Information & Communication Technologies Thailand Market Study
APRIL 2018
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The information and views set out in this study are those of the author(s) and do not necessarily reflect the official opinion of the European Union. Neither the European Union institutions and bodies nor any person acting on their behalf may be held responsible for the use which may be made of the information contained therein. The contents of this publication are the sole responsibility of EU Gateway | Business Avenues and can in no way be taken to reflect the views of the European Union. The purpose of this report is to give European companies selected for participation in the EU Gateway | Business Avenues Programme an introductory understanding of the target markets countries and support them in defining their strategy towards those markets. For more information, visit www.eu-gateway.eu.
EU Business Avenues in South East Asia
Central Management Unit
Thailand Market Study
April 2018
Submitted to the European Commission on 6 April 2018
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Table of Contents_Toc511739543
LIST OF FIGURES ...... 5 LIST OF TABLES ...... 6 LIST OF ABBREVIATIONS ...... 8 1. EXECUTIVE SUMMARY ...... 9 2. WHAT ARE THE CHARACTERISTICS OF THAILAND? ...... 13 3. MARKET OVERVIEW AND EU ENTRY OPPORTUNITIES ...... 20
3.1 THAILAND’S INFORMATION AND COMMUNICATION TECHNOLOGIES (ICT) SECTOR ...... 20 3.2 INFORMATION TECHNOLOGY EQUIPMENT ...... 62 3.2.1 Market Overview ...... 62 3.2.2 EU Entry Opportunities ...... 76 3.3 IT SERVICES ...... 79 3.3.1 Market Overview ...... 79 3.3.2 EU Entry Opportunities ...... 87 3.4 IT SOFTWARE...... 90 3.4.1 Market Overview ...... 90 3.4.2 EU Entry Opportunities ...... 105 3.5 TELECOMMUNICATIONS EQUIPMENT ...... 111 3.5.1 Market Overview ...... 111 3.5.2 EU Entry Opportunities ...... 123 3.6 TELECOMMUNICATION SERVICES ...... 127 3.6.1 Market Overview ...... 127 3.6.2 EU Entry Opportunities ...... 140 4. REGULATIONS ...... 144
4.1 IMPORT PROCEDURES ...... 144 4.2 GOVERNMENT TENDERS ...... 148 4.3 THAILAND’S DIGITAL ECONOMY REGULATORY FRAMEWORK ...... 149 5. ANNEX ...... 154
5.1 LIST OF USEFUL CONTACTS ...... 154 5.2 STARTING A BUSINESS IN THAILAND ...... 156 5.3 USEFUL STATISTICS ...... 166 6. REFERENCES ...... 193
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List of Figures
Figure 1: Map of Thailand ...... 13 Figure 2: EU-Thailand Trade in Goods and Services, 2013-2016 ...... 17 Figure 3: Thailand 4.0 Visualisation ...... 20 Figure 4: Thailand’s Network Readiness Ranking ...... 22 Figure 5: Household ICT users, 2012-2016 ...... 23 Figure 6: Household ICT users by region, 2012-2016...... 24 Figure 7: Percentage of businesses using computers & the internet ...... 24 Figure 8: Computer & internet usage among Thai businesses by size and type ...... 25 Figure 9: Top 3 reasons for using internet among Thai businesses ...... 26 Figure 10: IT graduates in Thailand (% by category), 2016...... 26 Figure 11: Four strategies in developing a digital government ...... 33 Figure 12: IoT in Thailand: Top 5 Industries for IoT market ...... 36 Figure 13:Thai IoT Market: Preferred devices to be connected to internet ...... 37 Figure 14: Thailand’s fintech ecosystem ...... 43 Figure 15: Market share by m2 of data centre space ...... 46 Figure 16: Hardware market forecasts, 2015-2021 ...... 62 Figure 17: APAC household PC penetration, 2016 ...... 68 Figure 18: PC volume forecast, 2015-2021 ...... 73 Figure 19: Secure internet servers per 1 million of population, 2006-2015 ...... 74 Figure 20: IT services market, 2015-2021 ...... 79 Figure 21: Software market, 2015-2021 (in THB) ...... 90 Figure 22: Top 3 largest spenders on computer software ...... 92 Figure 23: Market share of software production and software services, 2016 ...... 93 Figure 24: Digital content revenue (US$ billion), 2014-2017 ...... 99 Figure 25: Thailand’s forecasted game market value, 2017 ...... 101 Figure 26: Manao Software office in Chiang Mai ...... 109 Figure 27: Top 5 smartphone brands in Thailand, 2017 ...... 115 Figure 28: MikroTik Wireless Solutions product offering (visualisation) ...... 126 Figure 29: Thailand’s improvements on ICT Development Index, 2010-2015 ...... 127 Figure 30: Mobile revenues by segments (%), 2008-2017 ...... 131 Figure 31: Thailand mobile subscriber market share, 2016...... 132 Figure 32: Thailand fixed line subscribers, 2017 ...... 134 Figure 33: Thailand fixed line market share by competitor ...... 135 Figure 34: Import procedures in Thailand ...... 144
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List of Tables
Table 1: ASEAN IDI Rankings, 2017 & 2016 ...... 21 Table 2: Thailand’s Rankings on Global ICT Indices ...... 22 Table 3: Computer ownership by business size, 2015 ...... 25 Table 4: Targets for Thailand Digital Economy and Society Development Plan 2016-2020 ...... 32 Table 5: Internet speed and penetration rate among the leading ASEAN countries, 2016 ...... 34 Table 6: Top 10 B2C Websites, 2016 ...... 51 Table 7: Thailand’s e-commerce market, 2016 & 2021 ...... 52 Table 8: Thailand ICT Industry export/ import factsheet, 2010-2016 ...... 53 Table 9: Thailand IT Hardware Trade, 2010-2016 ...... 65 Table 10: Examples of IT hardware companies in Thailand...... 76 Table 11: Software and software service market share by economic sector ...... 94 Table 12: List of major telecommunication equipment distributors in Thailand...... 114 Table 13: Number of people owning smartphones by age group and area ...... 117 Table 14: List of routers distributors of MikroTik in Thailand ...... 121 Table 15: List of Internet suppliers in Thailand having direct links to IIG and NIX ...... 130 Table 16: Permission for license and renewal license fees in Thailand ...... 137 Table 17: Thailand telecommunication annual fee ...... 138 Table 18: Required steps for registering business in Thailand ...... 160 Table 19: Imports of Printers - for computer output, not multi-functional, separate units (HS Code 844332) ...... 166 Table 20: Exports of Printers - for computer output, not multi-functional, separate units (HS Code 844332) ...... 166 Table 21: Imports of Laptop and notebook computers (HS Code 84713020) ...... 167 Table 22: Exports of Laptop and notebook computers (HS Code 84713020) ...... 167 Table 23: Imports of Multimedia portable players - audio, video, software downloading (HS Code 84713090) ...... 168 Table 24: Exports of Multimedia portable players - audio, video, software downloading (HS Code 84713090) ...... 168 Table 25: Imports of Handheld computers incl palmtops & personal digital assistants (PDAs) (HS Code 84713010) ...... 169 Table 26: Exports of Handheld computers incl palmtops & personal digital assistants (PDAs) (HS Code 84713010) ...... 169 Table 27: Imports of Desktop computer systems, personal computers (PCs) and tower computer systems (HS Code 847149) ...... 170 Table 28: Exports of Desktop computer systems, personal computers (PCs) and tower computer systems (HS Code 847149) ...... 170 Table 29: Imports of Keyboards - for computer systems, separate units (HS Code 84716030) ...... 171 Table 30: Exports of Keyboards - for computer systems, separate units (HS Code 84716030) ...... 171 Table 31: Imports of Mouse, trackballs, joysticks for computers and other X-Y coordinate input devices - separate units (HS Code 84716040) ...... 172 Table 32: Exports of Mouse, trackballs, joysticks for computers and other X-Y coordinate input devices - separate units (HS Code 84716040) ...... 172 Table 33: Imports of Central storage units - for example RAID (Redundant Arrays of Inexpensive Disks) systems (HS Code 847170) ...... 173 Table 34: Exports of Central storage units - for example RAID (Redundant Arrays of Inexpensive Disks) systems (HS Code 847170) ...... 173 Table 35: Imports of Optical disk drives incl cd-rom drives & cd-r drives (HS Code 84717040) ...... 174 Table 36: Exports of Optical disk drives incl cd-rom drives & cd-r drives (HS Code 84717040) ...... 174
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Table 37: Imports of Hard disk drives (HS Code 84717020) ...... 175 Table 38: Exports of Hard disk drives (HS Code 84717020)...... 175 Table 39: Imports of Sound cards & video cards (HS Code 84718070) ...... 176 Table 40: Exports of Sound cards & video cards (HS Code 84718070) ...... 176 Table 41: Imports of Power supply units (PSUs) for computer units, separate units (HS Code 850440) ...... 177 Table 42: Exports of Power supply units (PSUs) for computer units, separate units (HS Code 850440) ...... 177 Table 43: Imports of Network Communication System (HS Code 851762) ...... 178 Table 44: Exports of Network Communication System (HS Code 851762) ...... 178 Table 45: Imports of Speakers - single loudspeaker, separate units (HS Code 851821) ...... 179 Table 46: Exports of Speakers - single loudspeaker, separate units (HS Code 851821) ...... 179 Table 47: Imports of Speakers - multiple loudspeaker, separate units (HS Code 851822) ...... 180 Table 48: Exports of Speakers - multiple loudspeaker, separate units (HS Code 851822) ...... 180 Table 49: Imports of Laser Discs for recording or reproducing video (HS Code 852190) ...... 181 Table 50: Exports of Laser Discs for recording or reproducing video (HS Code 852190) ...... 181 Table 51: Imports of Optical Media/Disks for Computer Use (HS Code 852341) ...... 182 Table 52: Exports of Optical Media/Disks for Computer Use (HS Code 852341) ...... 182 Table 53: Imports of Network Communication Devices in Wired or Wireless Network such as LAN and WAN (HS Code 851769)...... 183 Table 54: Exports of Network Communication Devices in Wired or Wireless Network such as LAN and WAN (HS Code 851769)...... 183 Table 55: Imports of Software on CD or DVD - programs or data, music or other sound (HS Code 852349) ...... 184 Table 56: Exports of Software on CD or DVD - programs or data, music or other sound (HS Code 852349) ...... 184 Table 57: Imports of Flash memory cards (HS Code 852351) ...... 185 Table 58: Exports of Flash memory cards (HS Code 852351) ...... 185 Table 59: Imports of Web cameras (HS Code 85258010) ...... 186 Table 60: Exports of Web cameras (HS Code 85258010) ...... 186 Table 61: Imports of Television cameras, digital cameras and video camera recorders (HS Code 852580) ...... 187 Table 62: Exports of Television cameras, digital cameras and video camera recorders (HS Code 852580) ...... 187 Table 63: Imports of Radio navigational aid apparatus (HS Code 852691) ...... 188 Table 64: Exports of Radio navigational aid apparatus (HS Code 852691) ...... 188 Table 65: Imports of MP3 players - no video capability, with radio (HS Code 852713) ...... 189 Table 66: Exports of MP3 players - no video capability, with radio (HS Code 852713)...... 189 Table 67: Imports of Television PCI (Peripheral Component Interconnect) tuner card assemblies (HS Code 85287111) ...... 190 Table 68: Exports of Television PCI (Peripheral Component Interconnect) tuner card assemblies (HS Code 85287111) ...... 190 Table 69: Imports of Electronic personal organisers - or palm-held portables (HS Code 85437090) ...... 191 Table 70: Exports of Electronic personal organisers - or palm-held portables (HS Code 85437090) ...... 191 Table 71: Imports of Central processing units (CPUs) - can be complete with heatsink and/or fan, separate units (HS Code 847330) ...... 192 Table 72: Exports of Central processing units (CPUs) - can be complete with heatsink and/or fan, separate units (HS Code 847330) ...... 192
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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, government support and better user understanding of the offerings is resulting in improved IT and telecoms infrastructure and increased demand.
IT Equipment
Although Thailand’s IT hardware market was negatively affected by depreciation of its currency and political unrest, the sector is resuming its positive growth. The computer hardware market is expected to expand to THB 75.5 billion (EUR 1.95 billion) in 2018, and reach THB 77 billion (EUR 1.99 billion) in 2021, growing at a CAGR of 0.7%. While consumer demand for mass market PCs is expected to be negatively impacted by the growing reliance on smartphones for internet connectivity, overall sales of IT hardware is forecasted to balance out in the enterprise market and in premium retail sales. There is a bright outlook for replacement demand as well as for enterprise hardware sales in Thailand, specifically for data centre equipment.
The key product category supporting Thailand's IT hardware trade surplus is hard disk drives (HDD). However, exports of HDDs are exhibiting a slowdown due to changing technology trends as consumers shift to cloud storage and mobile devices.
IT Software
The software industry in Thailand has shown strong growth over the past years, as increased usage of the Internet and software applications has steadily increased the overall market value
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of the industry. The growth of Enterprise Software markets rose due to high government and business spending in IT. Computer software has already expanded to a 16% share of sales in Thailand’s entire ICT industry. Mobile application revenue rose due to the expansion of mobile phone services and high adoption among mobile users. Even though there has been strong growth in the software industry in Thailand, the industry has faced many challenges that still need to be resolved, such as the pervasive use of pirated software, the country’s large gap in the digital divide, and slow adoption of digitalisation by SMEs.
IT Services
IT services have grown over the period 2012-2016 as a result of companies outsourcing non-core operations and focusing exclusively on their core competencies. IT services are forecast to be the outperforming segment of the IT market during 2016-2020, driven by the growing adoption of consulting and outsourcing, and the adoption of the emerging technologies, such as cloud computing, machine-to-machine (M2M) communications and big data analytics. The three major IT service product categories in Thailand are systems integration, deployment and support, and outsourcing. IT services sales are predicted to hit THB 100.3 billion (EUR 2.60 billion) in 2018 and increase to THB 127.9 billion (EUR 3.36 billion) in 2021, growing at a CAGR of 8.5%. Although cloud services adoption is likely to be behind the strong growth in IT services, basic digitisation services from public and private sectors will also witness sustained growth.
