/279/126/smart-home/thailand#market-globalRevenue 62 https://www.asmag.com/showpost/26476.aspx
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3D Printing
Following a study conducted by ThyssenKrupp, there is great potential for 3D printing in the ASEAN region. Although additive manufacturing (AM) penetration in ASEAN today is small, given their contribution to global manufacturing, AM is expected to generate US$ 100 billion (EUR 90.3 billion) of incremental value by 2025.63
Figure 15: The state of Additive Manufacturing in ASEAN Source: thyssenkrupp.com
According to XYZprinting, a subsidiary of New Kinpo Group, Thailand has the potential to be the core market and manufacturing hub in ASEAN for 3D printing. Apart from positive economic conditions in the country, the high number of local designers and SMEs make it an attractive market for 3D printing companies.64 HP is an example of a global company recognising this
63 https://www.thyssenkrupp.com/en/newsroom/press-releases/additive-manufacturing-to-generate-us-100-billion-economic-value-in-asean--by- 2025-12804.html 64 https://www.nationthailand.com/Corporate/30331432
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opportunity and entering the field, putting Thailand among the countries where HP 3D Jet Fusion Printing solutions are available.
According to XYZprinting, Thailand is witnessing strong demand from individual designers and do-it-yourself customers, as well as printing factories looking to reduce costs and raise efficiency in their manufacturing process. The biggest threat to the market is perceived as the lack of knowledge about 3D printing technology. XYZprinting is rolling out education programmes in schools, gaining exposure through events and social media to raise awareness on their products. Another player, Metro Systems Corporation (Thailand) invested THB 10 million (EUR 300,000) in a 3D printing demonstration centre in 2017 that lets customers experience how 3D printing technology can be applied to auto parts, healthcare, engineering and education.65
Local Players
The below table lists Thailand-based companies operating in the IT hardware market including retailers, distributors, as well as manufacturers for computers, notebooks, printers, and computer accessories.
Company Name Area of Expertise Company Website BaNANA IT Banana IT has several branches around Bangkok and www.bananait.com Thailand. Notebooks, PCs, CPUs, mainboards, graphic cars, RAM memory, monitors etc. Authorised dealer for Sony, Apple, Acer etc. Bara Advanced Bara Advanced Infotech Co. Ltd. ranks as the top vendor of www.baraadv.co.th InfoTech Co. Ltd. COMPAQ PC and IBM eServer pSeries (RS/6000) systems in Thailand. Com7 Public Co. Ltd. Com7 has grown into a leading retailer, importer and distributor www.comseven.com of computer and IT-related products. Products include Apple devices, smartphones, tablets, notebooks, desktops, computer components such as CPUs, hard drives, network accessories. Dell Thailand Dell computers in Thailand. Tablets, laptops and desktop www.dell.co.th computers. Several outlets in Bangkok and Thailand. Available at IT City Pantip Plaza and Fortune Town.
iStudio and iBeat by Distributor of Apple products, such as Apple Watch, iPod, iPad, www.maccomseven.com ComSeven iPhone, accessories. iCare as an Apple authorised service provider.
65 https://www.scmp.com/tech/article/2111971/hp-deal-delivers-3d-printing-thailand
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Company Name Area of Expertise Company Website iStudio by iStudio by Copperwired has various outlets in Bangkok: J- www.copperwired.co.th Copperwired Avenue, Siam Paragon, CentralWorld, Siam Discovery, Silom Complex, Digital Gateway. Apple products such as iPod, IPhone, Mac computers, and accessories. IT City Public Co. IT CITY is a superstore, selling computers, peripherals and www.itcity.co.th Ltd. other related information technology products (One Stop Shopping IT Products) under the trade name IT CITY. Several large stores around Bangkok (Pantip Plaza, Siam Paragon, Fortune Town etc.) and Thailand. EnergyIoT EnergyIoT was founded by a group of experts with over www.energyiot.co.th 20 years’ experience each in energy, industry, electronics business, engineering and ICT. The company offers design and implementation at any point of the IoT value chain with access to its solution partners. Energy IoT has been appointed as the authorised distributor of Libelium wireless sensors and IoT products for Thailand. Login Technology Logintech On line shop for PCs, netbooks, laptops, Apple www.login.co.th and Computer Co. computers, digital cameras, printers, scanners, televisions etc. Ltd. SVOA Plc. SVOA produces and/or distributes desktop and workstation www.svoa.co.th computers, notebooks, projectors, printers, scanners, digital photography products, cutting machines, engravers, software, computer accessories. Table 9: Examples of IT hardware companies in Thailand
3.2.2 EU Entry Opportunities
◼ The main opportunities for PC vendors in Thailand are targeted, mid- and high-value personal device sales – with hybrid notebooks expected to outperform. This group of more affluent consumers exhibits shorter replacement cycles, and is more likely to replace devices for new features and designs. It should also be noted that there is a substantial student and first-buyer market for affordable models. However, as competition from tablets is strong, even first-time notebook buyers have increasingly high expectations regarding functionality and performance.
◼ Thailand has a large gaming population, and local gamers are willing to invest on equipment and accessories for the best gaming experience. Gaming notebooks were estimated to account for 40% of the 600,000 overall local notebooks sold in 2019, compared with 30% in 2018 and 10% in 2017.
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◼ There is a bright outlook for enterprise hardware sales, specifically for data centre equipment. Thailand’s government introduced tax incentives to encourage domestic and international players to set up their activities in the country. The government, through its Board of Investments, has also launched several promotional packages for foreign companies to partner in joint venture with local businesses in order to encourage technology transfer. As a result, European IT equipment companies which cater to the data centre requirements are likely to find growing demand for their products.
◼ With increasing competition from South East Asian players, Thai local manufacturers are seeking efficiency generating IT products and solutions to remain competitive. Automation and efficiency optimising IT solutions are likely to represent a significant opportunity. Some of the international players, such as Lenovo, have already launched targeted growth strategies to capitalise on the needs of the manufacturing sector.
◼ Vendors and service providers are increasingly looking to meet the growing demand for cloud computing services and content provision, which are likely to result in greater spending on servers.
◼ Smart devices are predicted to become increasingly significant over the medium to long- term, although coming from a small base. The Thai smart home market amounts to US$ 111 million in 2019 and is expected to reach US$ 350 million by 2023 with a 33.1% CAGR. Concentrated in premium segments, European companies able to support large scale luxury commercial developments and hotels with smart technology could find opportunities here.
◼ Thailand has the potential to be a core market and manufacturing hub in ASEAN for 3D printing. The country has a large manufacturing sector, printing industry and the high number of local designers and SMEs make it an attractive market for 3D printing companies. Given the breadth of applications of 3D printing, it may be particularly relevant for the country’s well-developed auto parts industry.
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European Companies
Ultimaker
Ultimaker is a 3D printer-manufacturing company based in the Netherlands The company manufactures FFF 3D printers, develops 3D printing software, and sells branded 3D printing materials. Their product line includes the Ultimaker S5, Ultimaker 3 series, Ultimaker 2+ series and Ultimaker Original+. These products are used by industries such as automotive, architecture, healthcare, education, and small-scale manufacturing. In Thailand, Ultimaker’s products are sold by Septillon, a reseller specialised in 3D printing technologies.
Olivetti
Olivetti is an Italian information technology player and manufacturer of typewriters, computers, tablets, smartphones, printers, calculators and fax machines. Headquartered in Turin, Italy, the company has been part of the Telecom Italia Group since 2003. The company relies heavily on distribution of its products via indirect sales network of dealerships, VAD dealers, solution partners, distributors and resellers. It has direct sales representation and an indirect network of dealers and distributors in 83 countries, including Thailand.
Figure 16: Olipad W811, the Latest Tablet from Olivetti Source: Olivetti
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Archos
Archos is a French multinational electronics company, established in 1988. It manufactures tablets, netbooks, smartphones, portable media players, recorders, portable data storage devices, and other digital consumer products. Among others, the French manufacturer was first with an HDD MP3 player in 2000, a multimedia player in 2003, Google Android powered tablets in 2009, a connected Smart Home in 2014 and PicoWAN, the first collaborative network dedicated to the IoT, in 2016.Today, ARCHOS designs and democratises solutions with high innovation value in three segments: mobile solutions, AI and blockchain The company has expanded into the South East Asian market via its network of distributors. In Thailand, it distributes its products via Genesis MediaComCo Ltd., which is located in Bangkok.
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3.3 Information Technology Software
3.3.1 Market Overview
The previously mentioned IMC-DEPA study puts the value of the Thai software market at THB 106 billion (EUR 3.2 billion) for 2019.66
A different research report from IDC divides software revenues in three categories, illustrating that the application development and deployment segment experienced the strongest growth (9.4%) in 2019, followed by system infrastructure (7.3%) and applications (6.9%).67
Key market drivers of software sales are the supply of specific solutions offering more affordable pricing models, such as subscriptions and third-party innovations like cloud delivery models. Enterprises are likely to focus on mobility and security, as well as software solutions for productivity and efficiency improvements.
A potential threat towards software package sales in particular is the use of unlicensed or pirated software by Thai firms. However, according to the Business Software Alliance (BSA), a non-profit trade group spearheaded by Microsoft, the Cybersecurity Act and Data Protection Act which both came into force in 2019 should ensure a faster decline of unlicensed use. In 2018, 395 unlicensed cases were reported, totalling THB 661 million (EUR 20 million).68
The software industry enjoys extensive government support, with incentives for digitalisation and a Digital Government plan (2017-2021) to promote digitisation and cloud adoption in public agencies, as well as the Thailand 4.0 initiative which sees large investments in technology to support Thailand’s transformation to a knowledge-based economy.
Applications are set to reach 8.0% CAGR with an expected value of THB 21 billion (EUR 630 million) by 2022. Applications take up nearly half of the software market as they are
66 https://www.bangkokpost.com/business/1619602/survey-it-and-digital-market-projected-to-increase-13-7- 67 https://www.bangkokpost.com/tech/1636510/thailand-software-spending-to-reach-b40-9bn 68 https://www.bangkokpost.com/tech/1644268/bsa-expects-drop-in-unlicensed-software
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important for large organisations. The top two software categories within the applications market are collaborative applications with a year-on-year growth rate of 14.2%, followed by customer relationship management (CRM) at 7.9%.69
System infrastructure software captures a 36.1% share of the software market. Key push factors for the market are the need to manage applications and infrastructure in an increasingly dynamic environment with digital and customer-facing applications. The market intelligence company IDC forecasts the system infrastructure market will reach THB 17 billion (EUR 510 million) by 2022, recording a 5.7% CAGR. IDC predicts that the fastest-growing software categories within the system infrastructure segment will be system and service management followed by storage software.
Thailand is beginning to prioritise application development and deployment, as it currently captures a 22.2% market share but recorded a high 9.4% growth rate from 2018 to 2019. The main category within the app development and deployment segment is application platforms with 38.3% growth forecast, followed by analytics and AI (9.8%). The overall segment growth is expected to reach 10.2% CAGR to THB 12 billion (EUR 360 million) by 2022.70
Enterprise Software Solutions
The Asia-Pacific ERP software market size was approximately US$ 9,669 million in 2018, and is projected to reach US$ 26,370 million by 2026, growing at a CAGR of 13.3% from 2019 to 2026.71
Key players in the Thai Enterprise Resource Planning (ERP) software solutions industry largely mimic global dynamics, with SAP, Microsoft, Oracle and Epicor among the main players.
Local software firms are very competitive – in 2018 Thailand ranked number 1 in ASEAN for a third straight year in terms of the number of software firms receiving a “Capability Maturity Model Integration” (CMMI) certification, with 33 CMMI certified developers in Thailand in 2018.72
69 https://www.bangkokpost.com/business/1636510/thailand-software-spending-to-reach-b40-9bn 70 Ibid. 71 https://www.alliedmarketresearch.com/asia-pacific-erp-software-market 72 https://www.bangkokpost.com/business/1555722/thailand-paces-region-in-cmmi-certified-software
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Recent developments include the following:
◼ In June 2019, manufacturing company QAD released its new addition to its software in preparation for a 5G-connected future, which in Thailand is expected from 2020. QAD’s flagship product is an ERP software. The US-based QAD has 30 years of experience in Thailand and employs seven people in the country. Globally, QAD has about 400 employees in 52 countries, handling 35,000 users.73 Recently, QAD announced that DKK Thailand, a large electronics manufacturing company, will upgrade its ERP solution to QAD’s adaptive ERP software solution.74
◼ In September 2019, NokScoot Airlines, a Thai company, got the first Real Cloud ERP in Asia, which is an ERP solution designed for the aviation industry. The ERP system includes solutions for sales and marketing, supply chain management, finance, human resource management, supplier relationship management and production, enabling employees to work aggregately.75
Cybersecurity Solutions
In Thailand, there were 2,520 cyberattacks in 2018. The main three types were intrusion attempts, fraud and actual intrusions.76 Thailand's cybersecurity spending was estimated to see a 20-30% during 2018-19, driven by faster and more complex, targeted attacks enabled by artificial intelligence (AI) and increasing use of the Internet of Things (IoT) in critical infrastructure and cloud security. In 2017, the local cybersecurity market for hard- and software was valued an estimated US$ 61 million (EUR 55 million).77
In 2018, security software company Symantec identified Thailand the 7th worst in Asia-Pacific for cybersecurity threats, and the 18th globally, which amounted to a fall from the 25th position in 2016.
73 https://www.bangkokpost.com/tech/1698432/qad-ready-for-5g-age-with-erp 74 https://www.enterprisetimes.co.uk/2019/07/16/qad-scores-repeat-success-in-thailand/ 75 https://www.nationthailand.com/business/30376276 76 https://www.bangkokpost.com/tech/1698336/thai-cybersecurity-ranking-dips-to-35th 77 https://www.bangkokpost.com/business/1595390/cybersecurity-spending-to-rise
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The country was found ranking lower across the IT security spectrum, dropping to 12th for SPAM email infiltrations, 21st for ransomware attacks and 11th for network attacks.
Demand for cybersecurity solutions is expected to increase significantly, especially given that banks and enterprises will continue to invest in digital transformation projects to remain competitive and businesses shift to cloud-based security solutions, having previously only invested in cloud services.
The Thai government is also increasingly investing in cybersecurity, in line with their Thailand 4.0 policy and the recently approved Data Protection and Cybersecurity acts. The government has opened a cybersecurity centre named ASEAN-Japan Cybersecurity Capacity Building Centre (AJCCBC) to help solve human resource requirements for cybersecurity, particularly the governmental agencies.
Cloud Computing
In South East Asia, revenue for the cloud computing market is estimated to reach US$ 40.32 billion by 2025, as a result of an increased demand for cloud computing among small and medium-sized enterprises (SMEs).78 According to The IDC CloudView Survey in 2018, 54% of Thai organisations already have workload portability from hybrid cloud capabilities in place, running applications in multiple environments.
Figure 17: Thailand’s core on the Cloud Readiness Index 2018 Source: Asia Cloud Computing Association
78 https://www.cio.com/article/3397054/the-state-of-cloud-computing-in-southeast-asia.html
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In terms of Cloud Readiness, Thailand maintained its 2016 rank of 10th in the Asia Cloud Computing Association’s Cloud Readiness Index of 2018, while its ranking rose slightly in the BSA Global Cloud Computing Scorecard when compared to the previous year, from 21st to 19th position. There have been considerable improvements in cybersecurity, business sophistication, and broadband quality in Thailand.
The country has also demonstrated strength in cloud governance on the basis of incremental improvements in cybercrime and intellectual property regulations. Cloud computing governance generally falls under the Ministry of Information and Communications Technology, particularly for government cloud services implementation.
According to IDC, by 2022 over 20% of Thai organisations' cloud deployments will include edge computing, 25% of all production apps will be cloud-native, and 15% of public cloud computing will be based on non-x86 processors. Additionally, IDC expects that the top four cloud platforms (Microsoft Azure, Amazon Web Services, Google Cloud Platform, SAP, IBM) will host 80% of Iaas/PaaS deployments by 2022. However, by 2023 70% of the largest Thai companies will mitigate lock-in through multicloud/hybrid technologies and tools.79
Large enterprises show promising signs of adoption potential due to their investment budget, awareness of the benefits and skilled IT personnel. However, medium-sized businesses may require customised cloud software as well as applications for internal use. Smaller enterprises will tend to opt for public cloud computing.
Selected recent developments in the cloud industry include:
◼ In September 2018, Huawei introduced its locally-based public cloud services in Thailand. Thailand’s Board of Investment (BOI) granted Huawei license to operate cloud services in the country, making the technological conglomerate the first international provider of locally-based cloud services in Thailand offering both local infrastructure and access to its global network.80
79 https://www.idc.com/getdoc.jsp?containerId=prAP44877319 80 https://intl.huaweicloud.com/en-us/news/huawei-launches-public-cloud-services-in-thailand.html
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◼ In 2019, Infor, a US software company announced investments of around US$ 3.2 billion (EUR 2.9 billion) in R&D over the next five years to enhance the functions of its cloud-based services with AI and IoT applications. According to the company, the Thai automotive, food and beverage, fashion, retail, e-commerce, logistics, warehouse, and healthcare sectors have a strong growth potential for adopting the new generation of cloud-based software services. Infor’s clients include Boonrawd Brewery, which just invested in a 70,000-square- metre automatic warehouse, as well as other customers such as CFP, Tipco, Suraphol Group, IRPC, D-Stone, and VT Group.81
◼ Amazon Web Services (AWS) is expanding its presence in Thailand. The firm’s workforce has doubled in Thailand every year, in line with customer growth for cloud service adoption in the country. For example, AWS can count Tisco Bank in Thailand as one of its clients.82
Big Data and Analytics
According to the results of a joint 2018 study by the Digital Economy Promotion Agency (DEPA) and IDC Research (Thailand) titled “Big Data Analysis and Forecast in Thailand”, the big data industry in Thailand was estimated at THB 17.7 billion (EUR 530 million) for 2019, a growth of 16.4% from 2018’s THB 15.45 billion (EUR 460 million). Services valued at THB 11.84 billion (EUR 360 million) accounted for 55% of the big data market in 2017, while software and hardware constituted 33% and 12% respectively.
Purchases of big data hardware, software and service solutions are expected to experience sustained growth over the next years. The key drivers behind this trend are the growth of 4G wireless broadband, increasing adoption of the Internet of Things (IoT) technology, and the demand for big data strategies to drive sales and revenue amid growing enterprise competition. According to Teradata Thailand, big data and analytics spending is driven by the availability of data, a new generation of technology and a cultural shift toward data driven decision-making.83
81 https://www.nationthailand.com/Corporate/30341621 82 https://www.bangkokpost.com/tech/1733903/aws-expands-presence-in-thailand 83 https://www.bangkokpost.com/tech/local-news/1226624/data-science-poised-to-boom
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A survey of Thai companies conducted by Siam Commercial Bank in 2017, found that more than half have begun to employ big data, a trend that began just recently. Both the service sector and manufacturing sector use this tool to maximise their sales and marketing potential, e.g., to optimise prices and personalise campaigns and promotions. Survey results found that over 80% of Thai consumers now expect that products and services will fit their preferences in an optimal way, and that they prioritise quality. In this scenario, companies are seeking to leverage data analytics on signals like images and comments posted on social media, search engine keywords, and Internet of things (IoT) data to build strategies that meet individual customer needs via personalised marketing, price optimisation, cross-selling and other marketing activities.