Telecommunications Equipment
Thailand’s dynamic upper middle-income economy has seen strong demand and use of a variety of telecommunication equipment. With the arrival of smartphone and mobile data technology in particular, the telecommunication market has expanded significantly. The country currently has 98 million mobile subscribers and there is a rapid trend in users shifting from feature phones to smartphones. It is estimated that by 2018, almost all handsets in use will be smartphones. Mobile subscriptions have more than doubled over past six years and penetration has stabilised at around 135% in 2017.1 Such high rates of penetration and proliferation of telecommunications
1 https://www.telenor.com/wp-content/uploads/2013/09/04_CMD_2013_dtac_FINAL.pdf
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software has put the market in a state where branding and innovative hardware will most likely be key determinants of market entry and success. Other forms of equipment such as routers, IPTV equipment, and other internet-connected devices are in strong demand for personal and business use in both rural and urban areas. The high penetration of smartphone technology has precipitated a highly competitive market in both component manufacturing for foreign producers as well as local company retailers of national brands.
Telecommunication Services
The total generated revenue for telecommunications services is forecasted to expand from US$ 10.7 billion (EUR 8.70 billion) in 2016 to US$ 14.2 billion (EUR 11.55 billion) in 2022, growing at a CAGR of 2.9%.2 The growth is expected to be driven by the mobile segment, which represents over 70% of the total telecommunication services spending. Due to upgrade of local network infrastructure to 3G and 4G, following the auctions of 900 MHz and 1800 MHz in late 2015 and mid-2016, the ICT sector also received a significant boost. Local mobile operators Advanced Info Service (AIS), DTAC, and True are pushing consumers to adopt smartphones with smartphone penetration in the country expected to grow to 66.7% in 2016. Increased smartphone adoption and improved connectivity are also driving data usage and helping the development of electronic products, services and ICT innovations.
1.1 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
2 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
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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. 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 also reported to have the fastest-growing e-commerce market in South East Asia. A combination of improving infrastructure, increasing number of smartphone users, internet penetration, and the proliferation of online retailers are driving this market trend. According to the Electronic Transactions Development Agency, the country’s online retail business is expected to grow from US$ 1.9 billion (EUR 1.55 billion) in 2016 to US$ 11.1 billion (EUR 9.03 billion) in 2025, with electronics and media being the largest segment, and forecasted to grow even further. 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$ 406.8 billion in 2016, Thailand is the world’s 32nd largest economy and the second largest economy in South East Asia. Its economy expanded by an estimated 4% in 2017, driven by government spending, strong private sector activities and improved exports.
Thailand’s economy is well diversified and competitive. 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 World Bank.
The country has a population of around
Figure 1: Map of Thailand 68 million, with approximately half living in urban Source: CIA Factbook 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 northeast, Pattaya in the southeast, 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 is not widely spoken.
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2.1 Political Overview
Thailand is officially 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. Elected parliament serves as a legislative branch and the country’s judicial bodies remain independent. The Thai constitution serves as the overriding document defining 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. Multiple amendments and changes have been made to the constitution during each change of power. 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 NCPO also established a military dominated national legislature, which later unanimously elected General Prayut Chan-ocha as the new Prime Minister.
Stability in Thailand has been frequently achieved through the Thai people’s deference and respect for the monarchy, in particular, the late King Bhumibol Adulyade, who died in October 2016. Following the ascension of His Majesty King Maha Vajiralongkorn to the throne in December 2016, a new chapter in the history and politics of Thailand has opened, as the new king takes over and a new constitution is implemented. The role of the king is likely be expanded, while the military seems likely to continue to exercise a powerful presence within any new constitutional framework. The National Council for Peace and Order promises stability, a quality that many Thais may continue to wish for as the nation moves into the period of change ahead.
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Prime Minister Prayut Chan-ocha recently announced the country will hold a general election in November 2018, with the exact date to be set in June 2018.
2.2 Economic Overview
The Thai economy was valued at US$ 406.8 billion (EUR 330.9 billion) in 2016, and has a per capita income of US$ 5,732 (EUR 4,443). 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 2017, as GDP growth rose and export receipts increased.
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. 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.
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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 4% in 2017, 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.
2.3 Trade Overview
An export-dependent economy, Thailand exported a total of US$ 215.3 billion (worth EUR 175.1 billion) of goods in 2016. The US was Thailand’s No. 1 export market (11.2%), followed by China (11.1%) and Japan (9.4%). The top ten export items were machinery (17.4%), electronics appliances (13.9%), vehicles and automotive parts (12.7%), gems and jewellery (6.6%), rubber (5.7%), plastic (5.3%), mineral fuels (2.9%), meat and seafood (2.8%), medical device and supplies (2.5%) and cereals (2.1%).
The EU remains an important trade partner for Thailand. In 2016, the total bilateral trade between the EU and Thailand amounted to EUR 33.9 billion, making the EU Thailand’s third-largest trade partner after China and Japan. Thailand is also the third-largest EU’s trading partner in ASEAN. In 2016, exports of goods from Thailand to the EU amounted to EUR 20.3 billion, with key exports being machinery and electronics, transport equipment, miscellaneous manufactured articles, and food products. The EU exports of goods in 2016 were worth EUR 13.6 billion, primarily focused on machinery and transport equipment, chemicals and related products, and manufactured goods.
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EU-Thailand: Trade in Goods (in EUR billions) 25 19,6 20,3 20 18,5 15 12,4 13,4 10 3,6 5 0 2014 2015 2016 -5 -10 -6,1 -6,2 -6,7
EU Imports EU Exports Balance
EU-Thailand: Trade in Services (in EUR billions) 7 5,8 5,7 6 5,3 5 3,7 4 3,5 3,4 3 2 1 0 -1 2013 2014 2015 -2 -2 -2 -3 -2,4 EU Imports EU Exports Balance
Figure 2: EU-Thailand Trade in Goods and Services, 2013-2016 Source: European Commission
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 that it will 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.
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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 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
According to the World Bank’s 2018 “Ease of Doing Business” report, Thailand now ranks 26th 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 - a great achievement.
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In the past year, the country has adopted various reforms to make it easier to do business in Thailand. For example, a requirement to obtain a company seal has been abolished and the need for approval of company work regulations from the Labour Department has been eliminated. This results in a shorter time taken to start a business – from 27.5 days to 4.5 days.
In addition to improving the regulatory framework, the government also supported the development of a comprehensive Doing Business portal to be launched in 2019 to provide 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. To further improve the business environment, Thailand is continuing systematic reforms to concentrate on areas including enforcing contracts, registering property and paying taxes.
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3. Market Overview and EU Entry Opportunities
3.1 Thailand’s Information and Communication Technologies (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, moving quickly from being a secondary player in the world of technology to one of the regional leaders.
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.
Figure 3: Thailand 4.0 Visualisation Source: HKTDC Research
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Thailand’s International Rankings
While Thailand still has room for improvements in terms of its ICT infrastructure, a gradual improvement has been observed over the years. According to the International Telecommunication Union’s ICT Development Index 2017 (IDI), the country edged up one position to 78th place from 79th place in 2016 (out of 176 countries on the index), with the gain attributed to continuous growth of mobile broadband access and usage, and the nationwide rollout of the fourth-generation (4G) network.
Economy Regional Rank 2017 Global Rank 2017 Regional Rank 2016 Global Rank 2016
Singapore 6 18 6 20 Brunei 8 53 8 54 Malaysia 9 63 9 62 Thailand 10 78 10 79 Philippines 15 101 15 100 Vietnam 17 108 17 108 Indonesia 19 111 19 114 Cambodia 24 128 23 128 Myanmar 26 135 28 140 Laos 27 139 29 144
Table 1: ASEAN IDI Rankings, 2017 & 2016 Source: International Telecommunication Union (ICT Development Index 2017)
Thailand’s global performance on other key relevant indices and rankings is further summed up in the table below:3
Type of Index Thailand’s Global Ranking WIPO’s Global Innovation Index (GII) 2017 71st Economist Intelligence Unit’s IT Industry Competitiveness Index 2011 50th Tuft University’s Digital Evolution Index 2017 42nd
3 Sources for indices and rankings: Global Innovation Index 2017 (https://www.globalinnovationindex.org/); Economist Intelligence Unit (2011); Tufts University (2017). Digital Planet 2017: How competitiveness and trust in digital economies vary across the world; WEF (2016). Global Information Technology Report (http://reports.weforum.org/global-information-technology-report-2016/networked-readiness-index/); IMD Business School (2017). World Competitiveness Rankings 2017; UN Department of Economic and Social Affairs (2016). UN E-Government Survey 2016.
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Type of Index Thailand’s Global Ranking
World Economic Forum’s Network Readiness Index 2016 62nd IMD Business School World Competitiveness Scoreboard 2017 27th United Nations E-Government Development Index 2016 77th United Nations E-Participation Index 2016 67th Waseda University’s Digital Government Ranking 2017 21st
Table 2: Thailand’s Rankings on Global ICT Indices
According to the World Economic Forum’s Network Readiness Index 2016, Thailand also has more than an average score in
social impacts, business and innovation environment, infrastructure, affordability, as well as individual and business usage,
when compared to the upper-middle- income group’s average. The country is ranked 3rd in South East Asia, after
Singapore and Malaysia.
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 has underperformed on skills and regulatory environment. Figure 4: Thailand’s Network Readiness Ranking Source: World Economic Forum & Thailand Board of Investments
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Usage of ICT in households & businesses
Household ICT usage
According to the latest available data from the Thai National Statistical Office, there were approximately 20.2 million computer users (32.2% of the total population) in 2016, in addition to 29.8 million internet users (47.5%) and 51.1 million mobile phone users (81.4%).
The proportion of computer users has been gradually decreasing since 2012, while mobile phone owners has increased from around 70% in 2012 to 81.4% in 2016. In addition, the number of Thai internet users and smartphone owners has seen dramatic upward shifts in recent years. Internet users have increased from 26.5% in 2012 to 47.5% in 2016, while smartphone owners jumped from 8% (5 million) to nearly 51% over the same period of time.
100%
80% 81,4%
60% 50,5% 47,5% 40% 32,2% 20%
0% 2012 2013 2014 2015 2016 Internet 26,5% 28,9% 34,9% 39,3% 47,5% Computer 33,7% 35,0% 38,2% 34,9% 32,2% Mobile Phone 70,2% 73,3% 77,2% 79,3% 81,4% Smart Phone 8,0% 14,8% 26,4% 37,9% 50,5%
Figure 5: Household ICT users, 2012-2016 Source: National Statistical Office of Thailand Note: Mobile phone includes feature phone and smart phone
Geographically, Bangkok has the highest number of computer users (50.5%), as well as smartphone (70.3%), mobile phone (91.3%), and internet (69.2%) penetration rates. The North Eastern region has consistently underperformed across mobile, smartphone, internet and computer penetration scores.
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91% 86% 81% 79% 76% 77% 69% 70% 53% 56% 48% 51% 51% 49% 41% 45% 46% 36% 39% 32% 32% 30% 27% 30%
Whole Kingdom Bangkok Central North Northeast South
Computer Internet Mobile Smartphone
Figure 6: Household ICT users by region, 2012-2016 Source: National Statistical Office of Thailand Note: Mobile phone includes feature phone and smart phone
Location-wise, the majority of Thais use internet at any place via mobile phone/laptop (85.4%), followed by home (66.1%), work (33.1%), and place of education (27.6%). Most people accessed the internet in 2016 via smartphone (90.4%), followed by PC (50.1%), Notebook (24.9%) and Tablet (15.2%).
Business ICT usage
In 2015, there were approximately 22 million business establishments in Thailand, majority of which were SMEs. Given the limited resources of smaller companies, the use of computers and the internet remains low, increasing only marginally between 2011-2015.
% of businesses using computer & internet
30% 23,5% 24,8% 24,8% 24,9% 24,9%
20% 19,2% 19,2% 20,5% 20,6% 10% 16,6% 2011 2012 2013 2014 2015
Computer Internet
Figure 7: Percentage of businesses using computers & the internet Source: National Statistical Office of Thailand
In 2015, businesses owned approximately 2.1 million computers with around 2 million staff, who used them for their normal work duties.
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Size of Establishment Computers per No. of Computers (No. of persons) Establishment 1-9 1,016,749 2.1 10-15 112,051 3.8 16-25 85,456 5.5 26-30 27,820 8.0 31-50 97,383 10.9 51-200 305,835 24.6 More than 200 486,856 136.4 Total 2,132,150 3.9 Table 3: Computer ownership by business size, 2015 Source: National Statistical Office of Thailand
In general, only 20.6% of total businesses establishments in Thailand use internet in their normal work routines. The use of computers and the internet in Thailand depends heavily on the size of the establishment, with larger businesses utilizing ICT more frequently. The highest proportion of internet and computer usage has been observed in private hospital activities, while the lowest use has been 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
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The top three reasons for internet access among businesses are:
Getting information about goods and 80% services Getting information from government 74% organisations Sending or receiving e-mail 33%
Figure 9: Top 3 reasons for using internet among Thai businesses Source: National Statistical Office of Thailand
Thailand’s ICT Workforce
In terms of ICT workforce, one of the key challenges for Thailand is the shortage of industry-ready skilled workers with the relevant science, engineering and technical skills.