Among the Thai firms that were not already using big data, around 70% planned to do so in the near future. The survey also found that the trend in big data investment in Thailand will see a major increase in the number of projects coupled with a smaller average size for individual projects. Factors impeding the growth of big data, include complexity, readiness of data and the lack of human resources.
Target industries for big data analytics include the banking and finance, telecom, healthcare, retail, construction and transportation. In manufacturing, particularly the electronics, appliances, automotive and auto part segments are adopting big data to improve productivity.
The Thai government is also preparing to exploit big data, with the aim of transforming important government functions such as planning and budgeting, as well as solving its citizens’ problems. The Digital Government Development Agency (DGA) is working to collate data from 20 ministries into a centralised big data management system. When the system is fully integrated, all government agencies will have access to the data, enabling them to better formulate and implement policies and facilitate the country’s digital transformation.
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Figure 18: The DGA is Developing a Centralised Big Data Management System Source: DGA
Thailand’s government-owned agency that owns and operates government data centres and cloud services, CAT Telecom, will be involved in big data analytics developments for Thailand’s industrial clusters. CAT aims to increase its digital business earnings to THB 2.2 billion by 2020 (EUR 70 million) on the back of the governmental digital transformation and the digital innovative park project in the Eastern Economic Corridor.84
Artificial Intelligence
A 2018 survey conducted by IT market research and advisory firm IDC, titled IDC Asia-Pacific Enterprise Cognitive/AI survey estimated a 17.1% adoption rate of artificial intelligence technologies among corporations in Thailand. Thailand was ranked 56th out of 194 countries in the Government AI Readiness Index 2019, beating Indonesia but outranked by Malaysia (22nd), while Singapore was the all-around winner, according to UK-based consultancy Oxford Insights.85 The early adopters are expected to be multinational corporations and Thai companies exposed to international competition. Overall, Thailand is placed among countries at the early stages of AI exploration.
According to Microsoft, at least 100 firms in Thailand adopted AI in their digital transformation plans in 2018. Early adopters such as banks employ face recognition, blockchain and machine
84 https://www.bangkokpost.com/business/1722915/de-ministry-banking-on-big-data-link 85 https://www.bangkokpost.com/tech/1719147/thailand-56th-in-ai-readiness-index
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learning for fraud detection. Oil & Gas players focus on safety and retail giants on ecommerce and loyalty programmes. Mid-size companies are expected to lead the second wave of adoption from 2019 onwards.86 Challenges with adoption are the country’s relatively high number of low or mid-level employees, particularly in the banking, healthcare and retail sectors that might see their jobs replaced by AI.
Thailand is expected to see its Robotic Process Automation (RPA) software sector grow, although it is coming from a small base. Voice-enabled usage and task automation are solutions that businesses are looking at to add to existing mobile applications.87
Some notable examples of companies working with AI are Telenor Asia, which developed an AI-powered chatbot for victims of domestic violence to access counselling and judicial consults, Sharkaroo in digital securities, Sertis, a data science and AI research company, Eureka AI on mobile data, GoPomelo cloud consultants, and New Computer Technology Consultants on RPA and analytics development.88
Some key initiatives in the Thai AI industry include:
◼ In October 2019, ERP firm Infor announced it was introducing an AI platform particularly geared towards the Thai healthcare and food sector. The AI platform will boast a single-user experience as well as a single-sign on to enhance productivity. The Thai healthcare sector is a strong priority for Infor due to the quality of the healthcare system as well as the high rate of medical tourism Thailand attracts.89
◼ In 2019, a Bloomberg article showed SCB Asset Management Co., Thailand’s biggest mutual fund company, will adopt AI to start offering more equity funds, helping them to identify investments, acquire new customers and retain current clients. New investment tools
86 https://www.bangkokpost.com/business/1584274/microsoft-100-firms-to-adopt-ai-in-year-ahead 87 https://www.bangkokpost.com/tech/1636510/thailand-software-spending-to-reach-b40-9bn 88 https://www.goodfirms.co/artificial-intelligence/thailand 89 https://www.nationthailand.com/business/30377621
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such as AI, data analytics and programme trading will enable the company to start selling its own funds to invest in overseas equities and allow the SBC Asset to ask for higher fees.90
◼ Facebook has used AI to map 300,000 miles of previously unmapped roads in Thailand and made the results available to the public. The new maps could be used for disaster response and urban planning according to the company, which mapped the roads in a little over a year.91
IoT Solutions
There are multiple factors fuelling IoT technology adaptation in Thailand. Among the key drivers are the impending arrival of 5G wireless broadband networks, proliferation of affordable devices that are connected to the internet, increased investment in data centres, the country’s strong manufacturing base, government initiatives to both connect and wire public transportation, and the development of smart cities.
The Thai government is heavily promoting the adoption of IoT technologies. The Digital Economy Promotion Agency (DEPA) is planning to lead an international IoT alliance which has pulled in around 30 local companies in 2018. Furthermore, around THB 2.2 billion (EUR 660 million) has been allocated to build an IoT institute in the EEC digital park through a Public-Private Partnership. The IoT institute will include a 5G laboratory, cloud innovation lab, artificial intelligence design lab and data analytics centre. The institute will allocate 60% of its space to serve as a testing ground and laboratory for IoT, AI and robotics. Outside space will also be provided for testing autonomous cars and drones.92
Awareness of IoT solutions has been growing more strongly as Thai companies explore the technology. The IoT industry in Thailand is expected to be worth US$ 1 billion by 2020.93 A 2018 survey by Asia IoT Business Platform (AIBP) found 89% of Thai enterprises, the highest percentage in ASEAN (Malaysia-86%, Indonesia-83%, Philippines-80%, Vietnam-79%), were exploring or implementing IoT solutions to boost their productivity and innovation, in part because
90 https://www.bloomberg.com/news/articles/2019-10-21/biggest-thai-mutual-fund-company-embraces-ai-to-boost-assets 91 https://www.bbc.com/news/technology-49091093 92 https://www.bangkokpost.com/tech/1419099/thailand-sets-sights-on-spearheading-iot-alliance 93 https://www.nationthailand.com/Startup_and_IT/30348708
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of government policy to drive awareness as well as investment in both soft and hard infrastructure. Among the Thai enterprises that were exploring and/or implementing IoT, 35% were at the fact- finding stage, 29% had already explored IoT and 28% had already implemented and/or benefited from IoT solutions.
IDC estimated that by 2019 Thailand will feature 2.2 IoT units per capita. The top five industries for IoT investments in terms of market potential are indicated in the figure below.94
Figure 19: IoT in Thailand: Top 5 Industries for IoT market Source: IDC
The scale of the Thai manufacturing potential for IoT adaptations is not surprising. Thailand is currently the 17th largest manufacturer in the world and 14th in automotive production, with a thriving ecosystem of auto manufacturers and assemblers.95 With the large size of the manufacturing industry in Thailand, possibilities for IoT adaptation are vast. This is evidenced by the large interest in smart factories from large manufacturers. There are an estimated 6,000 factories in the Food and Beverage industry alone that either harbour fully integrated smart factories or are exploring the uses of it.96
94 https://www.bangkokpost.com/tech/local-news/1160757/iot-gaining-in-popularity-among-thais 95 The Thai automotive manufacturing and assembly ecosystem includes BWM, Ford, Honda, Mazda, Mitsubishi, Nissan and Toyota brands, among others. 96 https://www.asmag.com/showpost/28635.aspx
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The government is also heavily investing in smart technologies for the industrial sector, especially 10 targeted industries in the context of the development of the Eastern Economic Corridor (EEC). The Thai government has approved over US$ 6 billion in investments for robotics and logistics upgrades to stimulate industry and offering incentives to companies adopting IoT technologies.97
Smart city applications are another key focus of the Thai government. Under its Smart Cities Framework, the Ministry of Digital Economy and Society aims to develop liveable, sustainably managed and operated cities through the use of digital technologies. Following the framework, Thailand is developing 77 smart cities by 2023. Chiang Mai and Bangkok will function as testbeds to refine the government’s approach as the government works towards finalising 30 smart cities between 2019-2021.98
Blockchain
The Thai government implemented cryptocurrency regulations in June 2018 and has recently approved blockchain-based securities issuance and trading.99 The Ministry of Finance will be launching projects utilising blockchain technology to strengthen government administrative efficiency and support revenue collection, asset management and procurement efforts. Moreover, the government signed a MoU with Krung Thai Bank to utilise blockchain to improve system infrastructure.
Thailand’s banking and financial system is planning to move into the world of blockchain technology and the use of cryptocurrencies. The Bank of Thailand has recently announced it will be developing its own blockchain environment and cryptocurrency utilised for interbank settlements, particularly between retail banks such as Bangkok Bank, Krung Thai bank, Siam Commercial Bank and others.100 The Thailand Bond Market Association will adopt blockchain technology for registration of bonds. Currently, banks and firms selling securities also act as bond
97 Ibid. 98 http://iotbusiness-platform.com/iot-thailand/ 99 https://techsauce.co/en/tech-and-biz/thailands-latest-greenlight-on-blockchain-securities-places-southeast-asia-on-the-crypto-map/ 100 https://www.thaiexaminer.com/thai-news-foreigners/2019/09/09/thailand-bond-market-new-cryptocurrency-blockchain-system-bank-bonds
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registrars. With the new distributed ledger or blockchain firms will see holdings in real time, allowing buyers of bonds to acquire them within 3 days rather than 15.
The government is giving far-reaching incentives for companies working in IT services, including FinTech, MedTech and AgriTech. A notable player in the blockchain sphere, NTT Communications (Thailand) has announced it will establish an innovation lab to develop blockchain, artificial intelligence (AI), and Internet of Things (IoT) solutions for businesses across multiple sectors, while also expanding the firm’s data centre at Amata City Industrial Estate.101
Augmented Reality/Virtual Reality
According to Tech in Asia, the region is poised to lead the Augmented/Virtual Reality (AR/VR) markets by 2020, when the industry will be worth an estimated US$ 120 billion (EUR 108 billion).102 Sony Playstation VR and mobile VR are expected to the initial drivers of consumer VR. VR is mostly embedded in the entertainment market, driven by hardware, games, videos and theme parks.
IDC expects AR/VR spending in the consumer, enterprise and commercial segments to grow with a CAGR of 70.7% between the 2017-2022 period.103 The commercial segment is expected to overshoot the consumer segment, boosted by investments from progressive companies.
AR hardware will dominate the AR market, while augmented commerce, data, voice video, enterprise, apps and games sales will continue developing. Augmented reality has played a leading role in South East Asia’s burgeoning tech industry and could have applications in improving productivity in the workplace, quality control and operational efficiency.
An example of augmented reality’s increasing popularity in Thailand is Pokemon Go. The Thailand Tourism Board even went so far as to add more stops and features in the country to attract visitors.104
101 https://www.asiablockchainreview.com/thailands-ntt-communications-to-establish-innovation-lab-for-blockchain-ai-iot/ 102 https://www.techinasia.com/talk/augmentedvirtual-reality-revenue-forecast-revised-hit-120-billion-asia-leading-2020 103 https://techwireasia.com/2019/03/ar-and-vr-are-going-mainstream-in-the-apac-says-idcs-new-forecast/ 104 https://appsynth.net/blog/augmented-reality-southeast-asia-thailand/
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Supporting this boom, hardware innovations from large tech players such as Samsung are expected to fuel the AR/VR markets. As the technology is continuously developing, design software and content development firms are adopting AR/VR features in their solutions to simplify developing both AR/VR content and applications.
Local Players
The section below provides details on local Thai players in IT software industry.
Concept Series Co. is a Thai software development company that designs, develops and delivers end-to-end Internet technology social network solutions. The company offers open source technology, network solutions, technology development and applications.
Nadia (Thailand) Co,. Ltd. is a Thai-affiliated company with its headquarters in Tokyo, Japan. Established in 2014, the company specialises in digital content for AR, VR, Website, Smartphone Application and Graphic Design, including 3DCG.
Atato is a blockchain service provider, founded in 2017 in Bangkok, where their development team is based. The company specialises in building decentralised applications for enterprise customers. They have partnerships with Ethereum, Consensys, and IBM.
SmartContract is a blockchain company headquartered in Bangkok, Thailand. It is described as a blockchain lab with expertise in smart contracts, asset tokenisation, ICO, and the distributed ledger technology space in Asia. They started business in 2016.
Sertis is a leading data science and AI research company with Australia and South East Asia as focus regions. The company has offices in Singapore and Thailand. Established in 2014, the company Sertis provides both off the shelf solutions as well as customised AIs for its clients.
NTT Communications (Thailand) Co., Ltd. is wholly owned subsidiary by NTT Communications Corporation, established in 2002. NTT Communications Thailand provides high speed and reliable connectivity, high-quality Bangkok 1 and Bangkok 2 data centre services, cloud service,
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security services, IT management service, voice and conferencing solution and system integrated service to enterprises worldwide.
True IDC (True Internet Data Center) is the leading carrier-neutral data centre and cloud service provider in Thailand. With Cloud and Data centres located in key business districts in Bangkok, including North Muangthong, Midtown Ratchada, Midtown Pattanakarn and IDC-East Bagna, True IDC is able to provide strong national coverage. True IDC has the highest number of internationally recognised certifications including ISO/IEC 20000-1, ISO/IEC 27001, ISO 22301, ISO 50001, CSA STAR Cloud Security, PCI-DSS.
3.3.2 EU Entry Opportunities
◼ Considered as an activity of special importance and benefit to economy, the software sector is now becoming a lucrative opportunity. Software development ventures are now eligible for the maximum tax and non-tax incentives offered by the BOI. Among areas identified by the BOI has as opportunities for foreign investment are Enterprise Software, embedded software and cloud computing in particular.105
◼ Considering the big data and analysis’s segment European companies are advised to focus on target industries such as banking and finance, telecom, healthcare, retail, construction and transportation. Within manufacturing companies, big data solutions are gaining attention from players active in the electronics, appliances, automotive and auto part segments.
◼ Software-enabled services are also likely to be boosted by the government’s allocation of the 920-925 MHz spectrum for use with Internet of Things technology (IoT). This development is spurring interest in software-enabled services, such as cloud computing, IoT, and big data analytics. The IoT market, specifically, is expected to reach a value of US$ 973.3 million (EUR 791.8 million) by 2020, with more than 400 million connected devices. As a result, possibilities for the IoT segment are significant, both in IoT equipment and software, with over 60% of organisations in Thailand that have expressed interest in IoT investments.
105 https://pugnatorius.com/digital-boi/
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◼ The Thai banking and finance sector is expected to become an early adopter of blockchain solutions. Cryptocurrency companies and traders can make use of the increasingly sophisticated regulatory environment in Thailand and the government’s push towards integration of Blockchain technology in the financial sector.
◼ Although security software is a significant segment with growth opportunities, it is also the sector that is relatively difficult for new market entrants to penetrate. That said, it is an area of high growth due to an increasing awareness of the risks to governments, enterprises and individuals. As a particularly vulnerable target for cyber-criminals, Thailand is increasingly seeking to bolster its cyber security capabilities and procure IT security solutions. Thai authorities have also taken a firm stance on cybersecurity by establishing the Cyber Security Bill, Cybercrime Act, Cyber Security Protection Bill, and Data Protection Bill. Companies and private individuals are expected to demand more IT security solutions, thus, offering additional venues for security software providers to add their product mixes into the Thai market. In particular, there is increasing demand for cloud security and mobile security solutions.
◼ AI is expected to become more and more significant in Thailand, although it is currently at an early adoption stage. Early adopters such as banks are increasingly utilising technologies such as facial recognition, blockchain and machine learning for fraud detection, while Oil & Gas companies focus on safety and retail giants on e-commerce and loyalty programmes.
◼ Business Intelligence software is another growth area, due to proliferation of Big Data. Big Data is becoming an integral part of the digitalised world in part by the expansion of smartphones, tablets and other internet-connected devices, which drive the need for insight and data analysis solutions. Local businesses are becoming more aware of the need for timely delivery of information to help with real-time decision-making and are starting to explore options for big data analysis. Customer intelligence and business analytics solutions are among the rising software products among Thai enterprises seeking to optimise product releases and inventories. Web analytics is also a growing area, as firms look to assess the effectiveness of their online activities and advertising in more detail.
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◼ With the growth of cloud computing and proliferation of data centres, Software-as-a-service (SaaS), infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) sectors are expected to expand. Public authorities, telecoms, healthcare and retail are considered to be early adopters. Although the strongest adoption levels of SaaS have so far been for relatively cheap and basic services, enterprises are planning adoption of more sophisticated solutions as well. Some of the international players have already begun servicing this market, including Acumatica’s full Thai-language version of an enterprise resource planning cloud system.
◼ Thai consumers are also intensive buyers of video games. In addition, Thailand has a vibrant digital content industry and companies looking for a regional media hub, capable of creating, publishing and distributing gaming or animation content will find favourable environment here.
◼ The virtual and augmented industry is showing dynamism in Thailand, with leading tech players expected to continuing innovating in this segment. Aside from applications designed for improving productivity, quality control and operational efficiency, European companies are advised to take into account Thai consumers’ penchant for video games; AR/VR players could fill a niche in the sector.
European Companies
AD System Asia
Founded in 2010 as the Research & Development (R&D) centre of the Italian software house AD System S.p.a., AD System Asia has grown to become an independent software house and IT services provider for Thailand’s market. The company now delivers high-technology IT services and solutions for large- and medium-sized enterprises, including bespoke software, mobile apps and web development, system integration, IT outsourcing, software re-engineering, project management, IT consultancy and software testing services. The company has a domain knowledge on a range of sectors, such as the financial service industry, manufacturing, logistics
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and commercial sectors, and public administration. It also offers solutions for the digitalisation of business processes and document management.
RawDevelop
RawDevelop is a software development company from the United Kingdom with expertise in both front end and back end development. Since its founding in 2012, the company has expanded its presence into Thailand by establishing its office in Bangkok. The company specialises in eLearning software, mobile apps and outsourced software development, as well as web app authoring tools. Its clients are large multinationals from around the world – largely in Europe and North America. The company also provides eLearning content, primarily in sales and management.106
Manao Software
Manao Software is a Danish custom software development outsourcing company, located in Chiang Mai, Thailand. As a Microsoft Gold Certified Partner, it specialises in outsourcing services for clients who wish to develop custom software, custom mobile apps and custom websites using Microsoft technologies, such as ASP.NET, SQL Server, Windows Applications, SharePoint, Umbraco CMS websites, and others. Its core competences are: web applications, websites, web services, integrations, reporting and databases.