A 2015 World Bank study also reported that Thailand had 1,000 highly qualified people working in research and development per million of population, compared to 8,000 in the leading countries in innovation and IT.4 In total, according to the Statistical Office of Thailand, there were approximately 452,000 ICT personnel in the country in 2015.5
Although Thailand graduates over 115,000 students in ICT-related subjects each year, many are considered to be lacking robust IT skills.6
ICT Graduates 2016 (% by category)
33% 23% 27% 8% 8% 1%
Software & Electronics Multimedia & Animation IT Business-related Computer Others
Figure 10: IT graduates in Thailand (% by category), 2016 Source: Office of Higher Education Commission of Thailand (2017) & Board of Investments of Thailand
4 World Bank (2015). Thailand – wanted: A quality education for all. http://tinyurl.com/yafa9qdc 5 National Statistical Office of Thailand (2016). The 2015 Establishment Survey on the Use of Information and Communication Technology. 6 Office of the Higher Education Commission of Thailand (2017) & Board of Investments of Thailand (July 2017). Investment Opportunities in Thailand.
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Officials from the Association of Thai ICT Industry (ATCI) estimate 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.7 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.8
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 set 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. In order to provide more qualified professionals, the government has announced its plans to budget US$ 1 billion for 12,290 PhD researchers to serve the country’s industrial and human development needs over the next 20 years. In addition, the Thai government has singled out human capital development as a key focus in its National Economic and Social Development Plan 2017-2020 (NESDP), and implemented such initiatives as the STEM Masterplan 2015.9
7 https://www.sciencedirect.com/science/article/pii/S2452315117301005 8 Tan, K. S. & Tang. J. T. H. (2016). New Skills at work : Managing skills challenges in ASEAN-5. 9 https://www.sciencedirect.com/science/article/pii/S2452315117301005#bib41
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Current Status of the Thai ICT Sector
The Thai ICT market is dominated by hardware spending, followed by services and software. IT services dominate the spending in public sector, while hardware does so in the private sector. Although the growth in Thailand’s ICT market dipped slightly between 2013-2015, as a result of the depreciation of the Baht and political unrest, the sector has resumed its growth trajectory and is expected to benefit from a more supportive environment over the next few years. According to IDC, as Thailand shifts toward a fully-scaled digital economy, the country’s IT spending is expected to be close to THB 440 billion (EUR 11.39 billion) in 2018, with continuous growth to reach THB 470 billion (EUR 12.16 billion) by 2021.
According to the Digital Economy Promotion Agency (DEPA), there are currently around 500,000 digital entrepreneurs in the industry, including 50,000 new hardware manufacturers, 80,000 foreign investors, and 350,000 investors applying technology to their businesses.
Consumer spending, which accounted for over 53% of total IT spending in 2015, is being driven by purchases of mobile devices, PCs, and printers. The vast majority of consumer spending resides on mobile devices, mainly smartphones, while enterprise hardware spending is largely focused on servers, enterprise network, and telecommunication equipment. When it comes to consumer hardware, Thailand exhibits a continuous decline in PC and tablet sales, which indicates shifts in user habits, with more consumers forgoing personal computers to directly purchase mobile devices.
Telco spending in Thailand is expected to grow at a CAGR of 6.9% achieving US$ 12.3 billion (EUR 10.0 billion) by 2019, from the estimated US$ 10.7 billion (EUR 8.7 billion) in 2016. The spending has been driven mainly by mobile spending, with wireless data and wireless voice constituting 35.4% and 36.4% in 2016, respectively. Due to upgrades of local network infrastructure to 3G and 4G, following the auctions of 900 MHz and 1800 MHz in late 2015 and mid-2016, the ICT sector also received a significant boost. Local mobile operators, namely Advanced Info Service (AIS), DTAC, and True, are pushing consumers to adopt smartphones, with smartphone penetration in the country estimated at 73% in 2017.
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The demand for internet and internet-related services is growing exponentially in Thailand. The widespread proliferation of the Internet has opened up new sources of revenue for industries such as digital entertainment and gaming. In addition, the Internet-ready population of Thailand is increasingly using and engaging with social media, mobile games, emails, and online shopping, resulting in high demand for IT and IT services. In addition to an e-commerce boom, there is a growing demand for more local app development, the creation of domestic social networking platforms and payment systems.10
Increasingly, Thai enterprises are becoming digitally capable, especially by transforming the ways they operate, develop products and services, and engage with customers to stay ahead in a competitive digital economy. Enterprises are also turning towards mobility and security as well as solutions to focus on productivity and efficiency gains. Cloud and virtualisation technologies are making it possible for Thai employees to work remotely, and this is stimulating demand for new technologies. Cloud services are expected to report strong growth, as well as e-commerce along with increasing levels of internet usage by Thai enterprises. The three major IT service product categories in demand in the country are systems integration, deployment and support, and outsourcing.
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.
In addition, there is still a significant growth in fixed data following the growing adoption of FTTX in Bangkok and major provinces. This is in line with a policy laid out by the government to get hard infrastructure, such as a broadband network, ready for the digital economy.
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
10 Oxford Business Group (2016). http://www.oxfordbusinessgroup.com/country/thailand/ict
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equipment and services. A convergence of factors, including the rollout of 4G nationwide, government support and better user understanding of the offerings, is resulting in improved IT and telecoms infrastructure and increased demand. Various sectors are expected to increase their ICT spending in the near future - government; retail & wholesale; healthcare; banking, financial services and insurance, among others.
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.
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.11
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
11 MICT (2011).http://www.mict.go.th/assets/portals/10/files/e-Publication/Executive%20Summary%20ICT2020.pdf
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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 for Economy and Society (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.12 The Plan incorporates six key strategic areas: development of hard infrastructure, acceleration of digital economy, promotion of digital society, improvement of digital government, workforce development, and soft infrastructure growth.
12 http://www.datacenterdynamics.com/content-tracks/colo-cloud/positioning-thailand-as-a-data-center-hub/97769.fullarticle
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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 Infrastructure Centres all over the 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- Society education 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. 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. 3. Creating at least 79 smart services (to become paperless) Government 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 4: Targets for Thailand Digital Economy and Society Development Plan 2016-2020 Source: Thailand Digital Economy and Society Development Plan (2016-2020)
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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 lifestyle via government infrastructure improvements and data integration. The Plan has four strategies in developing a Digital Government:
Figure 11: Four strategies in developing a digital government Source: Digital Government Plan 2017-2020
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Additional initiatives
Additional initiatives have further given encouragement for the growth of the ICT sector.
For example, the former Ministry of Information Communication (now the Ministry of Digital Economy and Society) launched 24 projects as part of the Digital Thailand programme. The total value of these projects is THB 3.76 billion (EUR 97.3 million) and the list includes the upgrading of 2,280 community learning centres, the building of 10,000 public digital access spots throughout the country, assisting smaller companies with e-commerce, and the use of ICT to improve public services and the development of Phuket as a smart city. Other efforts included a CAT Telecom Pcl innovation park, the electronic trading of rice and sugar and a Thai Post logistics site.
The newly established Ministry of Digital Economy and Society (MDES) is also rolling out the biggest government IT project, costing THB 13 billion (EUR 336.5 million), to lay fibre optic cables to every village in the country.13
▪ 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. As of January 2017, national broadband access was already available to 40,000 villages (80% of the Thai population), and is expected to reach all 70,000 villages (95% of the population) by 2035.
Country Q1 2016 Avg. Mbps % Above 4 Mbps Internet Penetration Singapore 16.5 91% 82% Thailand 10.8 96% 67% Malaysia 6.4 68% 71% Vietnam 5.0 55% 53% Indonesia 4.5 46% 51% Table 5: Internet speed and penetration rate among the leading ASEAN countries, 2016 Source: CAT Telecom Public Company Limited
13 http://www.datacenterdynamics.com/content-tracks/colo-cloud/positioning-thailand-as-a-data-center-hub/97769.fullarticle
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In March 2017, the 1,300 km Malaysia-Cambodia-Thailand (MCT) subsea cable system has been launched, with an initial capacity of 1.5 Tbps, marking a new period of improved and secured internet connection.14
In August 2017, the MDES announced the establishment of two companies to provide additional broadband internet services to state agencies and the general public. The National Broadband Network Company and the Neutral Gateway and Data Centre Company will provide and manage cable internet access and related equipment. The two companies were established to meet the rising public and private sector demand for reliable internet connectivity.15
Aside from being popular tourist destinations, Phuket, Chang Mai and Khon Kaen were piloted as the “Smart Cities”, home to digital industries and international research and innovation centres. To fully drive the project, CAT Telecom Plc worked together with the government agencies to implement high-speed internet infrastructure in these cities. In addition, 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. In 2016, over 73 digital projects were launched in smart cities with a total investment of US$ 23.3 million.
Another project, called Digital Park Thailand, is expected to drive ICT growth in Thailand. It is the flagship project of the Eastern Economic Corridor 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.
14 http://drrgateway.net/information-communications-technology/malaysia-cambodia-thailand-submarine-cable-launches 15 https://oxfordbusinessgroup.com/news/thailand-sets-new-telecommunications-infrastructure-boost-service-delivery-capacity
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Key Emerging Trends in the Thai ICT Market
The market for ICT in Thailand is growing with multiple opportunities for European companies. In addition to more traditional ICT products and services, the following trends are emerging and are likely to gain traction with Thai customers:
Internet of Things (IoT)
The relatively uncontested IoT market is one of the new, emerging trends in Thailand. According to Frost & Sullivan, the Thai IoT market is expected to rise by more than 1,600%, increasing from US$ 57.7 million (EUR 46.9 million) in 2014 to US$ 973.3 million (EUR 791.8 million) in 2020.16 There are multiple factors, which are fuelling the IoT technology adaptation in Thailand. Among the key drivers are the arrival of 4G 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 development of smart cities.
The growth trends are also confirmed by IDC, which predicts 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.17
Figure 12: IoT in Thailand: Top 5 Industries for IoT market Source: IDC
16 https://www.pressreader.com/thailand/thai-american-business-t-ab-magazine/20160318/282626031804220 17 https://www.bangkokpost.com/tech/local-news/1160757/iot-gaining-in-popularity-among-thais
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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.18 Given the fact that the government plans to position itself as the centre of the ASEAN Economic Community, the prominence of manufacturing is forecasted to expand significantly. With the large size of the manufacturing industry in Thailand, possibilities for IoT adaptation are vast.
Although the manufacturing industry is in a leading position for IoT market potential, the greatest growth rates over the next 2-3 years are expected in freight and logistics monitoring (20%) and remote health monitoring (20%) industries, followed by smart homes (13%), manufacturing (10%) and production asset management (8%).
Preferences in the private consumption segment also indicate significant IoT potential. 84% of Thai consumers have identified that they would want to connect different devices or things to the internet, compared to the global average of 81%. Over 60% would also want to monitor their home to ensure safety and security (compared to 40%, globally), and 45%, on average, would like to have their cars connected.19
TV, car, camera and home alarm remain the top preferred IoT devices for Thai customers:
Figure 13:Thai IoT Market: Preferred devices to be connected to internet Source: Ericsson. Digital Thailand: How increasing ICT adoption helps Thailand to become a Digital Nation
18 The Thai automotive manufacturing and assembly ecosystem includes BWM, Ford, Honda, Mazda, Mitsubishi, Nissan and Toyota brands, among others. 19 Ericsson (). Digital Thailand: How increasing ICT adoption helps Thailand to become a Digital Nation
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Some of the recent developments also point to the increasing attention to the IoT market in Thailand:
The Department of Land Transport (DLT) released a new law in January 2017, which requires all public buses, trailers and trucks with over 10 wheels to install GPS navigation systems that provide real-time information to DLT service centres on the vehicle coordinates, travel speed and driving time. This is likely to see increasing investments in IoT within the manufacturing and logistics sectors.20
Local mobile operators have already started offering IoT-related services to their network users, including smart home solutions that combine CCTV with fixed broadband and smart- connected vehicle systems.
The telecom regulator has approved in November 2017 the final draft of utilisation of the 920-925 MHz band for IoT services. The move has created a spectrum standard for machine-to-machine connectivity and it is likely to spur the application of new technologies and the increasing utilisation of IoT devices across all sectors.
In August 2017, two Thai government agencies, the State Railway of Thailand (SRT) and the Thailand Post, have also announced their plans to explore IoT and Blockchain technologies in order to improve their logistics. The Thai railway system will invest THB 1 billion (EUR 25.88 million) over the next three years in order to upgrade its ICT network, including the attachment of IoT sensors to trains to better monitor, analyse and communicate train activity. Meanwhile, Thailand Post has announced that Blockchain would be used to track the delivery of high-value parcels by early 2018.21
In early August 2017, the government has also announced its plans to set up an IoT Institute, which would develop further the IoT technology and its applications for the benefit of the Thai economy.
Meanwhile, the National Electronics and Computer Technology Centre reported that it will be launching Net Pie, a network platform to provide support for IoT developers.
20 http://iotbusiness-platform.com/blog/iot-thailand-market-reach-us973-7mil-2020/ 21 https://internetofbusiness.com/post-railways-thailand-set-benefit-iot-blockchain/
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Finally, another indicator for the rising demand and prominence of IoT in Thailand is that its largest private company, Charoen Pokphand Group (CP) has recently created an IoT subsidiary to help with applications in the field of farming, agriculture and logistics.22
IT Security
Internet security software firm BitDefender in 2016 estimated the Thai ICT security market to be valued US$ 20 million (EUR 16.3 milion), and the company expects the market to grow exponentially in the next few years. Thailand currently ranks 5th in Asia and 11th globally in terms of its vulnerability to cyber security risks,23 with Symantec’s Internet Security Report 2017 ranking Thailand 10th globally for the number of data breaches in 2016.24 In 2015, the country was also one of the world’s top targets for cyber-attacks through ransomware, reporting nearly 5,100 malware attacks (an average of 14 attacks per day).25 In the same year, around 87% of companies in Thailand have experienced data or monetary loss due to cyber-attacks.
Among other factors, the increased adoption of smartphones and usage of internet has attracted more hackers to launch attacks against Thai technology users. The financial sector remains one of the most vulnerable sectors. According to Trend Micro Inc., a Tokyo-based security software company, Thailand was identified to be one of the top targets for attack by point-of-sale (POS) and online banking malware infections. This vulnerability in Thailand’s financial information security systems has led many Thais to distrust online banking and opt instead for payment gateways, such as iPay88, a leading payment gateway company from Malaysia, with strong security credentials.