106 http://www.rawdevelop.com/
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Figure 20: Manao Software Office in Chiang Mai Source: Manao Software Founded in Denmark in 2004 and under the name of Software Consult, the company had been initially offering its custom software development services to major pharmaceutical companies, SMEs and individuals from its Danish offices. In 2007, the company decided to lower labour costs by moving to Thailand and opening its Thai branch, Manao Software.
SAP
SAP is a multinational software corporation, focusing on software development for business processes, such as accounting, controlling, sales, purchasing, production, warehousing, and human resources. Originally founded in Germany, it is now present in more than 180 countries. In recent years, SAP has been undergoing a transformation from an enterprise resource planning software maker to a cloud, IoT and machine-learning firm. In addition to its range of solutions for business processes, the company has also introduced private cloud service in Thailand in 2016, with data servers hosted in the country.
Skywave Technologies
SKYWAVE TECHNOLOGIES (Thailand) Co. Ltd is a German-owned IT company in Thailand that provides services to the international business community in Bangkok, Europe and the APAC region including New Zealand and Australia. They specialise in Software & Digital Content
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Development, Support, Maintenance and IT Consulting, and are promoted by the Thailand Board of Investment as an expert company in the field of software and digital content development.
Werum IT Solutions
Founded in 1969, Werum is headquartered in Lüneburg, Germany, and has many locations in Europe, America, and Asia, including Thailand. The company is a leading supplier of manufacturing execution systems (MES) and manufacturing IT solutions for the pharmaceutical and biopharmaceutical industries. Its out-of-the-box PAS-X software product is run by the majority of the world’s top 30 pharmaceutical and biotech companies but also by many mid-sized manufacturers. Werum’s Thailand office is its Asia Pacific headquarters, and services its clients in the region.
3.4 Information Technology Services
3.4.1 Market Overview
Even though it is rapidly developing, the IT services sector has not reached the same scale as the Thai hardware market; the International Data Corporation (IDC) estimates that in 2018 the sub-sector was worth THB 92.6 billion (EUR 2.8 billion). In this year, the largest contributor to IT services spending was project-oriented services (THB 40.5 billion or EUR 1.2 billion), followed by managed services (THB 30.9 billion or EUR 930 million) and support services (THB 21.2 billion or EUR 640 million).107 Software services was estimated to account for 20% of the total IT market in 2019, valued at THB 363 billion (EUR 10.9 billion), with digital services amounting to THB 65 billion (EUR 1.9 billion) at 12%.108
Factors driving the demand for IT consulting and System Integration (SI) support are the digital transformation, which is spurring SMEs to invest in new technology and enhance productivity, for which they need support. A 2018 IDC survey showed around 63% of Thai firms were planning to use external support, such as cloud vendors, technology firms and system integrators.
107 https://www.bangkokpost.com/business/1596158/it-services-spending-predicted-to-increase 108 https://www.nationthailand.com/Economy/30363105
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Government support and incentives (universal broadband, investment in submarines cable lines, a competent ICT workforce, a competitive ICT industry, digital government, business matching) for the Thailand 4.0 scheme are promoting the rapid acceleration of new technology adoption, including big data, IoT, robotics, cloud, SaaS and smart devices.109
Despite this, the growth of the IT services market is expected to slow down over the next few years as the market matures.
IT Consulting and System Integration
The move towards the use of AI applications in manufacturing is creating opportunities for companies specialising in IT consulting and system integrators, becoming a key driver for the Thai market. By the year 2023, the market value of SI businesses to facilitate the use of AI in manufacturing is expected to reach THB 45 billion (EUR 1.3 billion), as the manufacturing sector adopts AI and digital technologies, especially in large sectors with high potential such as petrochemicals and beverages. As such, demand for SI specialising in AI is set to increase to at least 500 providers by 2023.110
Based on data from the International Federation of Robotics (IFR), Thailand's use of automated machinery is likely to continue growing, from 18% YOY in 2018 to 21% in the next 3 years (2019 – 2021). However, currently there are only 200 system integrators in Thailand, of which only 5% specialise in AI.111
It is important to highlight that the Thai SI industry faces considerable challenges represented by their leverage with technology owners and the shortage of trained personnel in data science and AI. Thai companies generally work project-based, a fact that makes SI sources of revenue more volatile. Moreover, their capacity to have an impact is limited by their ability to attract the right talent, as they are constrained by an insufficient supply of human resources.
109 https://www.export.gov/article?id=Thailand-telecommunications 110 https://www.scbeic.com/en/detail/product/5744 111 Ibid.
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Some recent developments related to this segment include:
◼ In 2019, Japanese IT service provider NTT communications acquired Thailand’s Locus Telecommunication Incorporated, aiming to enhance its market position in the country. The acquisition was completed at an undisclosed sum and is meant to strengthen the company’s consulting and system development services, as well as its maintenance and operations capabilities in the Thai market. Locus, founded in 1988 and based in Bangkok has a strong existing client base in banking, insurance, retail and other sectors.112
◼ In July 2019, itelligence AG, a leading SAP firm announced it would acquire ISS Consulting (Thailand) Ltd., based in Bangkok. ISS Consulting is a leading SAP service provider in Thailand, focused on the Food and Beverage (F&B), manufacturing (including automotive) and retail sectors. Due to its proven SAP consulting expertise, the company enjoys an excellent market reputation. With this acquisition, the SAP Platinum Partner, itelligence, continues expanding its market presence in Thailand and South East Asia.113
IT Education
As highlighted above, the shortage of specialised SI, data science and AI personnel could be a potentially constraining factor in the promotion of new technology adoption across new firms. Support services such as IT training for employees and hardware and software renewal and upgrades are expected to experience an upward trajectory. Total support services spending is projected to reach THB 27 billion (EUR 810 million) with a 6.3% CAGR between 2018-2022.114
The Thai public sector is marked by significant investments in developing human resources for the digital economy. The Digital Economy Promotion Agency (DEPA) has set plans to collaborate with around 2,000 coding pilot schools around the country to develop a pool of 400,000 coders within the 2017-2022 period. Furthermore, DEPA aims to certify 4,000 students in niche areas
112 https://www.nna.jp/english_contents/news/show/20190925_0008
113 https://www.nttdata.com/global/en/media/press-release/2019/july/itelligence-expands-into-thailand# 114 https://www.bangkokpost.com/business/1596158/it-services-spending-predicted-to-increase
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such as cloud computing and AI at 10 universities. Aside from these projects, the agency is also implementing a nation-wide digital literacy training project through an e-learning platform. It is organising this in collaboration with Tech giants such as Google and local start-ups, for people to increase their digital literacy by themselves.115
Satellite Services
A key development in the satellite service industry is represented by the collaboration between the Ministry of Digital Economy and Society (MDES) with the Thai Chamber of Commerce (TCC) to study Japan’s satellite model. The aim of the collaboration is to seek supervisory direction for the satellite industry, in which foreign investments will be allowed after Thaicom Plc’s 20-year satellite concession ends in 2021. Thaicom plans to begin awarding licenses for the utilisation of satellite orbit slots currently occupied by Thaicom 4, 5, 6 satellites in 2020.116
The future Thai satellite industry is likely to boast more internet satellites as there is a move towards investments in services from non-geostationary satellite orbit, like low earth orbit and medium earth orbit – the smaller size of these satellites allows a far greater number of them to be sent to the sky at each time. These satellites would serve 5G connections, IoT applications, high-speed data transmissions, survey and navigation, as well as high-resolution photography.
Some noteworthy developments in this area include the following:
◼ In 2018, the Thai government announced it chose Airbus to manufacture Theos-2, the replacement for Theos, the first Thai earth observation satellite originally launched in 2008. The satellite amounted to a US$ 238 million (EUR 216 million) investment and will be used for water and disaster management, national security, monitoring pollution and natural hazards and economic development.117
◼ In 2019, the Royal Thai Air Force procured a second Earth observation satellite from the Dutch Innovative Solutions in Space (ISISpace), under a contract that covers a ground
115 https://www.nationthailand.com/Startup_and_IT/30354496 116 https://www.bangkokpost.com/business/1740789/satellite-slot-licences-slated-for-early-2020 117 https://www.spacetechasia.com/thailand-selects-airbus-for-theos-2-satellite-total-budget-238-million/
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segment, satellite commissioning and training. The company will train the Royal Thai Airforce to determine future operational needs and design missions. ISISpace will collaborate with Simera Sense (an engineering firm) and Kubos Corp (a satellite software company). The launch for the second satellite is planned on a Soyuz rocket in 2020.118
◼ In August 2019, the Thai military formally opened a new space operations centre to enhance national security in space. The centre is meant to provide the groundwork for several missions, including space operations, space patrols, satellite communications and international engagement in space-related activities.119
◼ In June 2019, Thai Space Technology company mu Space announced multiple service satellite deals with 7 Asia-Pacific firms, ranging from telecommunications, technology services providers to private enterprises. Mu Space will set aside 24 Gbps of high- throughput satellite capacity for their regional partners, meant for providing data connection and mobility services to Australian, Indonesian, Malaysian and Thai consumers, as well as consumers in Myanmar.120
Local Players
T.C.C. Technology Company Limited is Thailand’s leading data centre service provider under the T.C.C. Group. The company provides commercial managed hosting and data services, co- location for physical hosting of servers, network equipment and applications, managed support, system level administration, tape backup and management, availability and resource monitoring, SAP basis support and consultation, hosted Microsoft Exchange solutions, and disaster recovery centre services to businesses in Thailand.
Internet Thailand Pcl (INET) is one the country’s leading ICT solutions provider, which administers the largest ICT network in Thailand. INET was established in 1995 jointly by the Communications Authority of Thailand (CAT), TOT Corporation Public Company Limited and the
118 https://spacenews.com/royal-thai-air-force-isispace-satellite-2/ 119 https://www.chiangraitimes.com/tech/thailand-launches-new-space-operations-center/ 120 https://spacewatch.global/2019/06/thailands-mu-space-corporation-signs-satellite-capacity-and-connectivity-agreements-with-seven-asia- pacific-providers/
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National Science and Technology Development Agency (NSTDA), and has continuously expanded its operations ever since. While it initially functioned as a state-owned enterprise, INET shook off its status in 2001 by listing the company on the Stock Exchange of Thailand and selling shares to the public. The company offers internet access, ICT infrastructure services, e-commerce and on-line electronic payment system, data centre and cloud services to businesses and other Internet users across Thailand. It operates through two segments: Access Business and Business Solutions.
In 2015, the company together with Citrix (a virtualisation, mobility management, networking and cloud infrastructure provider) launched Thailand’s first public cloud desktop-as-a-service (DaaS) offering.
Business Applications Co., Ltd (BAC) is the leading Performance Management solution provider in Thailand with a solution offering that includes both IBM Cognos Performance Management solutions and BAC support and services. Established in 1993, BAC started as a dealer of Platinum software products with exclusive distributor rights for the Thai market. Since then, the company has proven itself to be effective in penetrating the PC LAN market with Platinum software. In its first two years of operations, BAC marketed and installed over 100 customer sites and continued its rapid growth. As Business Intelligence (BI) tools started becoming prevalent, BAC responded to market needs by partnering with IBM Cognos in 1997 with exclusive distributor rights in Thailand. Since then, the company has shifted its main focus onto Business Intelligence tools. Currently, there are over 250 companies with more than 5,000 users that have been serviced by BAC.
Advanced Information Technology Public Co., Ltd. (AIT) is a Thai System Integrator (SI) - the designer of computer and computer communication systems. The company integrates various components, including computer hardware, system software, application software, and computer network system equipment. It provides complete turnkey solutions, including consultation, project planning, system design, implementation, installation, training and maintenance.
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CDG Group has become a professional service provider of integrated and comprehensive IT solutions in Thailand. The company has been serving leading organisations – from public sector, state-owned enterprises, to large corporations in the private sector. With over 50 years of experience, the company has grown its portfolio to offer a range of services, including IT consulting, system design and development, hardware and software supplies, applications to fulfil customers’ requirements in all forms, IT training, as well as after-sale services and maintenance. The CDG Group consists of 6 companies: Control Data (Thailand) Limited; CDG Systems Limited; Computer Peripherals & Supplies Limited; GIS Company Limited; GlobeTech Company Limited; and ESRI (Thailand) Company Limited.
G-Able is a Thai IT services company that offers a wide range of solutions including systems management and data storage, network security systems, applications and systems combination.
Aware is a privately held Technology Company focused on Business-to-Business (B2B) system integration applications that remove redundant manual processes and drive down costs. The company is headquartered in Bangkok, with two other locations in Chiang Mai and Cape Town.
NaviWorld is a Thai system integrator and IT consulting company with offices in Bangkok and Sriracha. NaviWorld Thailand was founded in early 2000 as a member of The NaviWorld Group to assist local and international enterprises in Thailand selecting and implementing business solutions that optimise business processes and leverage organisation knowledge leading to competitive advantages. With solutions catering for various sectors from Distribution, Retail, Services and Manufacturing, NaviWorld brings a portfolio of internationally proven, fully integrated business solutions to its clients. The company is a Microsoft Dynamics Gold Certified Partner. Its solutions are based on Microsoft Dynamics ERP/CRM, which are supported by their global partner network.
3.4.2 EU Entry Opportunities
◼ In IT consulting and system integration, the utilisation of AI and IoT technologies is acquiring increasing importance. Especially in high potential sectors such as Food & Beverage,
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manufacturing and petrochemicals, system integrators that are specialised in AI are likely to find high demand in Thailand, particularly because local providers are likely unable to respond to demand.
◼ The provision of IT services is still typically focused on hardware sales, but the consulting element has been growing, along with return on investment. Enterprises are increasingly looking for external advice on prescribing an IT strategy and identifying vendors. Resource management systems are still a key focus, with companies seeking solutions that directly respond to their specific needs.121
◼ The Thai satellite industry will open up more to foreign investment after Thaicom Plc’s 20-year satellite concession ends in 2021. Thaicom is planning to give out licenses in 2020, which could open up opportunities for European companies in the aerospace industry.
◼ IT education is marked by strong private and public investment. With the Thailand 4.0 policy and the government’s push towards a digital economy, there is a risk that many workers in Thailand will be left behind. Therefore, there will be a need for support services such as IT training for employees during transition periods and IT literacy programmes in general.122
◼ Additional strong growth areas are expected to be systems and security solutions integration. With the proliferation of cyber-crime and the government’s push for digitalisation, companies are increasingly seeking solutions that help them be both digitally connected and, at the same time, safe. European companies with expertise in systems integrations and antivirus applications will find strong demand for their services.
European Companies
TÜV NORD Thailand
TÜV NORD Thailand is a local subsidiary of the German RWTÜV Group, a technical service provider. Established in 1989, the company provides services in the fields of testing, inspection,
121 http://www.oxfordbusinessgroup.com/overview/going-digital-take-period-resulting-improved-infrastructure; http://www.ibm.com/cloud- computing/th/en/built-on-cloud/ 122 https://www.bangkokpost.com/business/1596158/it-services-spending-predicted-to-increase
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certification and training. Its broad certification, service and testing/inspection portfolio encompasses both specific individual tests/inspections and also management of complex safety solutions. Within the information technology services segment, it provides customers with information security management systems, business continuity management solutions, Capability Maturity Model® Integration (CMMI) and ISO/IEC 20000-1 certification. The company also delivers training in IT security and IT safety. inet-Logistics inet-Logistics is a leading European provider of Software-as-a-Service (SaaS) for logistics sector. Since its establishment in Germany in 1999, the company has grown into one of the top 5 providers of transport management systems (TMS), worldwide. With over 9,000 transport partners and more than 11,000 suppliers, the company is one of the biggest technically integrated supply chain networks in the world. The INET TMS connects global and multi-mode transport networks on the in- and outbound levels. It services Automotive, Pharmaceuticals & Chemicals, High-tech & Engineering, FMCG & Retail sectors, to which it provides a spectrum of business, application and integration services. The company has a specific focus on transportation management, freight cost management, container management and transportation analytics.
INET entered the Thai market after opening its first Asian subsidiary in 2010. In Thailand, the company is involved in communications and computer business, computer messaging- service, software development, computer system implementation and maintenance, software and hardware maintenance, and provision of solutions for office communication systems.
Neos
Neos is a cloud-, infrastructure- and service provider specialised in building customised digital platforms across all industries (with a focus on the travel and airline industries). The team operates from three geographical locations (Munich/Bratislava/Bangkok) and have expert knowledge in Linux, Windows, Networks, Databases & Big Data, VMware, Architecture and Applications. The company offers a full range of solutions around Big Data, DevOps and Data
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Centres, including infrastructure and application management, cloud infrastructure enablement and application development.