A number of high-profile cyber breaches have also recently raised the urgency for the government and businesses to search for preventive and counter solutions. Netcraft announced in May 2014 that almost 100 Thai government websites were hacked and used to serve malware, with more than 500 distinct attacks launched from the infected websites (representing about 85% of global government-hosted malware). In 2015 cyber activists successfully took down the official websites
22 http://iotbusiness-platform.com/blog/iot-thailand-market-reach-us973-7mil-2020/ 23 https://www.ifsec.events/sea/visit/news-and-updates/thailand-5th-cyber-security-threats-asia & https://disruptive.asia/cyber-security-thailand-4-0/ 24 Symantec (April 2017). Internet Security Threat Report 2017 25 Bangkok Post (November 2016). Thailand a ripe target for cyberattacks
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of the Ministry of Defence, the Democrat Party and the Internal Security Operations Command for several hours via coordinated DDoS attacks. In January 2016, hacktivist group Anonymous also infiltrated and took down 14 Thai Police websites in protest over a murder case ruling.
In an effort to deter cyber-crime, Thai authorities have taken active steps to strengthen cyber security. In 2012, the National Cybersecurity Committee was established to oversee the state’s computer security. In addition, the Computer Emergency Response Team was created to monitor and respond to incidents.
On a wider strategic level, Thailand has also bolstered the nation’s cyber-crime legislative framework. In early 2015, the government passed the Cyber Security Bill, which grants the Thai authorities a greater degree of rights and powers to supervise and respond to active as well as potential cyber threats. In October 2015, it also announced the “Single Gateway” plan, which sought to close down all but one internet gateway so as to facilitate online supervision and improve the interception of materials deemed inappropriate. The plan was eventually abandoned after facing fierce resistance from Thais, who deemed it too be disastrous for reliability (creating a single point of failure) as well as for allowing increased online policing and censorship by the military government. Further steps were taken in 2017, when the government passed the Cybercrime Act, a new e-commerce bill, Cyber Security Protection Bill and a Data Protection Bill in order to strengthen Thailand’s cyber security capabilities.
These efforts have recently shown signs of success with the International Telecommunication Union’s Global Cybersecurity Index 2017 ranking Thailand 20th globally. The country was grouped in the “maturing” stage, which refers to 77 countries that have developed complex commitments and engagement in cyber security programmes and initiatives.
As the government continues to strengthen the cyber security environment and more Thai companies adopt cloud-computing technology, the opportunity within the market is expected to grow. IDC forecasts that three-quarters of the larger Thai firms will secure customised cyber threat analysis services by the end of 2017, while 80% of proprietary data stored in a cloud is expected
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to be encrypted by 2018. Among the potential growth sectors, cloud security is expected to record the strongest growth rate of 50%, followed by mobile security (18%).
Some of the most recent developments in the IT security industry are:
In January 2018, the NTT Security, an IT security arm of NTT Group, announced expansion plans into Thailand as part of its growth strategy. The company will be taking its suite of integrated security services via the NTT Group companies, the Dimension Data, NTT Communications and NTT DATA. The company has reported that Thailand’s initiatives to strengthen the ICT industry have opened up spaces for cyber security services.26
In mid-2017, the Electronic Transactions Development Agency announced its cooperation with the Thailand Information Security Association to train new IT security experts and develop personnel with information security expert certification. Latest statistics showed that industry severely lacks IT security experts with less than 200 cyber security professionals at the level of Certified Information Systems Security Professional (CISSP) and fewer than 1,000 Thais working in cyber security field. The programme aims to produce 500 CISSP by the end of 2017, and 1,000 by 2022.27
In June 2017, the government announced its plans to spend approximately US$ 3.8 million (EUR 3.1 million) on securing a software to track online networks and monitoring online activity. The Ministry of Digital Economy and Society expects to post a tender in early 2018 and then consider possible offers.28
In October 2016, Thailand and Bangladesh also signed a cooperation deal on cyber security, e-governance and development of information technology industry, which is likely to strengthen the country’s capabilities of dealing with IT security.29
In early 2016, BitDefender, which currently holds around 10% of the Thai ICT security market, announced its plans to partner with mobile phone hardware companies, such as
26 https://globenewswire.com/news-release/2018/01/15/1289051/0/en/NTT-Security-Announces-Expansion-of-Advanced-Security-Services-into- Thailand.html 27 http://investvine.com/thailand-needs-800-cyber-security-specialists/ 28 https://www.reuters.com/article/us-thailand-cyber/thailand-plans-cyber-network-scrutiny-law-to-toughen-online-monitoring-idUSKBN19A12P 29 https://bdnews24.com/bangladesh/2016/10/07/bangladesh-thailand-sign-deal-on-cyber-security-ict-cooperation
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Oppo, to offer bundled packages to Thai customers as part of their strategy to increase market share. The company is also exploring the option to bundle their security services with internet service in Thai market.
Fintech
Although Thailand currently ranks 7th out of 10 Asian countries in a Fintech Competitiveness Index 2017,30 the country’s small fintech sector is expected to expand on the back of the digitalisation agenda within commercial banks, start-ups, telecom providers and retailers, as well as solid foundations prepared by the Thailand 4.0 policy.31
According to Ceresus, a data-driven customer experience research firm, the country still has a lot of room for improvements, but it already outperforms Malaysia, and only lags behind Singapore in terms of regulatory environment. As a result, it has the potential to leapfrog its early-stage digital banking services and move into integrated digital commerce, or value-added fintech services.
According to Statista, the total transaction value within the fintech market amounted to US$ 14.7 billion (EUR 11.96 billion) in 2017. The transaction value is expected to grow annually by 15.9%, resulting in the total market value of US$ 26.6 billion in 2022. The market’s largest segment is the Digital Payments sector with a total transaction value of US$ 13.9 billion (EUR 11.3 billion) by the end of 2017.32
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 services (business-to-business digitised workflow management). However, the market has many new areas for expansion.
30 https://www.bangkokpost.com/tech/local-news/1373711/thailand-lags-in-fintech-development-in-asia 31 https://www.business-sweden.se/en/Trade/international-markets/asia-pacific/Thailand/business-opportunities/smart-cities-and-digital-economy/ 32 https://www.statista.com/outlook/295/126/fintech/thailand#
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Figure 14: Thailand’s fintech ecosystem Source: Thailand’s Board of Investment
According to IDC Research, the top 10 fastest growing fintech companies in Thailand in 2017 were AirPay, Claim ID, FINNOMENA, FlowAccount.com, Masii, Omise, PeakEngine, Piggipo, StockRadars, TrueMoney.33
Thailand’s fintech sector is expected to be boosted further by the development of cashless society and the establishment of e-payments infrastructure. Since August 2016, the government has been active in promoting the relevant technology by introducing PromptPay for peer-to-peer transfers. Also in 2016, Alibaba signed an agreement with the Thai government to assist it in developing its e-payments systems and support the state with other tasks for growing infrastructure for cashless society. The Ministry of Finance has also introduced its plans to install over 400,000 Electronic Data Capture (EDC) and mobile point-of-sale (mPOS) devices across the country by the end of 2017, increasing the total number to 800,000 EDC and mPOS devices nationwide.
33 http://fintechnews.sg/12037/thailand/10-fast-growing-fintechs-thailand/
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The country has also opened its fintech regulatory sandbox to enable developers, which work on lending, payments and money-transfer services and products, to experiment for up to a year. From a regulatory point of view, the government is expected to introduce the Fintech Act 2018, which, if passed, would make Thailand the third country in ASEAN to have such specialised regulations. The new law would aid both entrepreneurs and consumers as it would make it easier to launch fintech startups. Locally-registered VC funds would be also entitled to tax exemptions on capital gains for up to 10 years. Start-ups would benefit from income tax exemption for up to five years and the capital gain tax exemption when selling a profitable business.34
Some of the additional developments that are likely to further stimulate the fintech sector are:
In 2017, local banks have embraced a range of digital payment schemes, ranging from PromptPay, an online money transfer system under the national e-payment initiative, to Quick Response (QR) code payment, which is expected to gain footing in 2018.35
In September 2017, following on from Alibaba’s US$ 1 billion (EUR 813.5 million) deal with Lazada and a US$ 1.1 billion (EUR 894.8 million) round in Tokopedia led by Alibaba, rival Chinese e-commerce firm JD.com has announced a US$ 500 million (EUR 406.7 million) investment to create e-commerce and fintech businesses in Thailand.36
In July 2017, the Bank of Thailand and the Monetary Authority of Singapore have signed a fintech cooperation agreement, which aims to help develop a richer financial ecosystem in Thailand and Singapore. The two countries will share information on emerging market trends and their impact on regulations, as well as refer fintech companies to their counterparts.37
In June 2017, Thailand-based Kasikorn Bank launched its US$ 30 million (EUR 24.4 million) tech fund, called Beacon. The fund is aimed at giving the firm first-mover advantage on global tech through startups based in Thailand and overseas. Going forward, it will be
34 http://www.nationmultimedia.com/detail/opinion/30327970 35 http://www.scmp.com/news/asia/southeast-asia/article/2123836/effects-digitalisation-thailand 36 https://techcrunch.com/2017/09/18/chinas-jd-com-announces-500m-e-commerce-and-fintech-joint-ventures-in-thailand/ 37 http://www.bankingtech.com/2017/07/thailand-ties-the-fintech-knot-with-singapore/
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targeting three to five deals per year, ranging from seed-plus to Series A stage, with a target across all aspects of fintech.38
In May 2017, Thailand’s fifth largest financial group Krungsri has launched a US$ 30 million (EUR 24.4 million) venture capital fund to invest in financial tech start-ups in 2017-2019.39
Data Centres (DC)
In 2016, the data centre market in Asia Pacific was valued at US$ 12 billion (EUR 9.76 billion) and was expected to expand by 27% per year. With significant regional growth opportunities, investors are starting to pay attention to Thailand as a potentially lucrative space for the DC market. The demand for data centre services is projected to expand significantly, driven by Thailand’s digital transformation plans, increasing cloud adoption by Thai enterprises, favourable government policies, growing internet penetration, and the country’s potential as an access hub to the Greater Mekong Sub-region (GMS).40
Although hosting one’s own in-house data centres remains customary, companies are starting to realise the benefits of secure data centre spaces and outsourced DC systems. Around 40% of Thai enterprises have suffered unplanned systems downtime in 2014, mainly caused by hardware, software and power failures. Of this figure, some 46% have also experienced losses in revenue, according to EMC Global Data Protection Index 2014, thus spurring the investments in DC solutions. The growing interest in disaster recovery solutions is also accelerating the adoption of outsourced DC services.
Thailand is also drawing attention as a base for reaching the Greater Mekong Sub-region (GMS).41 The appeal of the GMS lies in its substantial industrial base, population, and the increasing number of multinational corporations operating there. Although the two leading DC market players in the wider ASEAN region are Singapore and Hong Kong, both are increasingly
38 https://techcrunch.com/2017/06/07/kasikorn-bank-fintech-fund-beacon-thailand/ 39 https://www.dealstreetasia.com/stories/thailand-krungsri-launches-30m-vc-fund-invest-fintech-firms-71577/ 40 http://www.datacenterdynamics.com/content-tracks/design-build/thailand-prepares-for-fast-growth/97695.fullarticle 41 Greater Mekong Sub-region (GMS) consists of Cambodia, Laos, Myanmar, Thailand, Vietnam and small part of China.
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facing future land shortage, thus, fuelling interest in Thailand as a key emerging market to serve the GMS.42
In March 2015, the government announced that as part of its strategy to encourage the setting up of at least 40 data centres in Thailand, it would be extending tax incentives to local and foreign firms to invest in, and build data centres. It is estimated that the total value of investment for the establishment of data centres is THB 30 billion (EUR 776.5 million). At the beginning of 2017, Thailand had 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.43 Compared to the ASEAN leaders, Singapore and Malaysia, the country has a lot of room for expansion.
Figure 15: Market share by m2 of data centre space Source: BroadGroup Most data centres in Thailand are Tier III, with 99.98% uptime and N+1 fault tolerance. The country has approximately 11,000 racks available nationwide, with more than 30% storage capacity left to serve the market.
42 http://www.jll.co.th/thailand/en-gb/news/594/data-centres-create-new-real-estate-opportunities-in-thailand 43 http://www.datacenterdynamics.com/content-tracks/design-build/thailand-prepares-for-fast-growth/97695.fullarticle
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Key players in Thailand providing DC services include CS Loxinfo, TCC Technologies, Switch, NTT, True Corporation and KIRZ.44 Retail colocation and cloud DC operators in Thailand are yielding ROIC on par with regional peers, such as Malaysia and Singapore, with one of the largest DC providers CS Loxinfo yielding ROIC of around 8-9%.
As part of its Digital Economy Initiative, the government has also issued a strong policy in promoting the data centre business. Several local and international players have recently taken advantage of the lenient investment policies by the government, such as tax privileges and preferential electricity rates, and have established data centres in Thailand. For example, the US-based DC operator Switch recently opened the largest DC in Thailand, a Tier-IV DC with a capacity of around 60 MW.
As Thailand garners the attention of global DC 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.
Cloud Computing
The cloud computing market is developing rapidly in Thailand with international vendors as well as local firms and telecom operators seeking to get a foothold. BMI predicts Thailand’s total cloud spending to reach THB 13.8 billion (EUR 357.2 million) by 2019. Adoption rates are poised to rise rapidly, with IaaS (Infrastructure-as-a-Service) identified as the fastest growing segment, followed by SaaS (Software-as-a-Service) and PaaS (Platform-as-a-Service). According to Thailand’s Electronic Government Agency, the public authorities, telecoms, healthcare and retail are among the early adopters of cloud.
Presently, Microsoft’s Azure platform has the largest market share, followed by True IDC, and Amazon Web Services and G-Cloud at joint third place. They are joined by local players, such as INET and DataPro as well as foreign players, including Fujitsu and NTI.