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3.5 Telecommunications Equipment
3.5.1 Market Overview
The telecommunications sector represents a key focus of the Thai government’s ambitious plans to transform the country into a digital economy. Apart from the 3rd ICT master plan and the National Digital Economy Policy and Plan (2016-2020), the ICT Policy Framework lists ambitious goals such as universal broadband, developing a qualified ICT workforce and competitive industry, creating a digital government among other activities.123
The Thai government is heavily investing in the national broadband infrastructure. Thailand adopted 4G in 2013, along with Malaysia.124 In 2015, the government invested US$ 571 million to build a national broadband infrastructure, to provide affordable internet coverage to 70,000 villages (93% of total villages) nationwide.125 In 2017, the government identified 75,000 villages in the country without internet access – through their Broadband Internet (Net Pracharat) Project, they completed installation of fibre cable networks for up to 25,000 villages. At the end of 2019, the Ministry for Digital Economy and Society aims to complete installation for the remaining 50,000 villages.126
In terms of regional broadband connectivity, Thailand currently only hosts 7 submarine cables compared to 20 in Singapore and 12 in Malaysia. However, the government has allocated THB 5 billion (EUR 150 million) for its “ASEAN digital hub” project, which will see the state-owned CAT Telecom increase network capacity in three phases; the first phase comprised of increasing capacity by 2,300 giga bits per second (Gbps) in border areas with Cambodia, Laos and Myanmar with a THB 2 billion investment (EUR 60 million). The second phase will include the installation of equipment at 151 communications stations nationally at a 1 THB billion (EUR 30 million) investment, as well as increasing the existing submarine cable network to 770 Gbps. The third phase will include a new submarine cable connection from Thailand to Asia-pacific nations by 2022.127
123 https://www.export.gov/article?id=Thailand-telecommunications 124 https://asia.nikkei.com/Spotlight/5G-networks/Thailand-Vietnam-and-Philippines-named-as-likely-5G-laggards 125 Export.gov 126 https://www.nationthailand.com/Economy/30362658 127 https://www.nationthailand.com/Startup_and_IT/30371597
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The mobile penetration rate in Thailand is very high, with 71% penetration of mobile users, 92 million mobile internet subscribers, 133% penetration of mobile subscriptions and 55 million active mobile internet users.128
Routers and Networking Equipment
The expansion of broadband internet in Thailand saw the widespread adoption of Digital Subscriber Line (DSL) services, together with some significantly lesser deployment of the cable modem option, as well as some broadband wireless access. Fibre-to-the-home (FTTH) services continue to grow in 2019, especially in metropolitan hubs of the country.129 The four main internet service operators in Thailand are AIS Fibre, which holds a 7.9% market share at 820,000 household subscribers, True Internet at 3.3 million household subscribers, Triple Three Broadband at 3 million and TOT at 1.2 million.130
Key developments in the sector include:
◼ In 2018, leading fixed broadband operator AIS fibre became the first service provider in the world to commercially launch Nokia’s mesh wireless solution. The partnership between the two companies aims at providing residential consumers with a premium service that enables WiFi broadband throughout the home. The Nokia WiFi Beacon 3 duo-pack offers a meshed network that detects 100% of interference sources, self-heals automatically and optimises WiFi connection and eliminates manual interference by the customer. 131
◼ Huawei recently launched a Smart Mesh service in Thailand in collaboration with 3BB (triple T broadband). Their “Smart Mesh” services include the use of Optical Network Terminal (ONT) suites and service packages such as game acceleration and embedded artificial intelligence.132
128 https://www.bangkokpost.com/tech/1631402/thailand-tops-global-digital-rankings 129 https://www.businesswire.com/news/home/20191029005987/en/Analysis-Thailands-Telecoms-Mobile-Broadband-Markets-2019-2024 130 Huawei.com (2019). https://www.huawei.com/en/press-events/news/2019/10/Huawei-PremiumWi-Fi-Thailand-3BB-First-Smart-Mesh 131 https://www.nokia.com/about-us/news/releases/2018/11/28/ais-fibre-teams-up-with-nokia-to-launch-first-in-home-meshed-wi-fi-service-to- customers-in-thailand/ 132 https://www.huawei.com/en/press-events/news/2019/10/Huawei-PremiumWi-Fi-Thailand-3BB-First-Smart-Mesh
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Smartphones
2019 marked the first year in Thailand with an expected decline in smartphone sales, by approximately 4% or 17 million units. Despite still being a THB 100 billion market (EUR 3 billion) retail conditions are changing as the market is quickly maturing with a wide range of smartphone competitors. Thai consumers are expected to increasingly look for models with a longer lifespan and better value for money, illustrated by a decline in Apple IPhone sales in the second part of 2018.133
The top five smartphone companies by unit market share in 2017 were Samsung (34.4%), OPPO (15.4%), Huawei (11.3%) vivo (10.3%), True (9.8%), and others (18.7%).134 For the second quarter of 2019, the top 3 smartphone vendors were Samsung (30%), Oppo (18%) and Vivo (16%).135
Figure 21: Chinese Brands Storming South East Asia Source: Bangkok Post With high penetration rates and more available smart phone technology, operators are now increasing emphasis on services and customer experience. They continue to level up their own
133 https://www.thaiexaminer.com/thai-news-foreigners/2019/06/04/thailand-smartphone-consumer-market-sales-huawei-mobile-phones-thai- consumers/ 134 https://www.idc.com/getdoc.jsp?containerId=prAP43246017 & IDC 2017 135 https://www.bangkokpost.com/business/1768694/oppo-shuffles-smartphone-lines-for-mid-range-capture
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unique services and offerings to stay competitive and relevant in the market. Apart from the usual smartphones, tablets and wearables, they have continued to expand their range of hardware, from smart home IoT to mini humanoid robots. Physical outlets have also been upgraded to better customer service experience, operating as device retail outlets, cafes, meeting zones, and virtual reality (VR) content experience zones.
IPTV (Internet Protocol Television) Equipment
IPTV services in Thailand are offered in alliance with IPTV platform developers and broadcast operators. Equipment is provided by private sector players. Players that have recently entered the sector include Cubic Associates Group, a company working in collaboration with state-owned TOT Plc; and V.R.M. VoizPlus, operator of the Vooz IPTV service. They are entering the market at a time when broadband tariffs are becoming more affordable, network coverage is expanding, and connections are more stable. Globally, the top five equipment vendors include Microsoft, Thomson, ZTE, Alcatel-Lucent, and Netgem. In Asia, top IPTV middleware vendors are ZTE, UTstarcom, Cascade, Microsoft, and Huawei.136
IPTV is a relatively recent addition in Thailand as its utilisation was not previously seen as a practical option due, mainly, to poor network quality, limited coverage and a lack of quality programming. IPTV’s future looks promising thanks to limited frequency resources and a shortage of satellite transponder capacity. However, major challenges could arise from the developing satellite industry, cable TV operators, as well as broadcast TV, which is fast evolving and improving.137
5G Infrastructure
Thailand is making good progress towards launching 5G. In 2018, the National Broadcast and Telecommunication Commission (NBTC) allowed service operators to employ the 26GHz spectrum range for 5G technology. According to the NBTC, the Thai government is auctioning three 7-
136 http://wwwen.zte.com.cn/endata/magazine/ztetechnologies/2010/no12/articles/201012/t20101215_196099.html 137 https://www.developingtelecoms.com/tech/optical-fixed-networks/7693-new-solutions-drive-thai-telecom-services-market.html
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megahertz spectrum licenses (for 5G service) in December 2019 at a price of THB 53 million (EUR 1.6 million)138 and is hoping to deploy 5G service by 2020, as one of the first ASEAN countries to introduce commercial 5G. These 5G licenses have a minimum validity of 20 years. As such, this will increase mobile broadband penetration by 133% within the next two years, which would lead to a cumulative GDP increase of $23 billion (EUR 20.77 billion) by 2020.139
Consumers seem to be ready to adopt 5G, as a 22-country survey with 1,500 respondents in Thailand suggested, showing that by 2024, up to 65% of the world population will be using 5G and 95% of data traffic would be transmitted through 5G technology by the end of 2024. Thai mobile users surveyed communicated they would be willing to pay a 30% premium on 5G services, while half of local respondents mentioned they would be willing to pay THB 150 (EUR 4.50) extra in monthly fees. 140
Recent developments in 5G infrastructure development include:
◼ In 2018, AIS became the first network operator in Thailand to test 5G technology, in collaboration with Nokia, Huawei and ZTE corporation. AIS is also upgrading its core network architecture in preparation for providing 5G throughout Thailand.141
◼ In 2019, Thailand launched Huawei’s 5G test bed in Thailand’s Eastern Economic Corridor, marking its first lab in South East Asia – following operators like Nokia, Ericsson and Thai telecom firms that have already set up shop in the area. Previously, Huawei has set up a US$ 22.5 million worth cloud centre in the EEC.142
◼ In 2019, the NBTC announced plans to allocate 380 MHz of spectrum in four frequency bands by 2020 to ensure that Thailand’s mobile broadband services have sufficient resources to operate smoothly.143
138 https://www.bloomberg.com/news/articles/2019-05-14/thailand-seeks-1-7-billion-from-sale-of-5g-telecom-licenses 139 https://www.export.gov/article?id=Thailand-telecommunications 140 https://www.nationthailand.com/edandtech/30372677 141 https://www.bangkokpost.com/business/1580894/ais-leads-the-way-with-5g-in-thailand 142 https://disruptive.asia/thailand-launches-huawei-5g-test-bed/ 143 http://www.xcl-polygel.com/news/thailand-plans-to-launch-5g-network-in-15088069.html
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Local Players
Samart I-Mobile Plc is a Thai mobile phone producer. The company was founded in 1995 and has its headquarters in Nonthaburi. It has its own shop, called “i-mobile by SAMART” which distributes IT devices, mobile phones, accessories, SIM cards, and provides after sales services, nationwide. Currently, the company is trying to expand overseas to the markets of Malaysia, Cambodia, Indonesia, Myanmar, Laos, Hong Kong, India, Bangladesh, and Sri Lanka. I-Mobile smart phones run on Android OS.
SVI, founded in 1985, is a leading Thai company specialising in Electronics and Manufacturing solutions. Aside from several offices in Thailand, the company has established presence in various countries in South East Asia, Europe and in the USA. SVI’s activities include the manufacture of micro-electronics for telecommunications components, specialised electronic components and industrial electronics.
Forth Corporation is a Thai company founded in 1989 under the original name of Genius Communication System Company Limited. It manufactures PABX systems under the trademark of FORTH, in addition to manufacturing and assembling printed circuit boards and electronic devices and telecommunication equipment.
Forth has its manufacturing plant “Forth EMS” on 16,000 square meters of land located in Nakhon Pathom Province. The company’s main customers include leading electronics and telecommunication players both in Thailand and globally.
3.5.2 EU Entry Opportunities
◼ Wearables are becoming a new, trendy product in Thailand, with the revenue estimated to amount to US$ 29 million (EUR 23.6 million) in 2018.144 Although some of the more advanced wearables may be out of reach to Thai consumers, there is significant scope for
144 https://www.statista.com/outlook/319/126/wearables/thailand#
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products, such as fitness wrist wear equipped with sensors, activity trackers that measure and analyse physical activity, and smart clothes or eyewear that measure body functions.
◼ The Thai market for smartphones is highly saturated, while the tablet market is stagnating due to longer replacement cycles. The two sectors have been impacted by the increasing penetration of large-screen phablets in the market. European companies looking to enter the Thai smartphone or tablet markets cannot simply compete on prices but should offer new or niche features not yet available.
◼ As the demand for more broadband, better speed and sounder connection increases, telecommunication operators are drafting their plans for improving infrastructure. Operators are expected to roll out various infrastructure initiatives, including installations of new base transreceiver stations, radio base stations, and supporting facilities. This presents an immediate opportunity for European companies.
◼ The movement towards 5G is making good progress in Thailand. Although the development is slower than in Singapore or Malaysia, the fact the Thai government wants to employ commercial 5G networks by 2020 opens new opportunities for a wide range of industries, particularly in smart city applications, industrial automation, IoT, healthcare and telemedicine.
European Companies
Siemens
Siemens is a German industrial conglomerate and a global technology powerhouse that operates across the areas of electrification, automation and digitalisation in power & gas, wind & renewables, power generation, energy management, building technologies, mobility, digital factory, process industries & drives, finance, healthcare, and real estate sectors. The company is active in more than 200 countries.
Siemens’s trading relations with Thailand began in 1900, when the company signed an agency agreement with the local company B. Grimm & Co. to sell Siemens products and systems,
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domestically. In 1995, Siemens domestic presence has expanded when Siemens Limited Thailand was established to offer a complete portfolio of products, systems, solutions and services to Thailand. Currently, Siemens Limited Thailand employs about 1,100 employees and oversees business activities in Thailand, Cambodia, Myanmar and Laos. The subsidiary is more than 95% owned by its parent company with the remaining shares being held by local companies. In Thailand, its activities cover six business segments: Information & Communications; Automation & Control; Power; Transportation; Medical & Lighting.145
The Information & Communications segment is further segmented into the following business units:
◼ Information Communications Mobile, which deals with all mobile businesses in Thailand, Cambodia, Myanmar and Laos. The service offered by this unit consists of network planning, maintenance services and consultation services; and
◼ Information Communications Network, which focuses on telecommunication services for carriers and enterprises, including IP, data network, fixed lines, and others.
Despite its significant presence in the market, Siemens has no subsidiary for telecommunication services. The company distributes its products through established network of local companies/ distributors.
145 madb.europa.eu/madb/viewDoc
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MitkoTik
Figure 22: MikroTik Wireless Solutions Product Offering Source: MikroTik
MitkoTik is a Latvian company, which was established in 1995 to develop routers and wireless ISP systems. Nowadays, the company provides software and hardware equipment for the internet connectivity in most countries around the world. The company disseminates its products worldwide through the network of licensed distributors as well as e-commerce channels. In Thailand, the company has around 30 licensed distributors, the majority of which are based in Bangkok.
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3.6 Telecommunication Services
3.6.1 Market Overview
The telecommunication services sub-sector in Thailand is vibrant and rapidly evolving. The market is a complex commercial environment, with a mix of state-owned companies and private operators functioning under a wide variety of corporate and regulatory structures and interfaces. As highlighted in the previous chapter, mobile penetration is very high and remains the dominant form of communication in Thailand.
The total generated revenue for telecommunications services is forecasted to expand from US$ 10.7 billion (EUR 8.7 billion) in 2016 to US$ 14.2 billion (EUR 11.6 billion) in 2022, growing at a CAGR of 2.9%.146 The growth is expected to be driven by the mobile segment, which represents over 70% of the total telecommunication services spending, as well as by fixed broadband adoption. At the same time, according to the latest report from GlobalData, traditional fixed and mobile voice revenues will decline due to price reductions and a shift towards IP/OTT- based communications. 147
Looking at the communication service market as a whole, the largest sub-market is represented by wireless service accounts, which grew by 2.4% to THB 257 billion (EUR 7.7 billion) in 2019 from THB 251 billion (EUR 7.5 billion) in 2018. This growth was due to competition in data price plans (non-voice) to attract users to change from prepaid to post-paid and consumers using more mobile data.148
Fixed broadband grew at 4.7% to THB 79 billion (EUR 2.4 billion) in 2019 from THB 75 billion (EUR 2.2 billion) in 2018 as telecommunications service provider AIS offered bundled packages to compete with True Corporation, the second largest player in Thailand. The country’s
146 https://industrytoday.co.uk/it/telecom-and-pay-tv-services-revenue-in-thailand-will-grow-at-a-cagr-of-2-9---3--in-bt--during-2017-2022 147 https://www.developingtelecoms.com/tech/optical-fixed-networks/7693-new-solutions-drive-thai-telecom-services-market.html 148 https://www.bangkokpost.com/business/1670068/communications-market-to-reach-b629bn
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fixed-broadband subscribers were estimated at around 10.17 million in 2019, up from 9.23 million the previous year.149
In February 2017, the country also launched its first IoT network, which offers location tracking, smart metering and smart street lighting services in Phuket and Bangkok. The building of the long- range IoT network, one of the first commercial deployments of its kind in South East Asia, was given to South Korea’s SK Telecom and Thailand’s CAT Telecom.150
Mobile Data Services
Thailand represents the second largest smartphone market in South East Asia, and consequently the scene is rather saturated and the market is considered mature.
Competition in the market is fierce, with several players like Xiaomi, Honor, Lava and Wiko entering the Thai market in the past two years.
Thai telecom operators are likely to continue to face pressure on mobile-service revenues, beset by slowing growth in data revenue. The country's third-largest operator, Total Access Communication Public Company in particular, will be the most affected as a large proportion of its income comes from mobile revenues. Advanced Info Service Public Company, which is the largest mobile operator, is expected to diversify more into fixed broadband services to temper the risk of slower growth in the mobile segment.151
Growth in data subscriptions started to slow down in 2019 on higher 4G device penetration. Furthermore, data usage growth for existing subscribers did not always end up making higher revenues, seeing as there is such strong competition in data tariff offerings.
Fixed Voice Telephony
Thailand’s fixed line services meet international standards, especially in urban areas like Bangkok. There is an abundance of fixed lines for offices and residences. The Bangkok metro
149 Ibid. 150 http://www.computerweekly.com/news/450412720/Thailand-to-roll-out-IoT-network-in-April-2017 151 https://www.businesstimes.com.sg/asean-business/maturing-thai-mobile-market-raises-risks-for-telcos
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area is served by two fixed line operators: TOT and TRUE. Local calls are not timed and carry a charge of THB 3 (EUR 0.09) per call (from fixed line number to fixed line number). Areas outside Bangkok are served by the TUT and TT&T. The fixed line network has a total capacity of over 8 million lines. In addition, public telephones are available nationwide.
Fixed phone subscriptions in Thailand are on a steady decline in Thailand, with the latest data showing 2.9 million subscribers in 2018. The main players in the fixed voice telephone segment are TRUE, which also offers mobile services, and two state-owned enterprises, Triple T Broadband, and TOT.
Figure 23: Thailand Fixed Line Subscribers Source: NBTC
Internet Access
Over the last decade, broadband speeds have picked up fast in Thailand. According to data from the Speedtest Global Index, Thailand ranks high on internet access: 24th globally for fixed broadband speeds, with download speeds at 97.11 Mbps and upload speeds at 68.03 Mbps. For
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mobile internet speeds, Thailand ranked 80th worldwide in December 2019, with 23.43 Mbps download speeds and 11.97 Mpbs upload speeds.152
Figure 24: Key Figures from the We are Social Global Digital Report 2019 Source: HootSuite, We are Social
Thais are a remarkably active population online, ranking number one globally for mobile banking users, second for cryptocurrency ownership and third in mobile commerce, according to the Global Digital Report 2019. Thailand boasts 55 million active mobile internet users and 92 million mobile subscribers. The country’s average daily time on the internet (on any device) is estimated at 9.11 hours, divided in 3.44 hours watching television and 1.30 hours listening to streaming music.153
Commercial IoT Networks
Thailand is a leader in the ASEAN region for the adoption of Narrowband IoT (NB-IoT). Three key players are TRUE Corporation, CAT Telecom and Advanced Info Service (AIS), pursuing NB-IoT technology. IoT adoption is expected to grow increasingly as new IoT network operators enter the market.
152 https://www.speedtest.net/global-index 153 https://www.bangkokpost.com/tech/1631402/thailand-tops-global-digital-rankings
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At the Thailand IoT summit in August 2019, the Thai government released a white paper outlining the framework for the country’s IoT technology, ecosystem and applications – guiding the establishment of IoT startups and stimulating the Thai digital economy. IoT applications in Thailand will be focused on smart city applications such as smart-street lighting, smart water meters, smart electricity meters, smart parking, smart smoke detectors, trash bin monitoring and manhole cover monitoring.154
Recent developments include the following:
◼ In 2019, Sigfox, a French IoT network operator selected Thai Things on Net to use its technology. Things on Net operates under the Platt Nera umbrella, a company specialised in outsourcing and systems integration. The Sigfox network spans 65 countries, and the company has entered Thailand after Singapore and Malaysia. Things on Net is planning up to 1,400 base stations in the country by 2020, investing THB 600-800 million (EUR 18 – 24 million) to provide coverage for approximately 85% of the population. At the moment, the company covers Bangkok and seven major cities.155
◼ In 2019, Huawei launched its Ocean Connect IoT platform and cloud system in Thailand. Between 2019-2023 the company will invest an estimated US$ 100 billion (EUR 90.3 billion) to reshape its network architecture to serve its customers. Some applications have been launched over the Ocean Connect platform, which is also geared towards helping system integration partners bring IoT developments to the Thai market faster.156
◼ In October 2019, Intel announced it will heighten investments in Thailand, to support new opportunities arising from AI, IoT and industrial automation, aligned with gaming demand for high performance computers. The company has doubled his staff in Thailand to boost every segment of the industry, focusing on consumers in the IoT and ecommerce industries.157
154 https://www.bangkokpost.com/business/1727187/promising-start-for-thai-iot-adoption 155 https://futureiot.tech/sigfox-enters-thai-iot-market-with-local-partnership/ 156 https://www.nationthailand.com/business/30374436 157 https://www.nationthailand.com/business/30377308
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Local Players
Jasmine International (Jasmine) is a Thailand-based information and communication technology company, which provides mainly system integration, outsourcing, solution & service provision and telecommunications-equipment distribution to serve the needs of telecom service providers. It is one of Thailand’s leading broadband operators.
Since its founding in 1982 as an engineering and management consultancy company, Jasmine has quickly entered the telecommunications sector as a major turn-key contractor in telecommunications projects for government agencies and state-owned enterprises. With its restructuring in 1997, rapid growth of telecommunications and the Internet, as well as the liberalisation of the telecommunications industry, Jasmine began seeking additional licenses and partners with a view of becoming a fully- integrated Internet Protocol Communications Services Provider.
Advanced Info Service Pcl (AIS) is Thailand’s largest GSM mobile phone operator with nearly 40 million customers, and the leading provider of fixed broadband and voice & data communications services for residential and business customers. Founded in 1986, AIS operates as a mobile phone network company, providing mobile phone and call centre services, mobile phone sales, and Datanet & Broadband services.
True Corporation (True) is one of the leading Thai telecommunications conglomerates. Its mobile services operation, True Move, is the third-largest in the country. Additionally, its True Visions is the country’s largest cable TV operator, while True Online is its arm for broadband service provision. The company provides telecommunications services in addition to value-added services, such as digital data network, public telephone, multimedia, internet service provision, mobile phone service, and pay TV service. In September 2014, China’s top mobile carrier China Mobile acquired 18% stake in the company, becoming the company’s first major foreign shareholder.
Mu Space is a Thai start-up, which has been recently granted a license by the NBTC to operate and provide services via satellite. The company is the first start-up to acquire such a license,
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and the third company in Thailand after Intouch Holding’s satellite subsidiary Thaicom was granted rights in 1991 and VSAT provider Mobile LTE in early 2017.
3.6.2 EU Entry Opportunities
◼ 3G technology is reaching its limits in Thailand, and subscriptions are decreasing heavily with most consumers adopting 4G. Moreover, Thailand is planning to roll out 5G services in 2020. Therefore, new opportunities may open up for the development of 5G-related infrastructure and value-added services as well as support for the customer base of 4G users.
◼ Even though the telecommunication services market is saturated and may have, to some extent, limited opportunities for growth, there is a market potential through value-added services and linkages to the Internet of Things industry. For example, smart wearables or smart TVs are increasingly popular in Thailand, and the government is heavily investing in its IoT industry, especially in smart city applications and industry automation.
◼ Thailand’s industry is almost exclusively accessible by multi-national corporations with access to global value chains and considerable resource to invest in R&D. Smaller European players might find this industry challenging to access. However, significant opportunities exist for those players that are venturing into the Internet of Things (IoT), such as start-ups and system integrators.
◼ Pre-paid mobile service packages are available in Thailand but they are not popular among locals. Most users of pre-paid services include foreign workers and tourists, as they want the flexibility to pay a lower amount than a monthly subscription.
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European Companies
Ericsson
Ericsson is a Swedish multinational networking and telecommunications company, which offers services, software and infrastructure in information and communications technology for telecommunications operators. The company provides traditional telecommunications and Internet Protocol networking equipment, mobile and fixed broadband, operations and business support services, cable television, IPTV, video systems, and an extensive services operation.
In Thailand, it established its first sales office in the mid-1960s, after years of being represented by an agent. Ericsson’s growth in Thailand has been particularly strong in the 1980s and the first half of the 1990s, as a result of new orders from two new operators, which were awarded the PTT licenses for fixed telephony. Today, the company focuses on offering software and infrastructure services in the fields of mobility, broadband and the cloud.
In 2019 Ericsson and dtac, a Thai GSM mobile phone provider, signed a deal to implement an advanced, customer centric network operations model in Thailand starting from January 2020.158
Vodafone Group
Vodafone Group plc is a UK multinational telecommunications company, with headquarters in London. It predominantly operates services in Asia, Africa, Europe and Oceania. Among mobile operator groups globally, Vodafone ranked fifth by revenue and second (behind China Mobile) in the number of connections (469.7 million) as of 2016.
Vodafone owns and operates networks in 26 countries and has partner networks in over 50 additional countries. Its Vodafone Global Enterprise division provides telecommunications and IT services to corporate clients in 150 countries.
158 https://www.ericsson.com/en/news/2019/10/dtac-selects-ericsson-managed-services-solution-in-thailand
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In 2009, the Vodafone Group and Thailand’s mobile operator DTAC have jointly announced that they have signed a “partner market” agreement, under which DTAC will have exclusive access to Vodafone’s range of products, devices and services in Thailand and will be able to draw on Vodafone’s experience in supply chain management, technology development, the acquisition of enterprise customers as well as improved interconnection between networks. As part of the phased rollout Vodafone will be able to use DTAC’s network to offer seamless voice and data roaming for its customers visiting Thailand through the use of ‘home’ network capabilities. The two companies will cooperate to provide additional support to Vodafone Global Enterprise customers, many of whom have a presence in Thailand. In turn, Vodafone will provide DTAC customers with improved voice and data roaming access across 67 countries. In Asia, Vodafone has existing partner market agreements in Singapore, Hong Kong, Japan, Malaysia and Sri Lanka.
In 2017, the company also rolled out its i-RoamFREE plan to Thailand, which gives users unlimited international roaming.
BT Group
BT Group, headquartered in UK, is the world’s oldest telecommunications company and one of the world’s leading providers of communications services. Its core services include the provision of networked IT services globally as well as local, national and international telecommunications services to its customers for use at home, at work and on the move.
The company is a global leader in managed networked IT services and was named as the Leader in Gartners’ Managed Network Services Magic Quadtrant. Operating in 180 countries with 18,000 employees globally, BT provides IT Network services to more than 7,000 large corporate and public-sector customers from key industry sectors, including Banking & Financial, Government & Health, Consumer Packaged Goods, Logistics and Pharmaceuticals.
BT has been operating in South East Asia for over 30 years. In the region, it has over 1,000 people dedicated to supporting global and regional multinational customer growth and technology plans. To service regional clients, it has offices in Singapore (its regional headquarters), Kuala Lumpur, Jakarta, Bangkok, Ho Chi Minh and Manila. The company has built presence in
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Singapore, Malaysia, Thailand, Indonesia, Vietnam and the Philippines, working with an extensive network of local partners including Starhub, Singtel, Indosat and Metrocom. In the region, it also has 6 data centres, connected to its City Fibre Network in Singapore. In addition, it has Network- to-Network Interface (NNI) capability and coverage in Laos, Cambodia and Myanmar as well as new GPoPs in Manila, Hanoi, Bangkok and Penang.
In Thailand, its core portfolio fields include IP networks, convergence, customer relationship management, conferencing, outsourcing, security, IT transformation and mobility. Its key broad portfolio of technologies and services include IP-based Multi-Protocol Label Switching (MPLS) VPNS, WAN Connectivity, managed LAN and IP Telephony, managed security services and infrastructure outsourcing solutions and services.
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4. Regulations
4.1 Import Procedures
Importing products and services into Thailand requires a relatively shorter timeframe and lower cost when compared to other countries in the region. In the last decade, Thailand has made an effort to streamline its import procedures to encourage trade activities in the market, such as the implementation of an online e-Customs system that enables paperless and centralised custom clearance procedures. Generally, it is encouraged for importers and exporters to make use of a freight forwarder to manage import and export customs clearing in Thailand.
Figure 25: Import procedures in Thailand Source: Thai Customs Department
There are a number of prohibited and restricted items to be imported into, or exported from, Thailand. The list of the items can be obtained from the Thailand Customs Department’s website.159 Import licenses are required for restricted items, many of these include raw materials,
159 http://www.customs.go.th/cont_strc_simple.php?ini_content=individual_160426_01&lang=en&left_menu=menu_individual_submenu_03_01
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industrials, textiles, petroleum products, pharmaceuticals and agricultural produces. An item which does not require an import license may still need to comply with regulations set aside by the relevant departments, agencies or ministries, including additional fees and the requirement to have a certificate of origin. It should be noted that IT imports are exempted from the requirement for a certificate of origin following Thailand’s participation in the WTO IT Agreement.160
In Thailand, it is the duty of importers to arrange for examination and release of imported cargo. According to the Thai Customs Department, imported cargo are only legally entered into Thailand once the shipment has arrived within the port of entry, merchandise delivery has been authorised by Customs, and applicable taxes and duties have been paid. Once a shipment arrives in the country, importers are required to submit a Goods Declaration and supporting documents for imports with a Customs officer at the port of entry.
Taxes and duties are exempted from samples and advertising materials without commercial value. This applies if the samples are not for sale and serve only promotional proposes. However, if those samples and materials are not used or re-exported within six months, taxes and duties are charged.
E-Customs System
As Thailand has been using the e-Customs system, paper documents are no longer needed as data is transferred electronically from the importer’s computer system to the e-Customs system. The steps are outlined below:161
Step 1 – Register to use e-Customs system
In order to register for the system, the importer (either as an individual or business entity) must already possess a ‘digital certificate’. The digital certificate is an electronic signature file used to confirm the identity and authenticity of the sender of electronic documents; it is essential for all companies in Thailand with any online operations, including import and export registration.
160 https://www.wto.org/english/tratop_e/inftec_e/itaintro_e.htm 161 Export.gov (2019). https://www.export.gov/article?id=Thailand-import-requirements-and-documentation
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Once a digital certificate is in place, the importer may proceed to register for the e-Customs system. Companies can choose to either register with the system directly (i.e. at their own office) or through an agent. For the latter option, the agent will handle the registration. When registering to use the e-Customs system directly, the following tasks are required:
◼ e-Customs software must be installed on the company IT system and digital certificates verified
◼ The importer must register with Thai Customs at one of the following: the Registration and Customs Privileges Sub-Division; Customs Procedures and Valuation Standard Bureau; or the General Administration Division at each Customs office
◼ The accuracy and readiness of message exchange with the e-Customs system must be tested
◼ Once tests are completed successfully, the Communication and IT Bureau will issue an e-Customs registration ID, and the process is complete.
Step 2 – Review controlled goods
Two separate checks need to be made before goods are imported: firstly, to identify if goods require an import permit, and secondly, to ascertain if goods are considered ‘red line’.
A range of goods require import permits issued by different agencies prior to their arrival. For example, used motor vehicles and motorcycles require a permit from the Department of Foreign Trade, while imports of medicines and food supplements require permission from the Food and Drug Administration of the Ministry of Health. A rundown of goods that require a permit can be found on the Customs Department website. The government is working to integrate the permit application process into the e-Customs system; currently, around half of Thailand’s government agencies allow electronic permit applications.
The second check required is to establish if the goods to be imported are classified as ‘red line’ goods (as opposed to green line). Red line goods are those considered to be high risk or requiring
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extra certification and verification upon arrival, including foodstuffs, drinks, and plants. It is necessary to provide the following supporting documents when importing red line goods:
◼ Bill of Lading (B/L) or Air Waybill
◼ Invoice
◼ Packing List
◼ Import License (if required)
◼ Certificates of origin
◼ Other relevant documents (e.g. list of ingredients, technical standards certificates, etc.)
There is no definitive list of red line goods; the e-Customs system will inform the importer once the Import Declaration has been submitted (see Step 3). As such, it is important to ensure the correct paperwork is in place for all imports in order to be prepared for a shipment being flagged as red line.
Step 3 – Submission and verification of declaration
Once all documentation is in order, an Import Declaration can be submitted to the e-Customs system along with an arrival report with the information of the carrying vessel. The e-Customs system will then check and verify the submission, identifying any discrepancies and specifying whether the shipment is green line or red line.
Step 4 – Payment of duties and taxes
Thai Customs Tariff Decree B.E. 2530 states that “goods imported or brought into, exported, or taken out of the Kingdom shall be chargeable with and liable to duty”. A number of items are exempt from import duties; a list can be found on the Integrated Tariff Database.
For dutiable goods, payment can be made at the Customs Department of the port of entry or via the e-Payment section of the e-Customs system.
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Step 5 – Inspection and release of cargo
The final step before the cargo is released is an inspection. For green line goods, this is simply an online screening and will take only a few minutes. For red line goods, the supporting documents will have to be presented and the cargo physically examined by customs officials.
4.2 Government Tenders
European companies may participate in government tenders in a number of key sectors in Thailand, including in the ICT sector. Similar to other markets in the region, a key requirement to establishing a trade relationship with the government of the country is to have local representatives with good knowledge of specific procurement requirement and access to procuring agencies. This is due to the decentralised procurement decision by the government in the country, which empowers each agency and department to procure goods and services based on its own needs. There are over 200 such agencies and state enterprises in Thailand, with their own procurement arm. It is therefore difficult to sell to the government without good local representatives with access to these agencies and enterprises.
Public sector procurement however is governed by a set of rules referred to as the Prime Minister’s Office’s Procurement Regulations, which is supposed to have all bidders to be treated equally and without discrimination. It should be noted that Thailand is not a participant of the WTO Agreement on Government Procurement, which unfortunately generates the impression that the procurement government agency provides preferential treatment to certain bidders. In addition, its Buy Thai policy benefits domestic bidders by allocating between 3% and 7% of automatic price advantage in the initial bid round evaluation.
In the bidding process, representatives are considered to be legitimate bidders. Agents would be able to advise European companies on any upcoming attractive tenders in the market and help to ensure that the products and services offered by the European companies meet all the requirements specified in the tender. Whenever allowed by the procuring agency, international companies may submit their bids without an agent. Projects funded by foreign loans are treated
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as international bids. The two-envelope system, where technical and cost evaluations are done separately, is generally used. The lowest bid does not necessarily win a tender, and bids can be accepted or rejected at any time by the agency.
To encourage transparency the government has introduced regulations to create electronic auctions (e-auctions) for government procurement. Through e-auctions, the procuring agency announces through the system that it is looking to buy certain products or services. Bidders can submit their intention via the Internet, and the lowest qualified bidder wins the procurement opportunity. E-auctions must be used for procurements that have a value greater than THB 2 million (EUR 60,000).
An important factor in weighing proposals sent to the government is the provision of after-sale services and trainings for the equipment purchased. European companies submitting their bids to the government are therefore advised to include the costs and expenses for training into their proposal.
4.3 Thailand’s Digital Economy Regulatory Framework
The Thai government launched Thailand 4.0 by enacting the Digital Economy Promotion Act which took effect in January 2017. This act closed the Ministry of Information and Communication Technology (MICT) and replaced it with the Ministry of Digital Economy and Society (MDES). MDES addresses not only IT implementation, but also covers the development of economic and social aspects of digital technologies. MDES has oversight of the new Digital Economy and Society Committee tasked with setting new policy and guidelines under Thailand 4.0, as well as the Government Committee for Cyber-Security, which has passed the new Cybersecurity Act, or the B.E. 2562 (2019) ("Act"), which has entered into force on the 27th of May 2019.162
162 https://www.bakermckenzie.com/en/insight/publications/2019/05/thailand-cybersecurity-act-is-effective
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The following summary describes the Thai ICT landscape legal framework:
E-Commerce
Thailand has already passed several laws governing e-Commerce and the security of electronic transactions.
Thailand enacted the Electronic Transactions Act in 2001 which recognised electronic data messages (such as e-mail) as legally binding for purposes ranging from contractual validity to courtroom evidence. In 2007, the Royal Decree on E-Government Transactions was enacted providing that all government agencies must have security and privacy policies in place to cover all aspects of their electronic services.
This was followed by the Royal Decree Governing Control and Supervision of Electronic Payment Service Business (Electronic Payment Services Decree or EPSD) which went into effect in 2009. The EPSD introduced oversight of the electronic debit service business which, prior to this Royal Decree, was not addressed by any of the financial, credit card, or banking regulations that already existed. In 2010, a new Royal Decree on Security in Electronic Transactions was also enacted. This new law established three levels of security (High, Intermediate, and Basic) with varying security protocols that must be met by operators according to each level. The new Royal Decree also identifies different business categories and addresses the security level applicable to each group for purposes of compliance with sufficient security protocols in electronic transactions.
In 2017 the government passed amendments to the Electronic Transactions Act which expand the binding effect of digital communications in transactions and as evidence, particularly to include “automated” electronic communications as binding notwithstanding the absence of human involvement – even in the case of two automated systems communicating with each other. It also further clarifies certain aspects of the methods required for verifying electronic communications. Finally, it expands the authority of the Electronic Transaction Development Agency to initiate policy and oversee implementation of the law with extended powers of investigation, but subject to the continuing oversight of the Electronic Transactions Commission.
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In 2019, Reuters reported the government will be seeking to impose a Value Added Tax (VAT) to e-commerce businesses in 2020, aiming to collect US$ 93 – 131 million a year from the effort.163
In terms of data protection, a company seeking patent registration of its business method in the e-commerce market will find that the Thai Patent Act currently does not grant patents to any computer programmes nor to any type of business method. However, computer programmes, including data protection technologies used to safeguard company information from unauthorised access or reproduction, may be protected automatically under the Thai copyright protection system.
Cryptocurrency
In March 2018, the Cabinet approved the principles of the drafts of two Royal Decrees, one to regulate digital currencies, including cryptocurrencies, transactions, and initial coin offerings (ICOs), and the other to amend the Revenue Code to collect capital gains taxes on cryptocurrencies. The Decrees require all digital asset transactions, including those of digital asset exchanges, brokers, and dealers, to be registered with the relevant authorities.164
163 https://www.reuters.com/article/us-thailand-tax-ecommerce/thailand-plans-e-commerce-tax-next-year-idUSKCN1VG0ZM 164 https://www.linklaters.com/en/insights/blogs/fintechlinks/2018/may/thailand-formally-regulates-cryptocurrencies-and-digital-tokens
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Figure 26: Thailand Regulatory Regime for Digital Assets and Cryptocurrencies Source: Baker Mckenzie
In January 2019, the Security and Exchange Commission (SEC) granted four licenses to Bitcoin Co, Satang Corporation Bitkub Oline Co ltd and Coins TH Co. The first three are operating as cryptocurrency exchanges while Coins TH Co will function as a cryptocurrency broker.165 In March that same year the SEC approved the first Initial Coin Offering (ICO) portal and announced it was developing Securities Token Offerings (STO) regulations.166
165 https://www.leaprate.com/cryptocurrency/regulation-cryptocurrency/new-cryptocurrency-regulations-in-thailand/ 166 https://blockonomi.com/thailand-sec-greenlights-ico-portal/
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The SEC has also committed to amending the 2019 Securities and Exchange Act to include cryptocurrency and digital assets, including scripless transactions into the primary market – enabling smoother digital asset securities trading.167
In August 2019, the government announced it would bring crypto-currency under anti-money laundering rules in an effort to prevent criminals from turning their proceeds into digital assets to avoid detection.168
Fintech169
Thailand’s Fintech jurisdiction is comparatively advanced compared to its peers in South East Asia and the Asia Pacific. Banks and institutions offer mobile payments, mobile banking and other retail applications, and electronic payment methods are popular and diffused widely in the country. Under the 1992 Financial Institutions Business Act, financial service providers categorised as financial institutions are subject to mandatory supervision and authorisation by the Bank of Thailand. Electronic payment service providers are required to obtain separate businesses licenses as well.