44 DBS Asian Insights (November 2017). Data Centre & Cloud: Divestments and M&As to Accelerate in 2018
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Some of the recent developments in Thailand’s cloud computing market are:
In early 2017, the Bank of Thailand issued a notice allowing the use of technology by financial institutions in the outsourcing of their services. The country has become one of the few jurisdictions in the region that permits such use.
In August 2015, the US-based cloud accounting software provider Acumatica launched an enterprise resource planning (ERP) cloud system in Thailand. The company is providing a full Thai-language version of its technology in the market.
In February 2015, HP and CS Loxinfo have also announced their strategic partnership, which will allow CS Loxinfo to distribute enterprise software throughout Thailand over HP’s Helion OpenStack cloud-based platform.
The rise of cloud computing has further led to the development of more cloud infrastructure:
▪ INET announced in October 2015 that it would build its third data centre, scheduled for completion in 2016.
▪ In January 2016, SUPERNAP International began construction of the US$ 300 million (EUR 244 million) SUPERNAP Thailand Data Centre in Thailand’s eastern province of Chonburi, which will have the capacity of more than 6,000 data server racks.
▪ TCC Technology, which currently operates 3 data centres, has also announced its plans to invest in a new data centre, while Digital Post Asia of Japan has reported its investment for yet another facility.
Big Data Analytics
The sector has not seen impressive spending growth in Thailand in the past years, mainly due to the complexity of the big data integration process. However, the purchases of big data hardware, software and service solutions are expected to increase in the next 5 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
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growing enterprise competition.45 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.46
The telecom, healthcare, retail and banking sectors as well as state agencies remain the key target customers.
Recently, the market segment has seen some new developments that point to the growth of big data analytics in Thailand:
In July 2016, the former Ministry of ICT (now known as the Ministry of Digital Economy and Society), together with the Electronic Government Agency, National Electronics and Computer Technology Centre, and the Department of Highways signed a Memorandum of Understanding (MoU) to introduce a model for big data.47 The project involved modelling, analysing and sharing real-time traffic information from across the nation.
In March 2016, Hitachi introduced its Hitachi Hyper Scale-out Platform, a big data analysis solution, which is designed to help businesses reduce the time for business-oriented implementation plans.
In October 2017, the government announced its plans to set up a Big Data Analytics centre, which will be led by the National Statistical Office of Thailand.48 The centre will be responsible for developing a government database and enabling public-sector agencies to harness data for better decision-making.
E-Health
Although relatively small, the e-health segment is also expected to grow steadily. In 2015, the market segment was estimated at US$ 37 million (EUR 30.1 million), and is expected to reach US$ 73 million (EUR 59.4 million) by 2020, growing at a CAGR of 18.1%. Although Thailand’s healthcare infrastructure still has its shortcomings, especially in rural areas, the country has highly
45 https://www.bangkokpost.com/tech/local-news/893684/4g-drives-big-data-demand 46 https://www.bangkokpost.com/tech/local-news/1226624/data-science-poised-to-boom 47 https://www.opengovasia.com/articles/7098-thailand-governments-big-data-initiatives 48 https://www.opengovasia.com/articles/7884-thailand-government-announces-plan-to-set-up-iot-institute-and-big-data-analytics-centre
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technical and advanced hospitals in urban centres. Compared to countries such as the U.S. or Australia, treatment in Thailand also comes at a more reasonable price. For this reason, the country is gradually becoming one of the main destinations for medical tourism in Asia. As hospitals have to compete for clientele globally, they tend to be very active in the search for new services and devices to increase their competitiveness and efficiency. In addition, the Thai healthcare system has to tackle the problem of ageing population, with the median age rising from 19 to 38 within the last 50 years. In order to deal with the subsequent consequences, the Thai government, hospitals and consumers are increasingly looking for solutions that cater to growing need for efficiency, effectiveness, remote health provision and monitoring.49 As a result, there is a significant potential for ICT solution providers in the Thai healthcare market.
Potential growth segments include connected medical devices for use at home, Pay-to-use apps and desktop versions, telemedical services and remote patient monitoring solutions.
E-Commerce
Thailand is also reported to have the fastest-growing e-commerce market in South East Asia. A combination of improving infrastructure, increasing number of smartphone users, internet penetration, and the proliferation of online retailers are driving this market trend. Although the sector is still somewhat underdeveloped, Thailand’s e-commerce market is expected to increase 16-fold over the period of 2015-2020, according to the Electronic Transactions Development Agency (ETDA). The country’s online retail business is expected to grow from EUR 1.55 billion in 2016 to EUR 9 billion in 2025.50
Mobile e-commerce remains the main channel to reach customers as 41% of total online purchases occur via smartphones. According to PwC, Thailand is also the largest online Customer-to-Customer (C2C) market in the world with an estimated 50% of online shoppers purchasing goods on social networks. Yet, cash on delivery still accounts for 70% of all payments.
49 http://iotbusiness-platform.com/blog/iot-thailand-market-reach-us973-7mil-2020/ 50 http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/ASEAN-in-Focus-The-Thai-Consumer- Market/rp/en/1/1X000000/1X0A8YMK.htm & http://www.scmp.com/news/asia/southeast-asia/article/2123836/effects-digitalisation-thailand
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Given Thailand’s large user base, Facebook has recently decided to run its first trial for social commerce payments in the country,51 thus making Thailand among 24 countries with Facebook’s marketplace.
The e-commerce sector is also evolving, proliferating from C2C to Business-to-Customers (B2C) transactions, with traffic of the former dropping and the latter picking up speed.
With new B2C entrants, the market is steadily becoming crowded, competitive and concentrated. Lazada is by far the largest online marketplace in Thailand. The next two most popular operators – WeLoveShopping and WeMall – combined have only a quarter of Lazada’s traffic. A number of large retail groups are also moving into Thailand to extend their e-commerce services to the Thai population. These include 11street, Zalora and Uniqlo.
No. Websites 1 Lazada 2 JIB 3 Advice 4 Cmart 5 Central 6 Zalora 7 Tesco Lotus 8 Orami 9 Munkonggadget 10 Thai Ticket Master Table 6: Top 10 B2C Websites, 2016 Source: ecommerceIQ The largest market segment is electronics and media, which was worth EUR 911.1 million in 2016, whereas fashion and toys/hobbies/DIY are the two segments where the strongest Compound Annual Growth Rate (CAGR) is expected over the next 5 years – 27% and 21%, respectively.52
51 Thailand Board of Investments (). Thailand’s Digital Economy & Software Industry 52 http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/ASEAN-in-Focus-The-Thai-Consumer- Market/rp/en/1/1X000000/1X0A8YMK.htm
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Revenue in 2016 Revenue in 2021 % Change in 2016-2021 (US$ billion) (US$ billion) Electronics & Media 1.12 1.77 +10% Toys, Hobbies & DIY 0.39 1.03 +21% Furniture & Appliance 0.39 0.86 +17% Fashion 0.39 1.31 +27% Food & Personal Care 0.15 0.34 +17% Total 2.45 5.31 +17% Table 7: Thailand’s e-commerce market, 2016 & 2021 Source: Statistica Note: Revenues include sales of physical goods via a digital channel to a private end users (B2C) and purchases via both desktop computer and mobile devices, but exclude digital media, digitally distributed services, B2B markets, and resale of used goods and sales between private persons
Thailand’s ICT Trade Trends
Thailand is a global leader in Hard Disk Drive (HDD) manufacture and exports. According to the latest available data from the World Bank, the country’s exports in ICT products were valued at US$ 35 billion, while import value stood at EUR 22.8 billion in 2015. Thailand is also the second largest buyer of ICT products and services in the ASEAN region.53 The table below provides some of the key figures:
2010 2011 2012 2013 2014 2015 2016
ICT goods exports (% of total exports) 18.9 15.6 16.0 15.6 16.0 16.6 -
ICT goods imports (% total goods imports) 14.2 11.9 11.8 11.3 12.6 13.9 -
ICT service exports (% of service exports, BoP) 20.6 16.9 16.1 14.5 17.5 15.2 17.0
ICT service exports (BoP, current US$) 7.059 7.038 7.991 8.535 9.691 9.415 11.494
Computer communication, and other services 22.5 18.5 17.5 16.3 18.9 16.4 17.9 (% of commercial service exports) Communications, computer, etc. (% of service 23.1 19.1 18.0 16.8 19.4 16.9 18.3 exports, BoP) Computer, communication, and other services 35.1 36.1 32.1 34.9 36.2 39.2 39.2 (% of commercial service imports)
53 https://www.reuters.com/article/thailand-telecoms-investment/thailands-ict-spending-seen-up-3-8-pct-in-2015-hit-by-weak-economy- idUSL4N0ZV2R520150715
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2010 2011 2012 2013 2014 2015 2016 Communications, computer, etc. (% of service 35.5 36.4 32.4 35.3 37.7 39.7 39.7 imports, BoP) High technology exports (% of manufactured 24.0 20.7 20.5 20.1 20.4 21.4 - exports) Table 8: Thailand ICT Industry export/ import factsheet, 2010-2016 Source: World Bank (2017)
3.1.1 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
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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 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.
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3.1.2 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 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: http://www.tct.or.th/en/
3.1.3 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
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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 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.
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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.
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.
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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 2018 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 this year will focus on three key themes: networks, telco 4.0, and wholesale. It will explore the challenges and opportunities for planning, deployment and optimisation of networks for next generation connectivity; strategies, innovation and new services of telco 4.0 for the digital native; and the capacity, content and collaboration opportunities in the wholesale business. The event is expected to attract over 100 speakers, more than 50 sponsors & exhibitors, and over 750 attendees. It is scheduled for 19-20 March 2018, and is going to take place at the Centara Grand & Bangkok Convention Centre, CentralWorld, in Bangkok.
Broadband TV Connect Asia 2018 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 in one place. The next edition of the event is going to take place on 24-25 April 2018 in Bangkok, at the AVANI Riverside Hotel.
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E-Com Logistics Show is a 3-day event being held between 2-4 May 2018 at the Bangkok International Trade & Exhibition Centre (BITEC), in Bangkok, Thailand. The event will focus on IT solutions, In-house solutions and freight transport system, computer hardware & software, digital services, and e-retail chain, among others.
The trade show CEBIT ASEAN Thailand - ASEAN’s Business Festival for Innovation and Digitalisation will be hosted at the IMPACT Exhibition Centre in Muang Thong Thani, Nonthaburi, Thailand, on 18-20 October 2018. It will be the largest B2B technology exhibition and conference in the South East Asian region. Cebit ASEAN Thailand 2018 will be welcoming all key industry dignitaries, government policy makers, enterprise and government buyers, and business professionals from all across the South East Asian region. At least 8,000 professional visitors and 300 leading exhibiting companies are expected at CEBIT ASEAN Thailand 2018. The event’s key themes for 2018 are: e-business, e-commerce, information technology, and communication technology. The main sectors, covered under the trade show, will include 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.
3.1.4 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:
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Limitations on Foreign Direct Investment (FDI) and foreign participation in service sectors: The Foreign Business Act 1999 (FBA), which lays out the overall framework 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.54
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.55
54 Ibid. 55 http://madb.europa.eu/madb/barriers_details.htm?barrier_id=11162
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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, 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
Thailand’s IT hardware market was negatively impacted during 2012-2014 by the baht depreciation and political unrest that resulted in households and enterprises deferring purchases. Therefore, the market is currently recovering from this disruption.
According to Business Monitor International (BMI), the market is expected to expand to THB 75.5 billion (EUR 1.95 billion) in 2018, and reach THB 77 billion (EUR 1.99 billion) in 2021, growing at a CAGR of 0.7%.56 The mass market PC demand is forecasted to be under threat from smartphones, but the sales should balance out in the enterprise market and in premium retail sales. The replacement demand is also expected to grow at a CAGR of 3.8% between 2016-2020 to the value of THB 109.1 billion (EUR 2.82 billion) in 2020.57 There is a bright outlook for enterprise hardware sales in Thailand, specifically for data centre equipment, as the government has introduced tax incentives to encourage domestic and international businesses to set up at least 40 data centres in the country.
Figure 16: Hardware market forecasts, 2015-2021 Source: Business Monitor International (2018)
56 Business Monitor International (2018). Thailand Information Technology Report Q1 2018 57 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html
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In 2014, it was tablet sales that had the biggest impact on IT hardware market, with tablets per 100 households increasing 8.5 percentage points to 13.8%, compared to an increase of 1.3 percentage points for desktops to 21.8%, and a 2.7 percentage points increase for notebooks. Although tablets were the fastest growing segment of the market, the overall level of device penetration remained lower than either of the traditional form factors. This does not however translate to tablets outselling other form factors by a significant margin, with BMI attributing a far greater share of tablet sales to first-time buyers, whereas notebook sales concentration to upgrade/replacement market, meaning they were not captured in device density statistics. In 2016, however, the sharp contraction of the tablet demand in the retail market has resulted in the overall computer hardware decline. The hardware outlook in the period of 2017-2021 is more uncertain because of the cannibalisation of tablet and low-end notebook use by smartphones, with an increasing number of consumers relying on mobiles as their only device for internet access.
On the other hand, research by Statista notes that revenue in the “consumer electronics” segment amounted to US$ 988.8 million (EUR 804.4 million) in 2016, and predicts it to show an annual growth rate (CAGR 2016-2020) of 10.5%, resulting in a market volume of US$ 1,474.4 million (EUR 1,199.4 million) in 2020.58
Thailand’s large domestic electronics industry is geared towards exports (see section ‘5.3 Useful Statistics’ for more information on exports/imports). The key product category supporting Thailand's IT hardware trade surplus is hard disk drives (HDD), for which it had the largest trade surplus globally at US$ 9.6 billion (EUR 7.8 billion) in 2015 - far ahead of the Philippines with the second largest surplus at US$ 2.6 billion (EUR 2.1 billion). However, exports of HDDs are exhibiting a slowdown due to changing technology trends as consumers shift to cloud storage and mobile devices. This decline has been offset by the expansion of the printer and copier as well as semi-conductor and integrated circuit exports over 2011-2015. In terms of end-user demand, however, neither of these are high-growth product categories, which presents a medium-term downside for the Thai industry and IT hardware trade balance.