The national legislative assembly of Thailand is still developing the draft “Promotion of Digital Technology Business bill.” If and when the bill passes, it will encompass the following institutions:
◼ (Specialised) financial institutions
◼ Business supervised by the SEC
◼ Life insurance companies and insurance brokers
◼ Casualty insurance companies and brokers
◼ Electronic payment firms
◼ Business authorised to operate in the regulatory sandbox
167 https://blockonomi.com/thailand-sec-rregulations-cryptocurrency/ 168 https://www.coindesk.com/thailand-to-bring-cryptocurrency-under-anti-money-laundering-rules 169 https://iclg.com/practice-areas/fintech-laws-and-regulations/thailand
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While awaiting the new Draft bill, Fintech businesses will operate under general regulations. Fintech companies that are regulated under Thai Law are electronic payment services firms – under the 2017 Payment Systems Act, Peer-to-peer lending platforms, under section 5, No. 58 of the announcement of the revolutionary council and digital asset firms, regulated by the 2018 Royal Decree on digital asset businesses.
In 2019, the Thai office of the Insurance Commission proposed legislative drafts to enable InsurTech firms to be specifically regulated in the insurance industry. Insurance companies located abroad would be barred from acquiring customers in Thailand, unless the company operates through a licensed Thai-based insurance company or through their own branch office in the country.
Telecommunications
Government control over Thailand telecommunications services have been consolidated since 2001 under the National Broadcasting and Telecommunications Business Act (NBTA), first under a loosely constituted National Telecommunications Commission and then in 2010 under a stronger independent regulator renamed the National Broadcasting and Telecommunications Commission (NBTC). Legislation relevant to the telecommunications sector includes the Act on the Organisation to Assign Radio Frequency and to Regulate Broadcasting and Telecommunications Services 2010 (the NBTC Act) and the Telecommunications Business Act 2001 (the Telecommunications Business Act).170
Thailand currently defines three types of telecoms licences:
◼ Type 1 licence, for telecommunications business operators who provide telecommunications services without operating a telecommunications network. There are no foreign ownership restrictions for this type of license under the 1999 foreign Business Act. The license is valid for 5 years.
170 https://gettingthedealthrough.com/area/39/jurisdiction/60/telecoms-media-thailand/
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◼ Type 2 licence, for operators who provide services to a specific group of customers with or without operating a telecommunications network. In this case, foreign ownership is limited to 49% of total shares. This license is valid for 15-25 years.
◼ Type 3 licence, for operators who operate a network providing services to the general public. If an operator wants to provide telephone numbers they will have to acquire separate NBTC licenses. Type 3 license restrictions and the period of validity are the same as type 2 licenses.171
Voice over IP (VoIP)
The National Telecommunications Commission issued two notifications governing VoIP services operating within Thailand. The first in 2005 authorised all licensed internet service providers (ISPs) to offer VoIP services as part of their ISP licensing—except for VoIP services that require new telephone numbers to be assigned. The only requirement was that the ISP notify the appropriate government authority of intention to offer such service. The second in 2007 applied to VoIP using newly-allocated telephone numbers, placing such services within the same application and licensing requirements as fixed line telephone services.
Data Privacy
Data privacy in Thailand had always been implemented through a patchwork of legal provisions incorporated into the laws for various sectors, e.g. financial, health, government, e-commerce, telecom, etc. The only general law providing for data privacy appears in the Constitution. The 2017 Constitution provides individual right to enforcement of privacy rights under Section 25.
The new Personal Data Protection Act (PDPA) has become legally effective as of 2018. This is the first general law applicable to the protection of personal data. The act provides much stricter notice and consent requirements, security protocols, and restrictions on the collection, use and disclosure of personal data. The draft law also provides for fines as high as THB 2 million (EUR 60,000) and possible imprisonment up to 3 years for violations of the law. The new law is modelled after similar European laws, and offers greater clarity as to what is required for proper
171 https://iclg.com/practice-areas/telecoms-media-and-internet-laws-and-regulations/thailand
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legal consent as well as specifying the rights of data owners to review, and potentially withdraw their consent for continuing use of their personal data. Tied in with the changes to the Computer Crimes Act relating to spam, this new law will greatly reduce the use of personal data for uninvited marketing.
Finally, the new PDPA does expressly authorise the transfer of personal data across borders without any special consent provided it is necessary to accomplishing the approved purpose, and is to a country with equal or better data protection laws.
Digital Crimes and Cybersecurity
The Computer Crimes Act enacted in 2007 (CCA) sought to address unlawful conduct within the digital world, from hacking to spam, and apply rules for Internet Service Provider (ISP) liability in cases of violations of law occurring on the internet. The CCA has already been amended as part of the Thailand 4.0 laws; the changes became effective on May 24, 2017. Fines and penalties under the new law remain the same except for an increased fine for spam.
The CCA defines an ISP as (1) one who provides internet access or computer communication services; or (2) one who provides computer data storage. MICT Notification (2007) expanded the definition of ISP to include basically everyone: All entities within Thailand which offer internet access, computer communication, or data storage to their staff (whether through their own servers or through third party services).
CCA Section 15 further prescribes that any service provider who “intentionally supports or gives consent” to the commission of the offences through computer systems under his control shall be liable to the same penalty as the offender. This is a problem for commercial ISPs and public chat forums that cannot easily track and/or quickly remove unlawful content posted by users.
Since May 2019, the new Cybersecurity Law is also in force. The Act will allow the Thai government to track, monitor, and access digital data if it deems that ‘cyber threats’ are damaging to the critical digital infrastructure of the Kingdom. Obligations of private organisations under this Act are as follows:
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◼ Provide the names and contact details of key stakeholders who own, use, or possess computer systems;
◼ Conform to code of conduct and cybersecurity standards as prescribed by law;
◼ Conduct thorough risk assessment; and
◼ Notify instances of cyber threats to stakeholders.172
The Act further defines different obligations for companies working in specific sectors such as financial services, public services or national security. If a company is affected by a cyberthreat, it has the responsibility to investigate the affected data, control the systems that have been threatened or affected and engage in risk mitigation.
172 https://silklegal.com/thailands-new-cybersecurity-law-comes-into-full-effect/
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5. Annex
5.1 List of Useful Contacts
Ministry of Science and Technology Rama VI Ratchathewi Bangkok 10400, Thailand Tel: +66 2 333 3700 Website: www.most.go.th
Ministry of Digital Economy and Society Chaengwatthana Government Complex, Building B Chaengwatthana Road, Laksi Bangkok 10210, Thailand Tel: +66 2 141 6747 Fax. +66 2 141 3809 E-mail: [email protected] Website: http://www.mdes.go.th
Electronic Government Agency 17th Floor, Bangkok Thai Tower Building 108 Rangnam Road, Thanon Phayathai, Ratchathewi Bangkok 10400, Thailand Tel: +66 2 612 6000 Fax : +66 2 612 6011-12 E-mail: [email protected] Website: www.ega.or.th
Thailand Board Of Investment 555 Vibhavadi-Rangsit Rd., Chatuchak Bangkok 10900, Thailand Tel: +66 2 553 8111 Fax: +66 2 553 8222 E-Mail: [email protected] Website: http://www.boi.go.th
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Digital Economy Promotion Agency The Government Complex Ratthaprasasanabhakti Building, 9th Floor 120 Chaengwattana Road, Laksi Bangkok 10210, Thailand. Tel: +66 2 141 7101 Fax: +66 2 143 8059 E-Mail: [email protected] Website: www.sipa.or.th
Software Park Thailand (SW PARK) 99/31 Moo 4 Software Park Building Chaengwattana Road, Klong Gleua, Pakkred Nonthaburi 11120, Thailand Tel: +66 2 583 9992 Email: [email protected] Website: http://www.swpark.or.th
The Association of Thai ICT Industry 128 Phayathai Plaza Building, Phayathai Road Khwang Thung Phyathai, Khet Ratcha Thewi Bangkok 10400, Thailand Tel: +66 2 216 5991-2 E-mail: [email protected] / [email protected] Website: www.atci.or.th
Thai Game Software Industry Association 141/10 Sakulthai Building, Surawong Rd, Bangrak Bangkok 10500, Thailand Tel: +66 2 234 3033 Email: [email protected] Website: http://tga.in.th/
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5.2 Starting a Business in Thailand
Finding a Distributor in Thailand
One good way to establish a local presence is by working with agents and distributors in Thailand. Qualified agents and distributors can be found for nearly all kinds of products. A number of Thailand-based agents cover the ASEAN region as well as Thailand.
Thailand-based trade associations, chambers of commerce, and foreign commercial offices within EU Member State embassies are all good places to start the search for a distributor in Thailand. International business consultants with experience in helping foreign companies can also provide invaluable service by facilitating introductions to qualified distributors. It is always best to meet a prospective distributor in person, and to check references.
Setting up a Business in Thailand
Thailand represents an attractive business market for foreign investors who want to set up their enterprises. Persons who desire to open a company in Thailand are advised to study the local legislation before commencing the incorporation process, in order to get acquainted with the main requirements.
The 1999 Foreign Business Act is the main law defining foreign ownership. The law restricts access to certain businesses (such as transport, retail, and wholesale and services) for reasons of security, cultural heritage or perceived competitive disadvantage. Notably, however, 100% foreign-owned businesses are permitted, except in “list 1” activities, which comprises farming, newspaper or radio broadcasting stations, land trading and others. EU companies are advised to review whether their proposed business activity falls under any of the reserved business engagements under Thai law. 173
173 https://uk.practicallaw.thomsonreuters.com/5-500-7895?transitionType=Default&contextData=(sc.Default)
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On May 14, 2019, Thailand’s Cabinet approved the exemption of three categories of service business from Foreign Business License (FBL) requirements. The exemptions permit foreigners to freely engage in some of the previously restricted activities.
The categories of service business to be exempted are:
◼ Provision of loans to affiliates and subsidiary companies;
◼ Lease of office space to affiliates and subsidiary companies, including public utilities; and
◼ Provision of consultation services relating to management, marketing, human resources, and information technology to affiliates and subsidiary companies.174
Thai law recognises five main types of business organisation: ordinary partnership, ordinary registered partnership, limited partnership, limited company and public limited company. The first four types of entity are governed by the Civil and Commercial Code, and the last type by the Public Limited Companies Act of 1992. Moreover, the branch office, representative office and regional office are recognised under the Foreign Business Act BE 2542 (FBA).
The nature of the intended business operations will be an important factor in selecting the appropriate form of business organisation. For a private or public limited company, if 50% or more of the company’s shares are owned by a foreigner, as defined in the FBA, the company will be considered a foreigner and subject to the act, which prohibits the creation of certain business activities unless approval is obtained from the Ministry of Commerce. Foreign investors usually carry on business through a limited company, branch or representative office.175
In case that a foreign company aims to set up a branch office in Thailand, the branch and its head office are treated as the same legal entity under Thai law. The branch will be considered a permanent establishment of the foreign corporation in Thailand. The head office will be liable for tax on direct transactions in Thailand, even where the branch is not involved.
174 https://www.tilleke.com/resources/thailand-relax-foreign-business-restrictions-services-provided-affiliates 175 https://uk.practicallaw.thomsonreuters.com/5-500-7895?transitionType=Default&contextData=(sc.Default)
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Generally, European companies have the following options for business formation:
◼ Sole Proprietorship: The sole proprietorship is a registered business owned by one person, who is also the operator of the business. Even though foreigners can do business as a Sole Proprietorship, it may be hard to incorporate if the business does not meet the requirements.
◼ Partnership: Thai and European concepts of partnership are broadly similar. Even though registering partnerships is easier than registering other business structures, the partnerships cannot give work permits to foreigners. They also cannot open corporate bank accounts under the company’s name. Thailand provides for three general types for partnerships: unregistered ordinary partnerships, registered ordinary partnerships and limited partnerships.
▪ Unregistered ordinary partnership: Within this partnership, all partners will be jointly liable for all obligations of the partnership. Also, the unregistered ordinary partnership is not considered a legal entity. The partners are still held accountable for any mishaps.
▪ Registered ordinary partnership: It is the type of partnership that requires registration with the authorities. With registered ordinary partnerships, the business has legal rights, duties, and liabilities separate from all partners.
▪ Limited partnership: This type of partnership has two types of partners: unlimited liability partners and limited liability partners. The limited liability partners will be liable only to the amount of capital that the said partners contributed to the partnership. The unlimited liability partners will be liable no matter how much capital the partners contributed to the partnership.
◼ Limited Company: There are two types of limited companies in Thailand: private and public. The first is governed by the Civil and Commercial Code, and the second by the Public Company Act. The Limited company is the most popular registration method for foreigners who wish to do business in Thailand. With this business structure, the company’s shareholders will be limited to the amount, if any, of unpaid shares respectively held by them. Also, the directors of the company can apply for work permits.
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▪ Private Limited Companies in Thailand have basic characteristics similar to those of Western corporations. A private limited company is formed through a process which leads to the registration of a Memorandum of Association (Articles of Incorporation) and Articles of Association (By-laws), as its constitutive documents. A minimum of seven shareholders is required at all times. A private limited company may be wholly owned by foreigners. However, in those activities reserved for Thai nationals, foreigners’ participation is generally allowed up to a maximum of 49%. The registration fee for a private limited company is THB 5,500 (EUR 165) per million THB of capital.
▪ Public Limited companies registered in Thailand may, subject to compliance with the prospectus, approval, and other requirements, offer shares, debentures and warrants to the public and may apply to have their securities listed on the Stock Exchange of Thailand. A minimum of 15 shareholders is required for the formation and registration of the memorandum of association of a public limited company, and the shareholders must hold their shares for a minimum of two years before they can be transferred. The Board of Directors of a public limited company must have a minimum of five members, at least half of them must be Thai nationals. The registration fee is THB 2,000 (EUR 60) per million THB of capital.
◼ Joint venture: A joint venture may be described in accordance with general practice as a group of persons (natural and/or juristic) entering into an agreement in order to carry on a business together. It has not yet been recognised as a legal entity under the Civil and Commercial Code. However, income from the joint venture is subject to corporate taxation under the Revenue Code, which classifies it as a single entity.
◼ Representative Office: A representative office is limited in engaging in non-profit activities. In order to form a representative office, at least one of the following purposes would need to be sought for the purposes of limited “non-trading” activities: the business is to search for the source of goods or services in Thailand for the headquarters overseas; to check the quality and quantity of the product ordered by the headquarters overseas; to give advice to the headquarters about the goods to order; to supply the information of the headquarters’
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products to the customers in Thailand; to report the economic movement in Thailand to the headquarters.
Registering your business
Once the type of business formation has been decided, the business needs to proceed with the registration process via Trade Register, hosted by the Department of Business Development under the Ministry of Commerce in Thailand.
Several steps must be completed in order to begin the registration procedure, such as: drafting the company’s articles of association, naming directors and a company’s secretary. Also, the company must register with the local authorities for Value Added Tax and at the social contributions. Registering a company in Thailand can take some time (around 7 days for a private company and up to 30 days for a public company). The first step is to select and reserve a company name, which is then valid for 30 days.
Additionally, the following documents need to be prepared and submitted before the company can be registered:
◼ Articles of Association
◼ Memorandum of Association
◼ Application form and list of shareholders
◼ New director form signed by each director
◼ Declaration of Business operation form
◼ Company name reservation
◼ Details of the offices and branches of one’s business
Before a business can be registered, at least 25% of the initial investment capital must be also paid into a corporate bank account. The business owner also needs a company stamp, which acts as the signature to certify company documents. These are produced by specialist chop makers, and cost between THB 400-800 (EUR 12-24), depending on exact chop specifications.
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The Thai Board of Investment offers useful guidelines in English to navigate the company registration process (www.boi.go.th/newboi/en/index). In general, the procedure for business registration is described in the table below:
Procedure Time to complete
1. Apply for permission to sue company name 2 days
2. Deposit paid-in capital in a bank 1 day
3. Obtain a corporate seal 4 days
4. Get approval for memorandum of association and apply to register the company as a 1 day legal entity (final registration) at the Private Limited Companies Registrar
5. Register with the Revenue Department for Tax 2 days
6. Register for social security and Workmen’s Compensation Fund at the Social Security 1 day Office, Ministry of Labour 7. Submit company work regulations to the Office of Labour Protection and Welfare of 21 days the Ministry of Labour at the district where the head office of the company is located
Table 10: Required Steps for Registering Business in Thailand Source: Doing Business and Investing in Thailand Guide
Once the business has been registered, the business owner has to notify the tax authorities of the company. The business owner has up to 60 days to notify the revenue department and get a tax ID card for the business. If the revenue turnover is high, one may also need to register for VAT. The website of the Board of Investment describes the accounting and financial reporting responsibilities of business owners (please follow the link here for more information).176
Incentives
The BOI is the principal government agency for encouraging investment in the country. Foreign investment in Thailand does not require approval from the BOI, provided the necessary operating permits have been obtained. Investors should determine whether the incentives available through the BOI outweigh the various restrictions involved. Potential foreign investors who meet any or all the following criteria are eligible for BOI incentives:
176 http://www.boi.go.th/newboi/en/index/
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◼ If a foreign investor significantly strengthens Thailand’s balance of payments position, especially through production for export.
◼ If a foreign investor is able to support the development of the country’s resources;
◼ If a foreign investor contributes to the increase in employment rate due to jobs generated by the investment;
◼ If a foreign investor is able to establish investment operations in provinces outside the Bangkok metropolitan area;
◼ If a foreign investor is able to contribute to the energy conservation or replace imported energy supplies;
◼ If a foreign investor is able to establish or develop industries that form the base for further technological supplies;
◼ If foreign investment activities are considered important and necessary by the government.
The BOI offers promotions to investors categorised as either tax incentives, or non-tax privileges.
◼ For businesses whose activities fall under the BOI’s priority industries, or who operate in Export Processing Zones (EPZ), corporate income tax and import tariff incentives are offered.
◼ All BOI-Promoted projects are offered non-tax privileges including guarantees, protection, permissions and services.
◼ Incentives are offered to foreign and domestic businesses that operate within the designated estate area or Thailand’s Network of Industrial Estates.
Other Tax Benefits Offered to Foreign Direct Investment
Thai Law states that a company that chooses to register under Thai law shall enjoy various tax benefit schemes such as:
◼ Income tax holiday from three to eight years for business with Investment Promotion Privileges.
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◼ Reduction or exemption of import duties on raw material and imported machinery for business with Investment Promotion Privileges or industries setting up in Export Processing Zone and Free Trade Zone.
◼ Double deduction for the cost of transportation, electricity and water supply for industries with Investment Promotion Privileges.
◼ 200% deduction for the cost of hiring qualified researchers doing research and development projects.
◼ 150% deduction for the cost of employee’s training in order to improve human capital.
◼ Small and medium size companies can choose to deduct special initial allowance on the date of acquisition for computer (40%), facility (25%) and machinery (40%).