58 https://www.statista.com/
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There are over 800 factories dedicated to electronic and IT equipment component manufacturing in Thailand. Many are run by leading international firms, including Japanese, South Korean, Chinese and American companies.59
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 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. This has helped electronics to become the second-largest recipient of foreign investment in Thailand’s manufacturing sector, after automobiles.
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).
The table below presents Thailand’s IT hardware trade balances for comparative perspective.
Thailand’s IT Hardware Trade 2010 2011 2012 2013 2014 2015 2016 (US$ million)
Trade balance (US$ million)
Computer hardware 11,742 8,653 10,334 9,490 10,394 10,181 9,496
Computer parts - 421 412 - 280 808 673 652 974 Consumer electronic - 2,913 - 2,742 - 3,970 - 3,139 - 3,196 - 2,409 -1,918 components IT hardware total 8,408 6,323 6,084 7,159 7,870 8,424 8,552
59 The Report: Thailand 2012.
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Thailand’s IT Hardware Trade 2010 2011 2012 2013 2014 2015 2016 (US$ million)
Exports (US$ million)
Computer hardware 14,518 12,349 15,239 13,843 14,388 14,027 13,038
Computer parts 3,611 3,975 3,497 3,911 3,621 3,296 3,116 Consumer electronic 10,109 10,005 7,909 8,885 9,485 9,683 10,335 components IT hardware total 28,237 26,329 26,644 26,639 27,493 27,006 26,489
IT total as % of national exports 14.5 11.5 11.6 11.7 12.1 12.8 12.4
Imports (US$ million)
Computer hardware 2,776 3,696 4,905 4,354 3,994 3,846 3,542
Computer parts 4,032 3,563 3,777 3,103 2,948 2,644 2,142 Consumer electronic 13,022 12,747 11,878 12,024 12,681 12,092 12,254 components IT hardware total 19,830 20,006 20,560 19,480 19,623 18,582 17,937
IT total as % of national imports 10.9 8.8 8.3 7.8 8.6 9.2 9.2
Table 9: Thailand IT Hardware Trade, 2010-2016 Source: BMI Research (2016), ITC
The key IT hardware segments are further discussed under segmentations of hard disk drives; components; desktops and notebook; tablets; printers, copiers and peripherals; servers; and other segments.
Hard Disk Drives
The Hard Disk Drive (HDD) and the electronics segments of the Electrical & Electronics (E&E) industry contribute significantly to the Thai economy. The country produces one third of all HDDs in the world and it is home to some of the largest producers. These producers include Seagate, Western Digital, and Hitachi Global, all of which have manufacturing factories clustered around the outskirts of Bangkok and in industrial zones on the Cambodian border. In general, Thailand’s HDD cluster is concentrated in the country’s central and north-eastern regions near Bangkok.
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In 2012, Hitachi Global and Western Digital merged to comprise the majority share of HDD manufacturing.60 Seagate Technology is the longest operating HDD manufacturer in Thailand.
Several Thai government agencies and organisations support the growth and development of the E&E industry.61 For example, there is the Electrical and Electronics Institute, Hard Disk Drive Program, International Drive Equipment and Manufacturers Association, Asian Institute of Technology (AIT), Institute of Field Robotics , National Electronics and Computer Technology Centre (NECTEC), and the Thailand Science Park, which is operated by the National Science and Technology Development Agency (NSTDA).
There are more than 100,000 workers employed by the HDD industry and the industry contributes more than THB 300 billion (EUR 7.8 billion) worth in exports each year.
The country, however, must confront the competition from other developing countries, such as China and Malaysia, in order to maintain its status as the world’s number one HDD production base. Thailand is now focused on enhancing its R&D capacity regarding the use of advanced technologies in HDD production and developing the requisite infrastructure for supporting the growth of the HDD segment.
Thailand’s strategic location in South East Asia and high-output manufacturing facilities have made it a premier base for the global E&E industry. Foreign companies are drawn by the low- cost, highly-skilled Thai labour force as well as the government initiatives to forge constructive partnerships between the private sector and public research institutes.
Despite the fact that Thailand remains a world leader in the production of HDDs, many components like semiconductor devices, transistors, and diodes are still imported, leaving an opening for more foreign direct investment and further opportunity for local manufacture.
Between 2011-2016, the HDDs underwent a sustained contraction, a trend that reflected the weak demand for traditional HDDs and the relatively low exposure of the Thai industry to newer
60 The Report Thailand: 2012 61 Thailand Board of Investment (2015). http://www.boi.go.th/tir/issue/201502_25_2/42.htm
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data storage Solid State Drives (and Hybrid-SSDs). Thailand, however, will continue to be a global HDD industry leader due to the fact that top two HDD manufacturers – Western Digital and Seagate – both have facilities in Thailand, and the cluster is well developed after local production HDD inputs increased to incorporate firms such as Hutchinson Technology, NHK and Seiko. In 2015, investments were also made to modernise operations, such as when Seagate announced a five-year THB 15.3 billion (EUR 396 million) investment to add new building at its Karat facility.
Components
Thailand’s components industry is concentrated in the intermediate stage of integrated circuits (IC) production, and ICs are the largest import category for consumer electronics in Thailand, as well as second to HDD in terms of export value. The value of ICs imported into Thailand in 2016 reached US$ 7.57 billion (EUR 6.16 billion) while exports reached US$ 9.8 billion (EUR 7.97 billion).62 Ranked in order of importance, the major export markets for Thailand’s ICs are: Hong Kong, Taiwan, Singapore, and China.
The continued miniaturisation of electronic devices from smartphones to wearables is ensuring increased demand for integrated circuits and profitable opportunities for investors. In particular, recent technological innovations, such as smartphones, wearables and web connected electronics are expected to drive the market growth. As an integral part of smartphones, ICs are an important segment for a market that was estimated to be worth EUR 900 billion in 2015. Not only do integrated circuits play a central role in smartphones and tablets, but they also power the next generation of smart devices. The arrival of next generation web connected electronics, wearable devices and Internet of Things (IoT) devices is likely to boost the demand and growth of the IC market further. As a result, the global IC market is forecast to reach EUR 340 billion in 2019, driven by smartphone industry and the blending of everyday devices with internet connectivity. Thailand’s prospects for IC market growth are, therefore, bright.
62 https://atlas.media.mit.edu/en/profile/country/tha/#Imports
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The industry is promoted through Thailand’s IC Cluster that encompasses IC design, testing and assembly.
The key players in the industry include Hana, NXP, Sony, Toshiba, Microchip and Circuit Electronics.
Desktops and Notebooks
After challenging market conditions in 2012-2014, the desktop and notebook markets strengthened in 2015, presenting growth opportunities to vendors as well as a boost from deferred spending from the previous period of uncertainty. However, the growth was short-lived as the most recent official statistics show a reverse trend in 2016, with household PC penetration dropping back to 28.4%. Low penetration means there is theoretically a potential for sustained flow of first-time PC buyer households as incomes rise and communications infrastructure expands. But the latest data on smartphone penetration and consumers opting for smartphone as their only computing device increase uncertainty on such potential.
Figure 17: APAC household PC penetration, 2016 Source: Business Monitor International According to Thailand’s National Statistics Office (TNSO), the PC ownership per 100 households has declined in every region in 2016, regardless of the existing level of penetration. There was, however, a divergence of buying intentions across regions, with households in North-Eastern
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Thailand twice as likely to buy a PC in one or two years than those in Bangkok. This means there is a first-time buyer potential in the provincial and rural areas.
Notebooks were the most common device in Thailand, with 20.4 units per 100 households in 2016. There were, however, declines in notebook ownership in every region in 2016, with the most significant decline in Bangkok. This trend is explained by competition from both tablets and smartphones, which pose a significant threat to replacement spending among casual, more content consumption oriented consumers.
The TNSO data also provides some key insights on notebook and desktop variations. The decline in desktop ownership between 2015-2016 was faster than the decline for notebooks, which confirms the trend of customers preferring mobile PCs in the retail market. It can be expected that declines in desktop ownership will be sustained as households do not replace them at end of life, while the notebook market may grow on the back of functionality traits, namely, offering greater functionality than smartphones.
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 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. However, Acer has recently announced that it will use Thailand as its logistics and spare parts hub for the Indochina region to capitalise on the region’s growth.
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, beating competition from its nearest rivals HP and Acer after it overtook them in total volumes in 2015. Lenovo’s move to the top position was supported by an increase in marketing spending as well as a doubling of retail channels to 400 outlets.
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For 2015, Lenovo expected PC revenue to account for 70% of the total revenue in Thailand, smartphones 20%, and tablets 10%. Lenovo had previously selected Thailand as a key part of the company's growth strategy in the ASEAN region and announced it would invest an additional US$ 5 million (EUR 4.1 million) in the country to increase its market share. In February 2015, Lenovo announced its latest target to become the top PC vendor in Thailand in 2015, with at least 20% market share. In order to achieve this goal, it increased the local investment budget by 60% from 2014. Specific targets include the corporate market (PCs and System X servers) and growth in the consumer PC and smartphone markets. Meanwhile, Lenovo launched its Think Forward 2015 events in Thailand in March 2015, targeting its product range of PCs and tablets at Thailand's manufacturing segment.
At the same time, Acer continued to lead the notebook market in 2015 with a 31% share.63 In February 2016, Acer also stated it was looking into bidding for the government's megaprojects that involve intelligent transportation systems, in order to offset slow consumer spending. PC sales of Acer Thailand grew 13.8% in 2015, higher than the industry's growth, thanks to the company's strategy of offering Acer devices preloaded with Windows 10 at special prices.
With the projection of little-to-no growth in the PC market, Acer is following the trend of transitioning to promoting gaming PCs and has earmarked THB 1 million (EUR 25,882) to do so in Thailand. High-performance gaming computers and two-in-one notebooks - which combine laptops and tablets - will be growing segments representing the future for Thailand's computer industry. In addition, all-in-one computers, which integrate the computer case and system components into the monitor, will soon replace traditional desktops. The local gaming computer market will make up the most significant buyer group in Thailand where the gaming computer market is expected to be worth up to THB 5 billion (EUR 129.4 million) within the next three years.64
Acer has also responded to the threat from Lenovo’s aggressive marketing campaign by allocating a marketing budget of THB 300 million (EUR 7.76 million) for Thailand, Laos and Cambodia in February 2015. The budget will support a regional expansion - with Thailand acting
63 Bangkok Post (2016).http://www.bangkokpost.com/tech/local-news/855660/acer-to-use-thailand-as-parts-hub-for-indochina 64 Bangkok Post (2015).http://www.bangkokpost.com/tech/local-news/756148/brands-eye-professional-pcs
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as a hub - and help the company achieve its target of 25% revenue growth in 2015. As well as funds for marketing, Acer plans to improve its after-sales service.
Acer faces a challenge from its fellow Taiwanese vendor ASUS. However, with declining notebook volume sales ASUS may shift its focus towards the tablet market where it has relative strength compared to other desktop and notebook manufacturers. ASUS has set a target of becoming the third-largest player in the Thai tablet market with a 10% share, behind Apple and Samsung. ASUS plans to take a number of measures to achieve its goals, including strengthening its distribution channels across the country and increasing its product range.65
Tablets
The tablet market saw an impressive growth period from 2011-2013 when it outperformed all other device categories and surpassed notebooks as the largest volume category in 2013. The tablet market had strong growth momentum in 2014 as evidenced by a 2014 survey of 1,300 Asia Pacific consumers, in which 35% desired tablets and 25% desired notebooks. One significant factor boosting the tablet market was the government procurement of devices for use in the education system, the “One Tablet Per Child” initiative.66
In May 2012, the government finalised a THB 1.02 billion (EUR 26.40 million) deal for procuring approximately 1 million tablets. The deal saw tablets distributed to students aged six to eight nationwide as part of the “One Tablet Per Child” initiative. The government contracted Chinese vendor Shenzhen Scope for the project, after reportedly rejecting bids from larger players such as Lenovo and Huawei because the price was out of the government's budget. Shenzhen Scope delivered 400,000 tablets within 90 days, with a further 530,000 distributed at a later date. The device selected was the Scopan SP0712, with a seven-inch screen running on Android system. Under the deal, Shenzhen Scope created 30 help centres in Thailand to support the campaign. There was a second procurement phase and in total the government reported it had spent THB 3 billion (EUR 77.65 million) for a total of 900,000 tablets, with 868,886 distributed by
65 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html 66 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html
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January 2013. The government has pledged to ultimately distribute 7 million tablets for education, but following the coup in 2014, the Office of the Basic Education Commission required schools change the policy so that tablets were for shared use within the schools, rather than owned and taken home by students.
The growth of tablets, however, has slowed down in 2015-2017 due to contracting demand for tablets and increased consumer preferences for smartphones or phablets. This has resulted in declining retail market for tablets.
Lenovo and Acer are two big players in the Thai tablet market. Apple and Samsung have been gradually losing their share of the overall global tablet market, down to 41% at the third quarter of 2015 from 45% one year earlier. With a number of new market players this trend appears to apply also to Thailand.67 In November 2015 Lenovo stated it was targeting middle- and high- end consumers in Thailand and was aiming to more than double its tablet market share from 2% to 5%.68 Huawei, LG, and Acer have also made headway on the tablet market. For example, Acer has launched a hybrid notebook, Aspire Switch 10, and an Android-based tablet, Iconia One 7, in Thailand with the aim of maintaining a 25% share of the notebook market and 10% of the tablet market.69
After rapid diffusion of ownership among the core tablet market of young, affluent and urban consumers, the tablet market has been contracting. According to BMI estimates, tablets have seen a continuous decline since 2015, primarily due to longer replacement cycles and competition from new “phablets” and smartphones on the market.