As part of the Thai government’s effort to encourage foreign investment in the country, some types of companies are given entitlement to a corporate tax rate (mandatory 30% rate) reduction as follows:
◼ For regional operating headquarters company, 10% corporate income tax on net profits, interest, and royalties for the Regional Operating Headquarters.
◼ For SME companies, reduced company tax rates for small and medium enterprises (SMEs) are as follows:
▪ 15% on net profits up to THB 1 million (EUR 30,000);
▪ 25% on net profits of THB 1 to 3 million (EUR 30,000 to 90,000)
▪ 30% on net profits above THB 3 million (EUR 90,000).
◼ Listed companies, reduced tax rates for companies listed on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI) are as follows:
▪ 25% for companies listed on the SET from Sept 6, 2001 to Dec 31, 2005;
▪ 20% for companies listed on the MAI from Sept 6, 2001;
▪ The reduced rate will be applicable for five consecutive accounting periods only.
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◼ Venture capital companies investing in SMEs:
▪ Corporate tax exemptions are granted;
▪ Dividends received from SMEs and gains arising from the transfer of shares in SMEs are granted exemption from corporate tax.
Thailand's electronics industry has been a recipient of government support for many years. Incentives under the Investment Promotion Policy 2015-2021 include exemption from import duties on raw materials and components, and exemption from corporate income tax for projects particularly in industrial zones and there are special incentives for firms manufacturing goods not yet made in Thailand. For instance, microelectronics design and embedded design are exempt from corporate income tax for eight years under the 2015-2021 plan.177,178,179
Overall, projects in the field of electronic design, embedded systems & software, cloud service, data centre, software park and science park will enjoy 8-year corporate income tax exemptions (not subject to the corporate income tax exemption cap), as well as exemptions of import duty on machinery and import duty on raw or essential materials used in manufacturing export products, and non-tax incentives. The manufacturers operating in advanced technology electrical products with the capability of connecting with the internet network will be offered a 5-year corporate income tax holiday, exemptions of import duty on machinery and import duty on raw or essential materials used in manufacturing export products, as well as non-tax incentives. Investors in the field of electronic devices for wireless/optic fibre telecommunication are granted 8-years of corporate income tax holiday, exemptions of import duty on machinery and import duty on raw or essential materials used in manufacturing export products, as well as non-tax incentives. Enterprises in the e-commerce industry will be offered non-tax incentives.
Within the context of the digital content sector, the Thai government is very interested in attracting foreign investment. It provides certain non-tax benefits such as easy access to visas, work permits, and permission for 100% foreign ownership.
177 http://www.aseanbriefing.com/news/2015/08/19/thailands-new-investment-promotion-policies-open-a-new-door-to-foreign-investors.html 178 http://www.boi.go.th/upload/content/Korea%20Road%20show%202015%20as%20of%2020042015%20ver%20Final_updated_64404.pdf 179 https://www.tresor.economie.gouv.fr/File/410048
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Recognising the importance of the IT sector to the future development of the country, the software sector has also been classified as an activity of special importance and benefit to the country. Projects in embedded software are granted an eight-year corporate income tax holiday without being subject to the corporate income tax exemption cap. In addition, exemptions of import duty on machinery and raw or essential materials used in manufacturing export products, as well as non-tax incentives are available. Projects in enterprise software and/or digital content receive a five-year corporate income tax holiday without being subject to the corporate income tax exemption cap, exemption of import duty on machinery and import duty on raw or essential materials used in manufacturing export products, as well as non-tax incentives.180
Tariffs
Thailand has a harmonised tariff regime as a WTO member. Thailand operates a two-tier tariff system: Tariff duties on goods are levied on numerous import items and on an ad valorem or a specific rate basis, whichever is higher. The cost values and quantities of items are generally determined by invoices of suppliers or manufacturers, however the customs authority reserves the right to re-evaluate the value of goods when they are found valued significantly lower than market prices.181
Thailand’s average applied Most Favored Nation (MFN) tariff rate was 12.5% ad valorem in 2017. An estimated 30% of Thailand’s MFN tariff schedule involves duties of less than 5%, and 30% of tariff lines are MFN duty free, including chemicals, electronics, industrial machinery, and paper.182
The majority of imported articles are subject to two different taxes: tariff duty and Value Added Tax (VAT). Tariff duty is applied by multiplying the CIF value of the goods by the duty rate. This is added to the value of the goods to determine a final tax. VAT is then levied on the total sum of the CIF value, duty and excise tax, if any. Goods imported for re-export are generally exempt from import duty and VAT.
180 http://www.boi.go.th/index.php?page=pdf_page&menu_id=100 181 https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Thailand/Doing-business/Tariffs-and-regulations 182 https://www.export.gov/article?id=Thailand-Import-Tariffs
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5.3 Useful Statistics
Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 175,104 157,325 134,054 132,617 147,209 China 59,212 47,602 45,854 46,303 56,467 Viet Nam 37,840 28,169 15,317 17,749 17,956 Indonesia 15,114 14,547 13,687 12,904 14,098 Japan 13,534 16,481 12,287 12,359 11,026 Germany 1,099 5,056 3,702 1,143 7,249 Philippines 5,436 4,312 5,750 5,576 6,889 Spain 285 1,487 1,067 954 5,129 Malaysia 10,790 6,662 4,869 5,594 4,465 Taipei, Chinese 4,727 3,954 5,033 4,672 4,160 United States of 4,797 5,102 4,902 3,277 3,390 America Table 11: Imports of Printers - for computer output, not multi-functional, separate units (HS Code 844332) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 664,345 624,086 334,758 243,879 287,033 Germany 187,598 210,678 96,880 60,016 73,972 United States of 183,861 172,049 61,315 40,784 58,023 America Netherlands 87,139 60,014 58,420 49,251 57,318 Japan 112,037 84,767 58,488 45,371 47,781 Hong Kong, China 20,055 13,745 13,481 12,403 8,766 China 3,756 2,184 3,473 3,395 5,817 Singapore 8,543 7,112 4,242 4,628 5,808 Korea, Republic of 4,641 5,776 6,295 4,015 4,763 Australia 9,575 9,224 3,442 3,432 3,660 Brazil 7,209 4,614 1,801 1,578 3,282 Table 12: Exports of Printers - for computer output, not multi-functional, separate units (HS Code 844332) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 520,182 623,311 599,946 799,273 885,385 China 510,769 615,793 591,622 791,898 874,187 Malaysia 497 620 1,219 1,017 4,230 Japan 3,738 2,222 3,688 2,456 1,634 United States of 1,778 779 929 1,048 1,384 America Taipei, Chinese 829 717 277 720 622 Korea, Republic of 11 22 26 252 593 Hong Kong, China 266 644 361 105 484 United Kingdom 230 973 196 176 398 Israel 2 8 7 2 349 Germany 363 306 643 385 329 Table 13: Imports of Laptop and notebook computers (HS Code 84713020) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 75,720 69,903 74,074 173,686 203,297 Malaysia 31,839 43,071 38,172 140,364 167,882 Myanmar 12,458 10,569 10,337 10,269 13,628 Australia 13 21 2,207 33 8,673 Lao People's 6,633 7,600 6,272 5,160 4,899 Democratic Republic Cambodia 7,306 3,295 4,401 4,704 4,487 Singapore 11,553 2,475 10,904 11,396 1,319 United Arab Emirates 1,446 201 41 277 825 Hong Kong, China 507 692 623 336 794 United States of 404 99 117 191 342 America Japan 152 129 163 133 149 Table 14: Exports of Laptop and notebook computers (HS Code 84713020) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 1,078,025 924,570 804,256 987,693 1,141,100 China 988,982 862,422 754,189 944,297 1,090,986 Viet Nam 62,523 45,577 34,065 23,924 21,044 Taipei, Chinese 1,545 1,514 634 1,875 8,264 Malaysia 2,175 2,054 2,764 1,730 5,035 Japan 4,402 2,562 4,018 5,317 4,851 United States of 3,340 2,211 1,867 2,216 2,058 America France 138 165 894 2,258 1,945 Singapore 1,517 603 694 842 1,042 Hong Kong, China 1,420 1,215 701 222 862 Korea, Republic of 5,772 815 422 536 802 Table 15: Imports of Multimedia portable players - audio, video, software downloading (HS Code 847130) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 104,708 123,881 130,621 184,285 221,672 Malaysia 34,374 55,135 52,257 140,424 170,379 Myanmar 16,227 18,158 20,709 13,139 17,584 Australia 86 55 2,255 67 8,674 Lao People's 9,537 11,340 9,126 7,612 7,255 Democratic Republic Cambodia 14,956 9,133 6,704 5,769 6,545 Singapore 13,570 9,582 22,455 13,533 5,387 United States of 5,247 5,864 3,845 326 1,503 America Hong Kong, China 4,630 2,993 4,133 1,043 1,111 United Arab Emirates 1,504 780 42 284 829 China 112 138 453 458 635 Table 16: Exports of Multimedia portable players - audio, video, software downloading (HS Code 847130) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 91,041 90,392 121,912 131,911 136,710 China 72,010 72,667 107,124 98,956 106,162 Singapore 6,840 4,196 1,552 2,191 9,894 United States of 3,446 5,901 4,706 6,961 6,078 America France 142 648 296 2,215 2,452 Israel 84 267 77 101 2,159 United Kingdom 696 313 723 191 1,872 Taipei, Chinese 1,080 610 1,110 1,559 1,490 Germany 657 780 771 1,123 1,187 Switzerland 51 125 203 28 805 Japan 1,936 1,069 1,086 9,935 775 Table 17: Imports of Desktop computer systems, personal computers (PCs) and tower computer systems (HS Code 847149) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 8,415 7,359 7,794 11,934 9,772 Hong Kong, China 1,370 1,495 2,492 3,088 3,389 Singapore 2,192 999 1,282 1,715 1,738 Lao People's 2,053 1,691 1,517 1,445 1,067 Democratic Republic United States of 306 171 642 3,889 961 America Germany 78 1,451 434 178 514 Malaysia 117 269 98 161 449 Myanmar 418 48 170 147 348 New Zealand 12 0 207 347 340 Japan 227 308 154 170 329 India 54 34 12 37 159 Table 18: Exports of Desktop computer systems, personal computers (PCs) and tower computer systems (HS Code 847149) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 10,866 14,095 18,171 18,923 24,566 China 9,463 12,820 17,026 17,538 22,797 Viet Nam 0 1 5 1 441 Germany 124 67 115 89 316 United States of 66 99 186 177 234 America Taipei, Chinese 196 262 130 191 195 Singapore 144 212 77 451 104 Indonesia 20 66 41 34 95 Japan 507 206 181 147 82 Hong Kong, China 41 38 32 26 65 Korea, Republic of 18 10 45 17 42 Table 19: Imports of Keyboards - for computer systems, separate units (HS Code 84716030) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 1,305 755 669 385 2,999 United Arab Emirates 0 0 0 0 536 United States of 85 98 54 61 502 America Qatar 0 0 0 0 426 Egypt 0 0 0 0 415 Russian Federation 0 0 0 0 220 France 0 2 0 0 167 Hong Kong, China 69 20 108 103 109 Brazil 0 0 0 19 108 United Kingdom 0 1 1 0 75 Myanmar 15 25 16 50 69 Table 20: Exports of Keyboards - for computer systems, separate units (HS Code 84716030) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 18,324 22,521 26,674 27,584 44,024 China 17,629 21,705 26,052 26,207 41,237 Japan 97 121 78 85 1,480 Taipei, Chinese 137 178 242 386 635 Germany 42 93 34 296 430 United States of 47 60 43 71 85 America Singapore 54 193 20 344 39 Hong Kong, China 101 64 43 27 28 Korea, Republic of 9 8 19 42 18 Austria 4 1 0 0 11 Switzerland 22 1 6 5 11 Table 21: Imports of Mouse, trackballs, joysticks for computers and other X-Y coordinate input devices - separate units (HS Code 84716040) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 86 103 140 159 305 Myanmar 26 12 5 3 85 Singapore 2 1 7 19 54 Lao People's 12 21 13 41 52 Democratic Republic Japan 1 39 36 0 48 Malaysia 0 0 0 1 26 United Arab Emirates 0 0 0 0 13 Cambodia 9 12 3 12 9 China 0 1 2 0 4 United States of 1 0 0 1 4 America Kuwait 0 0 0 0 3 Table 22: Exports of Mouse, trackballs, joysticks for computers and other X-Y coordinate input devices - separate units (HS Code 84716040) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 1,301,769 1,313,646 1,181,910 1,607,484 2,044,976 Malaysia 695,527 638,476 588,606 703,511 1,115,411 China 334,016 383,059 340,496 380,363 289,401 United States of 11,549 9,737 10,200 10,807 19,425 America Taipei, Chinese 13,725 11,191 11,710 15,447 19,263 Singapore 24,329 26,173 29,309 26,632 16,805 Philippines 40,659 23,971 38,917 22,161 14,079 Japan 22,609 10,578 12,543 10,579 11,518 Ireland 26,021 26,638 16,956 15,521 9,486 Korea, Republic of 6,009 2,186 2,856 31,082 6,975 Mexico 4,154 4,119 4,754 10,226 3,430 Table 23: Imports of Central storage units - for example RAID (Redundant Arrays of Inexpensive Disks) systems (HS Code 847170) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 11,733,603 10,939,807 9,843,617 11,254,385 12,184,839 United States of 3,174,723 3,234,972 2,943,513 3,240,104 3,683,960 America Hong Kong, China 2,488,481 2,246,147 2,264,907 2,673,399 3,243,242 China 1,241,430 1,012,588 849,125 1,423,148 1,434,170 Netherlands 1,086,049 933,147 747,994 809,949 940,191 Malaysia 113,858 127,478 293,016 400,428 475,168 Mexico 478,680 584,754 492,124 420,275 301,846 Japan 335,436 288,844 300,204 291,568 280,502 Czech Republic 374,490 361,513 293,527 259,913 251,665 Germany 281,067 203,028 172,385 225,906 232,610 India 172,669 151,355 136,406 144,224 165,786 Table 24: Exports of Central storage units - for example RAID (Redundant Arrays of Inexpensive Disks) systems (HS Code 847170) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 8,669 4,739 3,448 4,518 7,133 Taipei, Chinese 131 59 210 1,921 3,739 China 5,216 2,960 2,398 1,950 1,787 Germany 2 2 9 15 158 United States of 241 101 77 75 106 America Hong Kong, China 11 5 1 16 23 Singapore 111 204 86 29 22 Mexico 107 122 108 17 12 Philippines 2,003 891 310 25 10 Japan 74 18 50 16 10 Malaysia 88 79 21 12 7 Table 25: Imports of Optical disk drives including cd-rom drives & cd-r drives (HS Code 84717040) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 5,517 3,746 676,831 170,957 689 United States of 605 378 279,734 12 274 America Australia 26 0 7,401 4,059 192 Germany 0 1 49,645 23,639 119 Hong Kong, China 22 7 816 3,002 35 Malaysia 675 584 4,879 2,346 21 Myanmar 250 230 201 11 19 Lao People's 25 22 10 96 11 Democratic Republic Cambodia 24 34 29 20 7 Singapore 46 157 2,395 377 3 Viet Nam 3,429 2,276 682 2 3 Table 26: Exports of Optical disk drives including cd-rom drives & cd-r drives (HS Code 84717040) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 115,363 110,835 136,366 224,310 250,777 Malaysia 2,741 7,257 10,418 31,035 96,179 China 34,427 27,565 42,601 61,554 42,840 United States of 1,259 717 826 823 6,496 America Korea, Republic of 107 155 96 29,673 5,761 Philippines 5,526 5,300 6,126 2,143 5,187 Singapore 7,828 7,350 8,136 7,475 3,400 France 5 62 16 26 2,612 Czech Republic 20 42 7 1,192 1,222 Taipei, Chinese 589 634 766 4,159 822 Japan 674 785 376 480 804 Table 27: Imports of Hard disk drives (HS Code 84717020) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 4,708,446 5,904,692 6,631,384 7,259,334 7,363,234 United States of 1,334,030 1,872,122 1,942,639 2,178,205 2,286,614 America Hong Kong, China 811,326 1,199,335 1,540,141 1,514,640 1,503,942 China 785,404 531,281 454,161 876,681 905,242 Netherlands 112,903 246,436 587,641 620,775 814,362 Malaysia 12,236 39,750 242,975 356,493 435,106 Japan 205,791 204,883 224,036 232,323 225,330 Mexico 315,313 424,572 332,735 259,933 177,481 Czech Republic 174,568 249,372 193,593 141,524 139,947 Germany 139,306 107,162 105,494 138,052 127,573 United Arab Emirates 1,505 21,540 87,587 93,664 92,336 Table 28: Exports of Hard disk drives (HS Code 84717020) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 7,706 8,827 19,573 65,878 54,832 China 6,754 7,917 18,945 64,442 53,545 Taipei, Chinese 76 172 50 278 447 United States of 382 115 50 651 244 America United Kingdom 229 193 286 270 218 Hong Kong, China 28 141 98 58 178 Malaysia 8 9 10 19 21 Mexico 0 0 0 6 21 Japan 19 13 13 16 15 Korea, Republic of 3 5 2 3 14 Singapore 85 79 24 25 11 Table 29: Imports of Sound cards & video cards (HS Code 84718070) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 23 14 60 294 516 China 0 0 0 0 209 Singapore 1 1 0 67 209 Lao People's 2 0 0 28 61 Democratic Republic Myanmar 19 7 57 25 21 Malaysia 0 1 0 166 14 United States of 1 0 0 0 1 America Hong Kong, China 0 0 0 7 1 Japan 0 5 0 0 0 Korea, Republic of 0 0 0 1 0 France 0 0 0 0 0 Table 30: Exports of Sound cards & video cards (HS Code 84718070) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 514,089 616,076 490,401 