67 IDC (2015).http://www.idc.com/getdoc.jsp?containerId=prUS25811115 68 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html 69 The Nation (2014).http://www.nationmultimedia.com/business/Acer-hopes-to-stem-sales-decline-with-new-hybrid-n-30237198.html
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Figure 18: PC volume forecast, 2015-2021 Source: Business Monitor International
A recent report from the International Data Corporation (IDC) also notes that the worldwide tablet market continued its decline in 2016, receding by 12.3% in the second quarter. The decline is the result of vendors beginning to refocus their product lines toward productivity and consumers holding off on purchases.70
Microsoft partner vendors are using Windows and new Central Processing Unit (CPU) technologies to develop innovative hybrid notebook designs that threaten vendors at the premium end of the tablet market.71 Windows has a traditional strength in productivity-use cases and software, with the OS being central to the enterprise market. There is therefore an opportunity for vendors to leverage this strength over rival iOS and Android devices by designing tablets with strong productivity functionality alongside the passive media consumption features.
70 IDC (2016).http://www.idc.com/getdoc.jsp?containerId=prUS41632416 71 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html
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Printers, Copiers and Multifunctional Peripherals
Printer and copier spending has declined in 2015 and 2016, reflecting the trend for overall computer hardware spending. The sharpest falls were for spending 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 activities. However, this trend is still outperforming the developed markets, because vendors can still target the ongoing information process, particularly among SMEs.
Servers
Thailand is a relatively immature server market, which is reflected in the low density of secure servers. Demand, however, is growing fast and server spending growth outperformed in 2015 and 2016, driven by local investments in data centre facilities. Vendors and service providers are increasingly looking to meet the growing demand for cloud computing services and content provision, which is likely to result in server spending growth.
Figure 19: Secure internet servers per 1 million of population, 2006-2015 Source: The World Bank
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Other Segments
In terms of hardware-led innovation, there is an increasing number of vendors who release ‘PC on a stick’ devices that use a portable HDMI device to turn a monitor (or TV) into a Windows 10 PC. They are primarily low-cost devices, which are vastly underpowered compared to a traditional desktop or notebook. However, due to low cost and potential for interoperability, these devices have the potential to receive traction among customers who value affordability.
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 Advance Agro Main Product: Double A paper for printers and copiers. http://www.doubleapaper.com/ Public Co. Ltd. – Advance Agro is the first integrated pulp and paper Double A Paper manufacturer in Southeast Asia to be certified for ISO 14001 environmental management standard. Advance Agro obtains its raw material from 3 to 5 year old cash crop plantation trees, which are grown in abundance from geographically and advantageous locations in Thailand. BaNANA IT Banana IT has many branches around Bangkok and http://www.bananait.com/ Thailand. Notebooks, PCs, CPUs, mainboards, graphic cars, RAM memory, monitors etc. Authorized dealer for Sony, Apple, Acer etc. Bara Advanced Bara Advanced Infotech Co. Ltd. ranks as the top vendor of http://www.baraadv.co.th/ InfoTech Co. Ltd. COMPAQ PC and IBM eServer pSeries (RS/6000) systems in Thailand. Com7 Public Co. Com7 has grown into a leading retailer, importer and http://www.comseven.com/ Ltd. distributor of computer and IT-related products. Products include Apple, Smartphone, tablets, notebooks, desktops, computer components such as CPUs, hard drives, network accessories. Computer Union Co. Computer Union Co. Ltd.: Web site support, hardware, http://www.cu.co.th/ Ltd. software, banking solutions and e–business services (part of Saha–Union). Dell Thailand Dell computers in Thailand. Tablets, laptops and desktop http://www.dell.co.th/ computers. Many outlets in Bangkok and Thailand. Available at IT City Pantip Plaza and Fortune Town. Enpro Products Co. Surface plating and cleaning industries for hard disk drive http://www.enpro.co.th/ Ltd. industries, electronics industries, telecommunications, printer industry.
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Company Name Area of Expertise Company Website
I.J. Siam Co. Ltd. Various types of Ink Jet media for all Ink Jet printer and http://www.ijsiam.com/ Photo Sticker Software. Thailand's first Photo Sticker Software. Identify RFID The services of Identify RFID include providing RFID http://www.rfid.co.th/ hardware that covers both active and passive RFID technologies. Consulting services. HF Desktop readers, HF RFID network readers, HF RFID reader clean rooms.
iStudio and iBeat by Distributor of Apple products, such as Apple Watch, iPod, http://www.maccomseven.com/ ComSeven iPad, iPhone, accessories. iCare as an Apple authorised service provider. iStudio by iStudio by Copperwired has various outlets in Bangkok: J- http://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 http://www.itcity.co.th/ Ltd. other related information technology products (One Stop Shopping IT Products) under the trade name IT CITY. Many large stores around Bangkok (Pantip Plaza, Siam Paragon, Fortune Town etc.) and Thailand. JP Virtual Solutions Software development, maintenance contracts, hardware, http://www.jpcomputing.com/ web services, databases, graphic design, technical support. Login Technology Logintech On line shop for PCs, netbooks, laptops, Apple http://www.login.co.th/ and Computer Co. computers, digital cameras, printers, scanners, televisions Ltd. etc. SVOA Plc. SVOA produces and/or distributes desktop and workstation http://www.svoa.co.th/ computers, notebooks, projectors, printers, scanners, digital photography products, cutting machines, engravers, software, computer accessories. Table 10: Examples of IT hardware companies in Thailand
3.2.2 EU Entry Opportunities
In terms of consumer groups, the main opportunity for PC vendors in Thailand will be 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. There is also a substantial student and first-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 has a large gaming population, and local gamers are willing to invest on equipment and accessories for the best gaming experience. The local gaming computer market is
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expected to be worth up to EUR 127.8 million within the next three years and is likely to be one of the most significant buyer verticals in the PC segment. Acer is already following this trend by recently earmarking THB 1 million (EUR 25,882) to promote its gaming PCs.
Although Thailand’s electronics market is well developed, the production of integrated circuits (ICs) remains an opportunity for manufacturers. In 2016, Thailand imported approximately EUR 6.17 billion worth of integrated circuits due to limited domestic supply. This offers manufacturers an opportunity to enter a profitable market with strong local demand. In addition to manufacturing, IC design and related activities also offer a burgeoning field of opportunity, particularly in wafer design, the area which still has plenty room for growth. The Thai government offers generous incentives for foreign investors that are willing to tap into Thailand’s highly advanced technology to produce and design the integrated circuits for next generation smart devices.
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 businesses to set up at least 40 data centres. 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, IT equipment companies which cater to the data centre requirements are likely to find growing demand for their products.
Exports of HDDs have recently slowed down in Thailand due to shifts in technology trends, consumer preferences for cloud storage and mobile devices, as well as increasing competition from China and Malaysia. To remain competitive, Thailand is now focusing on enhancing its R&D capacity on advanced technologies in HDD production. In addition, it is interested in developing required infrastructure for supporting the growth of the HDD sector. Opportunities, therefore, exist for technology transfer, HDD infrastructure provision and development.
With increasing competition from tier-2 South East Asian manufacturing destinations, 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
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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.
Finally, 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.
European Companies
Archos
Archos is a French multinational electronics company, which was established in 1988. It manufactures tablets, netbooks, smartphones, portable media players, recorders, portable data storage devices, and other digital consumer products. Its entry into the mobile phone market is quite recent, having released a series of models only in 2013. The company, however, is also expanding into the Internet of Things (IoT) market with the release of products, such as smart home systems, wearables and other smart objects. In 2016, it has also announced its plans to create its own network for connected objects through its subsidiary PicoWAN. 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.
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. With international sales accounting for 40% of the company’s EUR 264 million turnover in 2016, 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.
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3.3 IT Services
3.3.1 Market Overview
IT services have grown over the period of 2012-2016 as a result of companies outsourcing non- core operations and focusing exclusively on their core competencies. The healthy IT services penetration is likely to bode well for companies attempting to enter Thailand’s market. BMI research forecasts IT services to be the outperforming segment of the IT market during 2016-2020, driven by the growing adoption of consulting and outsourcing, and the adoption of the emerging technologies, such as cloud computing, machine-to-machine (M2M) communications and big data analytics. IT services sales are predicted to hit THB 100.3 billion (EUR 2.60 billion) in 2018 and increase to THB 127.9 billion (EUR 3.31 billion) in 2021, growing at a CAGR of 8.5%. Although cloud services adoption is likely to be behind the strong growth in IT services, basic digitisation services from public and private sectors will also witness a sustained number of clients.
Figure 20: IT services market, 2015-2021 Source: Business Monitor International
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The three major IT service product categories in Thailand are system integration, deployment and support, and outsourcing. Cloud computing is also rapidly taking off as a new product category in Thai IT services market.
With the arrival of the military government in 2014, the government has allocated US$ 561.25 million (EUR 456.6 million) for the development and improvement of ICT in order to increase the competitiveness of the country. Public spending remains hardware and IT services oriented, especially for hardware deployment and support. Custom applications are developed within ministries and public agencies, and there is also some spending within the Education and Healthcare sectors by public schools and universities as well as public hospitals. Moving forward, the government has acknowledged the need to begin integration in order to create a holistic smart government, which, in turn, will likely result in more IT services demand across public sector institutions.
The IT services market closed at US$ 2.77 billion (EUR 2.25 billion) at the end of 2014. Out of the EUR 2.25 billion, EUR 0.44 billion came from local systems integrators. Under the IT services category, the top three services foundation market categories are system integration, network consulting and integration, and hardware deployment and support. Overall, the outsourcing market is growing, but at a slow pace. In addition, an adoption of Data Centre services continues to increase as Banking, Financial Services and Insurance, Telecommunication, and Retail/Wholesale sectors have cautiously started investing in IT projects.
In 2017, system integration remained the largest category in terms of revenue, while industry information and networking software is considered a strong growth area. Additionally, security software development is showing increasing growth, with systems integrations expanding into security consulting, implementation, support and training services – areas that require high expertise in networks and antivirus applications. Lower-cost and more flexible terms of software- as-a-service packages are also likely to see growing interest from the SME market, offering new venues for vendors.
In recent years, Thailand's IT sector has also experienced a particular uptick in foreign demand for its IT outsourcing services, as a growing number of companies have "set up shop" in Thailand to take advantage of its trained IT workforce, solid IT infrastructure and leading incentives.
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Thailand also has the long-term potential to become a major player in IT outsourcing in South East Asia, with financially attractive options available for companies. However, the country also has challenges that limit the near-term potential. Thailand offers a quality, low-cost labour pool and a strong infrastructure. Its financial attractiveness and business environment are strong. However, political instability, poor English capabilities, data security concerns, and piracy are bottlenecks to growth.72 The Thai government shows great support and dedication to making Thailand a smarter, more innovative country. This gives Thailand a competitive advantage over other countries. Good human resources represent a crucial success factor for service outsourcing businesses and Thailand seems to recognise the need to train future IT employees.73
The top three IT services players are CDG, MFEC, and Loxley, having market share of 40%, 12%, and 11%, and revenues of EUR 149.30 million, EUR 66.12 million, and EUR 41.31 million, respectively. These are followed by other local systems integrators, like Metro Systems Corporation, SVOA, Advanced Information Technology, Datapro Computer Systems, Yip In Tsoi, TN Information Systems, and Stream IT Consulting.
Majority of local systems integrators are very traditional in nature. Most of them have started off as “box-sellers” and begin to adjust their positions into services players, following global vendors. The majority of them are part of a business group, being a parent company or subsidiaries, but the services offered by them are not limited to the group. End-users usually value a relationship with systems integrators more than product or services innovations. However, due to disruptive innovations presented in the market, systems integrators are competing to bring solutions that directly respond to distinctive needs of their clients.
Consulting Services
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
72 AT Kearney (2014).https://www.atkearney.com/research-studies/global-services-location-index/related-full/- /asset_publisher/VpbMOes4s1Oc/content/the-rising-stars-of-it-outsourcing/10192 73 PR Newswire (2014). http://www.prnewswire.com/news-releases/thailand-grows-as-a-regional-center-for-the-it-industry-247277331.html
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systems are still a key focus, with companies seeking solutions that directly respond to their specific needs. One potential driver of consulting services is likely to be organisations seeking help to better utilise cloud computing such as Software as a Service (SaaS) and Infrastructure as a Service (IaaS).74
In 2010 government agencies encouraged SMEs to utilise more information technology to improve their businesses processes, lift productivity and expand their trade both locally and overseas. The goal was also to simultaneously support the local software industry with trade missions seeking overseas business and local opportunities to develop software as a service to SMEs.75 According to government figures, it is claimed that more than 90% of SMEs are already using some form of IT to manage business processes and reduce costs. The Ministry of Industry offered to help pay for some SMEs to access software and IT services.
Outsourcing Services
Companies with significant room for scaling up outsourcing segments, such as those in animation, design, graphics, as well as embedded and mobile application software development, are increasingly looking at Thailand as a viable option for multi-location delivery strategies.
Most information technology outsourcing suppliers have a relatively small presence in Thailand today, primarily with a view of servicing the domestic market.76 Thailand shows great growth opportunities in the outsourcing segment, when looking at, for example, the growing demand from countries like the United States: 43% of companies in the United States utilise offshore outsourcing for IT services. Therefore, outsourcing services are expected to continue being a major contributing factor to the growth of Thailand's IT sector.
Among key developments, the Kasikorn Bank's 10-year outsourcing agreement with IBM was a landmark for the local industry. Banks are focusing not just on back-end systems but also on
74 IMC Institute (2013). http://de.slideshare.net/imcinstitute/cloud-thailand; Oxford Business Group (2016). http://www.oxfordbusinessgroup.com/overview/going-digital-take-period-resulting-improved-infrastructure; IBM (2016).http://www.ibm.com/cloud-computing/th/en/built-on-cloud/ 75 The Nation (2010).http://www.nationmultimedia.com/home/2010/03/26/technology/SME-campaign-to-boost-local-IT-firms-30125639.html 76 AT Kearney (2014). https://www.atkearney.com/research-studies/global-services-location-index/related-full/- /asset_publisher/VpbMOes4s1Oc/content/the-rising-stars-of-it-outsourcing/10192
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delivering services to customers through new media such as internet banking. This trend is leading some banks to focus on bringing certain IT functions back in-house, to integrate more closely with customer service functions. Kasikorn Bank is among those striving for a balance between in-house capabilities and outsourcing providers in a changing IT services landscape.