472,842 571,120 China 251,945 341,730 258,296 233,401 290,348 Japan 60,981 61,241 63,843 64,179 70,959 Germany 32,010 45,402 23,714 22,322 30,933 United States of 25,808 16,253 15,786 15,816 23,155 America Philippines 15,294 18,358 15,704 12,485 18,080 Malaysia 12,050 14,617 16,163 14,006 17,823 Taipei, Chinese 8,692 8,428 11,182 13,177 13,072 Korea, Republic of 7,510 20,336 12,915 14,209 9,423 Italy 18,549 5,592 6,290 6,514 9,336 Finland 7,535 14,044 6,266 6,173 7,665 Table 31: Imports of Power supply units (PSUs) for computer units, separate units (HS Code 850440) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 1,037,771 1,135,781 1,025,918 1,251,864 1,469,272 United States of 236,101 254,121 237,573 324,409 368,805 America China 135,483 95,645 149,594 201,085 241,761 Netherlands 72,108 77,206 97,117 119,713 132,174 Mexico 45,873 98,336 114,205 97,482 104,794 Viet Nam 5,981 59,799 10,410 70,980 103,331 Hong Kong, China 129,624 126,613 77,176 81,330 77,639 Japan 50,603 66,118 42,747 42,499 54,842 India 43,859 43,453 43,483 41,317 53,272 Slovakia 40,749 38,138 24,473 27,742 49,191 Hungary 28,195 17,971 15,186 22,323 35,002 Table 32: Exports of Power supply units (PSUs) for computer units, separate units (HS Code 850440) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 963,038 1,363,886 1,601,432 1,905,376 1,840,935 China 491,042 891,837 1,041,557 964,833 1,034,386 Malaysia 88,360 53,815 67,494 158,797 159,926 Japan 37,534 39,646 50,926 59,580 54,610 United States of 51,601 50,657 48,479 54,796 45,607 America Taipei, Chinese 15,660 21,345 23,101 31,501 40,051 Mexico 16,607 33,313 29,353 30,017 23,857 Singapore 5,108 5,968 5,043 7,068 8,854 Israel 8,308 4,695 4,501 12,838 8,200 Viet Nam 1,746 3,493 4,496 5,010 7,306 Philippines 2,268 949 3,623 6,764 7,069 Table 33: Imports of Network Communication System (HS Code 851762) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 694,533 608,099 600,423 1,114,103 1,286,606 United States of 500,310 409,238 367,226 662,926 637,440 America Viet Nam 944 522 3,521 89,999 165,456 Netherlands 44,746 41,150 24,840 53,504 114,131 Hong Kong, China 8,420 24,400 46,798 101,029 107,304 Korea, Republic of 12,124 11,526 10,942 38,770 57,336 Mexico 762 3,676 21,461 18,084 42,030 India 8,571 7,356 9,314 17,291 25,576 China 19,850 17,667 16,400 22,366 22,920 Japan 25,948 25,217 24,439 24,294 21,492 Malaysia 11,115 12,886 20,898 25,517 14,855 Table 34: Exports of Network Communication System (HS Code 851762) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 17,259 19,475 19,835 26,248 21,227 China 12,507 13,520 15,505 20,172 16,421 Indonesia 1,755 1,600 1,541 1,541 1,532 Mexico 577 290 315 1,663 523 France 230 202 287 443 462 Germany 281 260 118 109 338 United States of 583 1,784 592 303 316 America Viet Nam 44 4 1 9 221 United Kingdom 116 154 143 93 202 Japan 85 216 162 121 188 Taipei, Chinese 96 79 126 134 171 Table 35: Imports of Speakers - single loudspeaker, separate units (HS Code 851821) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 4,529 4,958 5,008 5,158 4,850 India 2,912 3,144 2,311 2,515 2,430 Myanmar 81 156 595 468 725 Lao People's 332 621 900 755 640 Democratic Republic Brazil 381 177 496 470 343 Viet Nam 136 181 176 117 145 China 28 47 65 164 126 Australia 3 64 3 141 110 Hong Kong, China 54 113 94 90 64 United States of 1 2 49 69 39 America Singapore 89 80 123 72 31 Table 36: Exports of Speakers - single loudspeaker, separate units (HS Code 851821) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 47,680 48,485 50,573 57,894 78,983 China 37,261 37,740 38,866 45,811 64,396 Viet Nam 19 33 125 2,102 2,928 France 294 457 1,039 798 2,308 Malaysia 1,584 2,262 2,355 1,269 2,112 Indonesia 1,608 1,306 1,891 1,487 1,937 United States of 1,161 873 1,238 1,104 1,320 America Mexico 2,974 2,455 2,003 2,230 823 Germany 511 925 933 535 725 United Kingdom 464 574 844 739 507 Italy 608 453 470 814 436 Table 37: Imports of Speakers - multiple loudspeaker, separate units (HS Code 851822) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 782 1,095 848 806 2,017 Lao People's 71 324 50 64 411 Democratic Republic Cambodia 71 32 84 41 396 Myanmar 41 77 70 64 291 Hong Kong, China 93 235 181 120 276 Papua New Guinea 0 0 0 0 134 Singapore 42 62 32 20 117 Germany 1 5 2 3 81 Australia 12 2 45 41 56 Viet Nam 23 56 91 67 53 New Caledonia 0 0 3 19 40 Table 38: Exports of Speakers - multiple loudspeaker, separate units (HS Code 851822) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 81,713 61,547 45,994 39,828 34,174 China 59,196 45,715 37,193 31,229 25,694 Germany 153 61 53 114 1,832 Taipei, Chinese 2,934 2,181 1,620 1,222 1,194 United States of 1,338 2,311 914 521 974 America Indonesia 8,742 4,343 2,023 728 938 Korea, Republic of 3,539 1,808 789 997 890 Malaysia 2,815 2,545 1,244 863 854 Japan 1,824 806 682 334 503 Canada 2 15 172 37 200 Mexico 31 17 49 38 170 Table 39: Imports of Laser Discs for recording or reproducing video (HS Code 852190) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 20,283 10,735 7,176 5,453 6,291 Indonesia 6,996 3,402 2,585 1,157 1,979 Japan 3,542 3,344 2,425 1,901 1,905 United States of 1,428 563 449 314 933 America Myanmar 613 356 423 117 329 India 5,701 475 213 755 324 Lao People's 0 0 54 1 153 Democratic Republic Cambodia 31 1 0 6 148 China 230 193 163 98 98 Sri Lanka 116 66 50 93 89 Taipei, Chinese 106 160 28 34 86 Table 40: Exports of Laser Discs for recording or reproducing video (HS Code 852190) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 628,769 594,413 745,052 841,899 1,159,723 Singapore 625,433 592,040 743,326 840,041 1,158,058 Taipei, Chinese 1,973 1,155 733 522 612 United States of 66 88 99 192 357 America Germany 193 241 227 272 237 Japan 338 284 185 257 164 Israel 197 214 253 294 109 China 332 98 112 153 76 Sweden 1 12 9 42 50 Malaysia 22 48 15 44 30 Korea, Republic of 2 6 14 8 9 Table 41: Imports of Optical Media/Disks for Computer Use (HS Code 852341) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 12,892 12,085 24,333 26,325 25,523 Singapore 9,708 11,135 22,919 25,617 23,956 Japan 435 622 736 523 592 China 20 0 88 2 212 Hong Kong, China 46 29 65 26 197 Pakistan 0 0 0 0 165 Viet Nam 354 82 5 0 129 Malaysia 114 27 124 15 58 United States of 88 57 20 36 53 America Cambodia 16 0 1 0 40 Australia 60 3 23 12 28 Table 42: Exports of Optical Media/Disks for Computer Use (HS Code 852341) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 19,607 44,369 23,347 26,432 26,425 China 10,359 15,351 7,553 14,598 13,472 Taipei, Chinese 16 162 1,459 3,483 4,676 Israel 924 19,968 9,129 3,577 3,413 United States of 905 739 691 596 720 America Germany 103 320 52 1,337 487 Japan 977 457 36 38 433 Malaysia 56 288 338 286 393 United Kingdom 453 53 129 243 330 Mexico 720 1,939 283 270 229 Sweden 0 40 0 1 213 Table 43: Imports of Network Communication Devices in Wired or Wireless Network such as LAN and WAN (HS Code 851769) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 50,607 55,617 50,650 33,903 26,737 United States of 12,345 10,971 11,750 8,303 10,664 America China 6,050 4,401 7,604 5,754 5,415 Netherlands 22,841 24,033 19,629 10,823 3,712 Japan 1,365 1,486 1,788 5,041 2,645 Denmark 0 29 0 5 1,032 India 760 665 972 704 541 Singapore 1,177 837 944 880 519 Korea, Republic of 127 175 181 262 433 Russian Federation 14 0 40 31 384 Hong Kong, China 698 3,588 2,467 1,233 370 Table 44: Exports of Network Communication Devices in Wired or Wireless Network such as LAN and WAN (HS Code 851769) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 136,501 132,388 96,729 77,769 86,476 Singapore 27,133 24,737 20,444 20,872 24,420 Japan 23,826 20,516 17,732 16,755 17,277 United States of 17,288 11,792 10,973 8,719 9,622 America Germany 29,009 37,276 14,781 4,944 5,142 China 5,343 5,633 12,417 5,216 4,843 Hong Kong, China 565 511 1,170 3,892 4,434 Korea, Republic of 715 5,284 1,042 1,238 4,045 Ireland 7,711 7,250 6,086 3,053 3,684 Taipei, Chinese 5,366 3,048 2,421 1,479 2,610 Netherlands 10,424 5,089 791 4,203 1,787 Table 45: Imports of Software on CD or DVD - programs or data, music or other sound (HS Code 852349) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 4,299 5,454 6,714 4,514 3,625 Lao People's 596 1,079 3,009 1,616 1,467 Democratic Republic Japan 198 151 36 844 390 Malaysia 38 72 131 294 286 China 34 87 46 48 263 Taipei, Chinese 93 18 140 52 211 Viet Nam 265 248 485 512 178 Hong Kong, China 98 30 662 114 176 Singapore 545 238 356 443 154 United States of 88 94 125 104 106 America Cambodia 424 133 160 36 73 Table 46: Exports of Software on CD or DVD - programs or data, music or other sound (HS Code 852349) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 79,804 87,546 98,478 125,884 159,251 China 37,555 31,242 42,300 48,546 56,966 Taipei, Chinese 19,624 18,275 21,926 29,631 29,794 Japan 12,464 17,714 20,818 21,966 28,999 Netherlands 8 11,652 4,491 6,941 8,115 Malaysia 629 884 865 3,719 7,976 Israel 25 5 114 6 7,633 Hungary 54 40 174 5,128 3,406 Mexico 13 49 638 2,607 3,258 Singapore 2,020 997 464 1,447 2,261 Germany 1,671 2,264 638 1,288 1,978 Table 47: Imports of Flash memory cards (HS Code 852351) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 5,456 3,305 5,557 2,313 4,675 Hong Kong, China 390 146 384 244 1,867 Viet Nam 251 431 912 1,075 1,217 Germany 401 767 368 65 557 Singapore 362 143 192 65 258 United Kingdom 0 34 1,168 90 118 Spain 0 0 0 0 112 Japan 54 123 183 202 67 Australia 155 58 58 54 64 United States of 128 97 718 120 55 America Philippines 1 1 5 7 53 Table 48: Exports of Flash memory cards (HS Code 852351) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 14,025 12,043 13,498 22,322 16,255 China 5,233 4,350 6,862 13,241 8,559 Germany 913 1,024 2,160 3,108 3,435 Canada 622 900 165 134 936 Taipei, Chinese 2,123 998 970 662 850 Japan 194 270 73 2,275 546 United Kingdom 73 63 307 467 387 United States of 1,166 1,218 318 341 340 America Philippines 2 1 1 718 262 Korea, Republic of 762 435 254 138 162 Ireland 4 16 50 55 77 Table 49: Imports of Web cameras (HS Code 85258010) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 119,684 108,642 131,249 143,589 99,346 Japan 15,117 10,305 19,861 45,272 74,531 United States of 49,875 52,899 70,435 66,966 21,982 America Netherlands 22,994 25,156 29,226 23,167 743 Belgium 11 24 214 199 687 Australia 596 608 745 569 208 Malaysia 182 82 170 152 203 Indonesia 65 0 274 266 162 Singapore 1,911 2,068 3,252 1,599 129 China 13,534 4,982 5,243 3,421 106 South Africa 0 0 65 101 73 Table 50: Exports of Web cameras (HS Code 85258010) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 295,443 309,746 353,341 461,746 421,557 China 94,358 115,702 164,649 253,464 214,059 Japan 89,818 63,700 69,251 70,616 66,572 Indonesia 2,208 1,320 13,385 20,556 28,162 Germany 5,394 4,990 11,318 12,769 16,567 Viet Nam 1,830 9,585 16,979 16,421 9,672 Taipei, Chinese 20,228 25,663 10,168 10,475 9,166 United States of 6,879 7,768 6,170 7,691 8,869 America Philippines 858 373 528 9,264 6,872 Korea, Republic of 5,785 3,166 2,860 6,590 4,677 Poland 2,217 3,392 2,619 2,377 3,974 Table 51: Imports of Television cameras, digital cameras and video camera recorders (HS Code 852580) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 1,846,269 1,714,771 1,442,176 1,408,978 1,339,667 United States of 401,061 368,450 351,018 377,588 383,510 America Japan 224,835 189,326 141,349 181,027 202,045 Netherlands 359,501 345,395 262,034 226,882 197,830 China 303,783 280,435 263,848 209,294 164,374 India 47,872 62,543 52,094 58,057 62,974 United Arab Emirates 56,410 66,703 49,449 45,956 38,135 Czech Republic 10,276 25,607 24,167 30,530 35,047 Singapore 52,367 45,975 36,944 29,637 32,337 Korea, Republic of 61,417 46,084 32,780 36,898 26,665 Hungary 30,545 19,128 18,903 19,811 26,323 Table 52: Exports of Television cameras, digital cameras and video camera recorders (HS Code 852580) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World World 15,552 14,585 18,730 19,111 Germany 3 709 1,200 2,498 8,643 China 1,686 1,587 3,732 6,214 7,054 Japan 204 110 167 468 3,127 Taipei, Chinese 6,427 3,946 4,259 3,087 2,323 United States of 4,956 2,682 1,248 1,613 2,192 America Korea, Republic of 720 1,335 341 506 1,328 South Africa 19 20 192 135 752 Canada 30 47 43 377 523 Singapore 315 2,158 1,468 1,022 427 France 4 119 143 261 296 Table 53: Imports of Radio navigational aid apparatus (HS Code 852691) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 1,518 10,209 9,586 5,608 9,867 Japan 2 57 295 4 6,915 Malaysia 98 4,059 2,025 954 1,035 Taipei, Chinese 138 208 406 380 707 United States of 17 23 1,261 988 559 America Australia 9 3,136 2,974 1,884 178 Germany 0 0 18 43 162 Singapore 336 1,861 1,616 828 86 United Arab Emirates 0 31 57 40 51 Oman 0 0 7 49 47 New Zealand 105 222 143 6 37 Table 54: Exports of Radio navigational aid apparatus (HS Code 852691) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 2,159 4,066 2,807 3,135 4,111 China 1,630 3,429 2,320 2,779 3,808 Malaysia 219 408 347 285 248 Viet Nam 0 8 61 41 44 Germany 115 126 27 4 5 France 1 0 0 0 1 Indonesia 49 1 0 0 1 Italy 3 0 0 0 1 Switzerland 0 0 0 0 1 Korea, Republic of 7 1 17 0 0 Lao People's 1 6 0 0 0 Democratic Republic Table 55: Imports of MP3 players - no video capability, with radio (HS Code 852713) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 4,248 643 1,077 1,437 1,450 Japan 356 42 207 661 396 Myanmar 496 337 509 357 379 Indonesia 5 1 65 56 165 Malaysia 6 66 26 70 128 United States of 3,149 9 16 61 73 America Cambodia 55 18 8 61 60 China 4 9 17 43 51 Hong Kong, China 42 66 34 21 41 Taipei, Chinese 2 1 42 12 34 India 0 0 56 14 34 Table 56: Exports of MP3 players - no video capability, with radio (HS Code 852713) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 15,096 7,539 3,985 1,279 10,321 China 1,097 2,311 2,857 1,262 10,304 Mexico 48 0 8 0 7 Singapore 6 0 0 1 5 Hong Kong, China 6 0 0 3 3 Taipei, Chinese 0 8 14 0 2 Romania 21 0 0 0 0 Australia 0 0 0 1 0 Belgium 0 0 2 0 0 Indonesia 13,814 5,212 1,068 0 0 Israel 23 0 0 0 0 Table 57: Imports of Television PCI (Peripheral Component Interconnect) tuner card assemblies (HS Code 85287111) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 551 1,341 579 213 14 Lao People's 0 0 0 201 12 Democratic Republic Singapore 0 0 0 4 2 Malaysia 59 37 0 0 0 Taipei, Chinese 0 0 0 0 0 India 0 1,304 578 9 0 Australia 0 0 1 0 0 Canada 479 0 0 0 0 France 14 0 0 0 0 Table 58: Exports of Television PCI (Peripheral Component Interconnect) tuner card assemblies (HS Code 85287111) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 1,215,323 649,119 277 0 0 Japan 388,074 201,831 71 0 0 United States of 95,459 50,218 50 0 0 America Korea, Republic of 17,855 8,575 43 0 0 Taipei, Chinese 25,526 13,759 32 0 0 China 360,542 214,134 22 0 0 Germany 40,218 20,630 12 0 0 Singapore 22,341 23,002 12 0 0 Hong Kong, China 7,163 3,156 7 0 0 Australia 5,608 4,995 7 0 0 Israel 2,567 2,521 4 0 0 Table 59: Imports of Electronic personal organisers - or palm-held portables (HS Code 85437090) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 14,747 117,414 0 0 0 United States of 42,817 48,986 0 0 0 America Japan 11,100 28,701 0 0 0 Denmark 8,602 6,710 0 0 0 Cambodia 7,131 4,091 0 0 0 Indonesia 1,280 3,329 0 0 0 Sweden 1,219 2,980 0 0 0 Italy 101 2,824 0 0 0 Singapore 4,404 2,794 0 0 0 China 7,744 2,558 0 0 0 Pakistan 3,209 1,945 0 0 0 Table 60: Exports of Electronic personal organisers - or palm-held portables (HS Code 85437090) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2014 in 2015 in 2016 in 2017 in 2018 World 2,946,200 2,642,188 2,138,925 2,025,438 2,301,39 Philippines 215,312 355,406 450,461 564,135 749,080 Malaysia 1,084,391 1,025,920 863,362 615,477 573,242 China 869,530 641,529 467,542 458,875 547,037 Japan 64,628 53,339 40,533 79,678 146,949 United States of 464,568 319,566 132,759 87,590 81,870 America Hong Kong, China 94,829 86,178 51,344 52,768 57,273 Singapore 33,279 39,263 35,530 46,972 43,893 Taipei, Chinese 25,737 26,311 23,749 22,276 34,063 Ireland 7,858 15,221 12,660 9,123 11,341 Korea, Republic of 9,759 4,392 3,708 19,962 9,148 Table 61: Imports of Central processing units (CPUs) - can be complete with heatsink and/or fan, separate units (HS Code 847330) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2014 in 2015 in 2016 in 2017 in 2018 World 3,567,295 3,252,392 3,069,221 2,780,375 2,625,661 Malaysia 797,141 708,940 655,441 719,446 698,072 China 720,028 663,074 662,141 589,367 539,349 United States of 471,248 469,753 502,087 491,391 520,123 America Hong Kong, China 799,529 676,152 472,835 224,512 177,972 Philippines 150,591 137,109 172,618 162,940 166,859 Ireland 112,006 94,235 86,305 78,848 90,454 Mexico 171,108 181,085 146,440 117,579 77,678 Singapore 80,014 87,813 109,652 97,976 75,294 France 63,722 47,058 54,758 54,142 55,801 Netherlands 56,138 46,077 46,808 63,853 47,837 Table 62: Exports of Central processing units (CPUs) - can be complete with heatsink and/or fan, separate units (HS Code 847330) Source: Trade Map Unit: US Dollar thousand
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