Like other countries in the region, Thailand is trying to increase its share of the global IT-business process outsourcing market, competing with leaders, such as India and the Philippines. A particular target has been Japanese firms, with Thailand as an outsourcing location for many Japanese companies. One of the largest overseas concentrations of Japanese nationals is found in Bangkok. According to the Ministry of Foreign Affairs of Japan, only Los Angeles, New York and Shanghai host larger Japanese populations. Bangkok and its neighbouring provinces are home to hundreds of Japanese manufacturing firms, notably in the automobile and electronic appliances industries. Over time these have attracted a wide spectre of Japanese-run supporting services. Among Japanese enterprises using Thailand as a hub for supervising global outsourcing work is NIIT Technologies, which manages contracts with rail-service operator Eurostar Group and media organisation Morris Communications Group from its Thai data centre.77
Meanwhile, the severe floods of 2011 and the civil unrest of 2013-2014 have given boost to demand for disaster recovery and business continuity services. Customer expectations of these services are growing, with more demand for 24/7 access to uninterrupted services and more robust security solutions. The greatest opportunities for such services lie in the financial services, telecoms and manufacturing segments.
Smart Services
The Asia Pacific outlook for smart services adoption, also referred to as the Internet of things or M2M communications, is bright, although Thailand is not expected to be a regional leader. The International Data Corporation (IDC) estimates that the number of devices in the Asia Pacific Internet of Things will increase from around US$ 3.1 billion (EUR 2.5 billion) in 2015 to
77 Lambregts, B., Beerepoot, B., &Kloosterman, R. C. (2016). https://books.google.com.vn/books?id=muhzCgAAQBAJ&printsec=frontcover&hl=de#v=onepage&q&f=false
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US$ 8.6 billion (EUR 6.9 billion) by 2020 - while over the same period the market size will increase from US$ 250 billion (EUR 203.4 billion) to US$ 580 billion (EUR 471.8 billion). However, the leading markets in Asia Pacific are China and a cluster of more developed markets such as South Korea, Australia and New Zealand.78
Although remaining a small growth area, the potential applications of smart services are widespread in the Thai enterprise and public sectors. One of the potential areas for smart services is in the healthcare segment. Healthcare is increasingly looking for solutions, which offer improvements to the efficiency and flexibility of services in response to an ageing population. Both vendors and public administrators are looking for innovative solutions.
As a sign of the market’s potential, NTT introduced in January 2015 a mobile service for M2M communication, known as Arcstar Universal One Mobile. The platform combines universally- integrated mobile networks with the firm’s Arcstar Universal One virtual network to allow secure M2M connection.
Software Services
One important part of the IT service industry in Thailand is the software service market, which comes from the enterprise software market expansion. Thai companies have a strong market share compared with foreign companies regarding software services. Software maintenance and data service centres play a crucial and dominant role in the software service industry in Thailand, accounting for around 42.7% of total production value of software services. Software service outsourcing follows at around 31%.
T.C.C. Technology Co., Ltd. is one of the leading providers of commercial data centre services in Thailand.79 Net Niche Call and Data Centre also stand at the forefront, and Fujitsu Systems Business (Thailand) remains a top foreign-invested company.
78 IDC (2015). http://www.idc.com/getdoc.jsp?containerId=prHK25553415 79 Board of Investment, (2011). “Software and Data Centers Firms Key Players in Stable Growth.” http://www.boi.go.th/tir/issue/201102_21_2/42.htm
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The growth of the software services segment is likely to be further boosted by the government’s decision to grant eligibility for an eight-year corporate income tax exemption as well as exemption from import duty on machinery, within the software services segment.80
Local Players
The section below provides details on some of the local players in the industry.
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 the country’s leading ICT solutions provider, which administers the largest ICT network in the country. INET was established in 1995 jointly by the Communications Authority of Thailand (CAT), TOT Corporation Public Company Limited and the 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. Currently, the company records over TBH 1.5 trillion (EUR 38.82 million) in annual sales.
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. The move was catalysed by Thailand moving up the global cloud readiness ranks from
80 Board of Investment, (2011). “Software and Data Centers Firms Key Players in Stable Growth.” http://www.boi.go.th/tir/issue/201102_21_2/42.htm
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13th place in 2013 to 9th place in 2014. INET’s DaaS offering leverages Citrix’s desktop virtualisation solution XenDesktop to reduce companies’ total cost of ownership by up to 40% and decrease IT infrastructure initiation time from 45 days to a single day. It is also currently involved in constructing the first phase of its third ICT data centre in Saraburi province, which is scheduled for completion in March 2018. Based on the number of Vmware licenses, INET has around 30% of the cloud market in Thailand and is ranked in the top three in South East Asia. In July 2017, the company has further partnered with CISCO to provide information technology solutions designed for SMEs, with INET projecting about TBH 100 million (EUR 2.59 million) in revenues from SMEs in 2018.
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.
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. Over 49 years of
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operation, 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.
3.3.2 EU Entry Opportunities
Severe floods in 2011 and the civil unrest of 2013-2014 have given boost to demand for disaster recovery and business continuity services among Thai enterprises. Customers are seeking service providers, which can ensure 24/7 access to uninterrupted services with robust security solutions. The greatest demand for such services lies in the financial, telecoms and manufacturing segments.
Another potential opportunity for European companies is the provision of Software-as-a- Service (SaaS). There is strong demand for SaaS among various business segments. As a sign of the market’s potential, NTT introduced in January 2015 a mobile service for M2M communication, known as Arcstar Universal One Mobile. The platform combines universally- integrated mobile networks with the firm’s Arcstar Universal One virtual network to allow secure M2M connection. The government has also granted SaaS companies eligibility for eight-year corporate income tax exemption and exemption from import duty on machinery in order to stimulate the segment’s growth.
In terms of smart services opportunities, the healthcare industry, in particular, represents an area with promising opportunities for solutions offering improvements to the efficiency and flexibility of services in response to an ageing population. Both vendors and public administrators are looking for innovative solutions; for example, Samitivej Hospital and electronics firm Sony collaborated to promote medical services in Thailand and the ASEAN region through pilot medical projects such as telehealth camera systems and content management systems. Sony has provided the hospital with regular updates on its medical products and solutions and shares case studies and reference installations. The company
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has also provided equipment from its range of professional audio and video solutions, surveillance devices and video-conferencing systems in an effort to enhance the efficiency of the operations of the hospital.81
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. One potential driver of consulting services is likely to be organisations seeking help to better utilise cloud computing such as Software as a Service (SaaS) and Infrastructure as a Service (IaaS).82
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 both be 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.
As the industries modernise and automate, new, emerging areas also open up for systems integration services. Thailand’s manufacturing, banking, finance and telecom sectors are projected to be the biggest-spending software segments in the next few years, accounting for about 40% of the total spending. Spending will be driven by the growing emphasis on cost-efficiency and enhanced productivity by automation. As the industries explore their options for technological upgrade for efficiency gains, deployment of Internet of Things solutions, that utilise sensors, big data and data analytics, will be increasingly drawing attention of industry players. In the short term, the automotive manufacturing sector is likely to be the early adopter of such technologies.
81 Samitivej (2014).https://www.samitivejhospitals.com/en/events/sonymou/ 82 IMC Institute (2013). http://de.slideshare.net/imcinstitute/cloud-thailand; Oxford Business Group (2016). http://www.oxfordbusinessgroup.com/overview/going-digital-take-period-resulting-improved-infrastructure; IBM (2016).http://www.ibm.com/cloud-computing/th/en/built-on-cloud/
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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, 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 has 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.
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3.4 IT Software
3.4.1 Market Overview
The software sector is one of the major components of ICT market, which is expected to record a strong demand for software products from both public and private sectors, driven by the country’s initiatives to modernise and digitalise Thailand’s economy.
The software industry in Thailand has shown strong growth over the past years, as increased usage of the Internet and software applications has steadily grown the overall market value of the industry.83 The industry’s sales value in 2014 accounted for THB 14.7 billion (EUR 380.5 million), representing a 9.1% market share of the total IT market value.84 According to BMI research, the estimated software sales value increased to THB 27 billion (EUR 698.8 million) in 2016, and it is currently forecast to reach THB 42 billion (EUR 1.09 billion) by 2021, growing at a CAGR of 9.2%.85 The software market is expected to perform well in the medium term driven by demand coming from both large enterprises and SMEs.
41.954,50 38.272,80 35.090,10 32.212,70 29.385,80 25.521,60 27.037,60
2015 2016e 2017f 2018f 2019f 2020f 2021f
Software Sales, THB million
Figure 21: Software market, 2015-2021 (in THB) Source: Business Monitor International
83 BOI (2015).http://www.boi.go.th/index.php?page=pdf_page&menu_id=100 84 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html 85 Business Monitor International (2018). Thailand Information technology Report Q1 2018
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The growth of Embedded and Enterprise Software market segments over the period of 2014- 2016 was driven by the high government and businesses spending on IT. In addition, software spending in the next five years is likely to be boosted by the government’s approval of the allocation of the 920-925 MHz spectrum for use with Internet of Things (IoT) technology, which is spurring the interest in software-enabled services, cloud computing, the IoT, big data and analytics. Revenue for mobile software applications rose on the back of expanding mobile phone services and high adoption rates among mobile users.
According to Dr. Rom Hiranpruk, the Director of Software Park Thailand, Thailand’s software industry is divided across three key areas: enterprise and embedded software programmes; digital content and multimedia; and support services, such as consulting, localisation and customisation.86
In terms of domestic software production segment, Thai developers are still very much at the fledgling stage, but are improving their skills and capabilities at an increasing rate. In 2016, the software workforce grew by 0.38%, and accounted for a total of 56,000 workers, working at about 350 IT enterprises.87 Multimedia specialists and animation graphics artists add additional 10,000 to the total industry count.
In 2016, the majority of local software market revenue came from domestic use and only a small fraction from export earnings. At the same time, domestic use has recorded, for the first time, a contraction of 5.72%, while exports have increased by 11%, when compared to 2015. Exports were driven by multinationals and Thai companies establishing physical offices abroad.88 In terms of end users of local Thai software, financial institutions, government and the travel industry have been the top three spenders on local software and services, while telecoms, public and state agencies, and the healthcare sector were the top three sectors for embedded software in 2016.89
86 Hiranpruk, Rom, (2016). “Thailand’s Software Industry.” http://www.business-in-asia.com/ict/dr_rom.html 87 https://www.bangkokpost.com/tech/local-news/1302091/depa-aims-to-curtail-software-slump 88 https://www.bangkokpost.com/tech/local-news/1302091/depa-aims-to-curtail-software-slump 89 https://www.bangkokpost.com/tech/local-news/1302091/depa-aims-to-curtail-software-slump
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Considering the overall software market in Thailand, including both local and international software products, there are over 870 firms (software houses) providing software products in Thailand.90 Spending on computer software is mainly driven by private corporations, the government and households or small home offices.91
29% 28%
7%
Private corporations Government Households or small home offices
Figure 22: Top 3 largest spenders on computer software Source: Thailand’s Board of Investments
Over the past few years, major export markets for Thai software products were Japan, Vietnam and the Philippines (see section ‘5.3 Useful Statistics’ for more information on exports/imports).92
In general, the main driver for software production in Thailand has been the financial sector, driven by demand for Software-as-a-Service (SaaS) solutions. Enterprise modernisation and e-government initiatives are also driving spending among larger enterprises and the government. Further software uptake is likely to increase from large companies starting to undertake investments in cloud, data analytics, cyber security and Internet of Things solutions, while the cost reductions in SaaS solutions and the growth of the local industry are expected to result in wider software uptake among SMEs.93
90 Charoen, D. (2013). International Journal of Social, Behavioral, Educational, Economic, Business and Industrial Engineering, 7 (6). 91 Board of Investment, (2011). “Software and Data Center Firms Key Players in Stable Growth.” http://www.boi.go.th/tir/issue/201102_21_2/42.htm 92 BOI (2015).http://www.boi.go.th/index.php?page=pdf_page&menu_id=100 93 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html
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In 2016, the serviced software production was dominated by local software houses with approximately 88% of the market share, while the packaged software has been more equally divided between international software houses (43%) and local software houses (57%).94
56,7% Packaged Software 43,3%
87,9% Serviced Software 12,1%
Local Software House International Software House
Figure 23: Market share of software production and software services, 2016 Source: National Science and Technology Agency (2016)
When categorising software market demand by economic sectors and software type, enterprise software demand is led by the finance sector (41.4%), followed by the government (26.2%) and motor parts (6.6%). The segment with the highest spending on mobile software is the financial sector (16.7%), which is also the highest spender on software services (23.6%). In software service, finance is followed by logistics (20.3%), and the government (15.1%).95 The table below shows just how integrated and vital the software industry has become across nearly every economic sector in Thailand:
Economy Percentages Enterprise Mobile Software Software Services Software Ministries and government agencies 26.2 16.7 15.1 Finance 41.4 35.5 23.6 Telecommunications 2.5 11.5 7.2 Education 5.9 1.4 2.5 Transport and Logistics 1.8 1.5 20.3 Manufacture 2.9 11.8 6.0
94 National Science and technology Development Agency (2016) 95 BOI (2015).http://www.boi.go.th/index.php?page=pdf_page&menu_id=100
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Economy Percentages Enterprise Mobile Software Software Services Software Motor vehicles and parts 6.6 0.4 11.9 Medical and public health 3.5 0.0 2.5 Retailing 2.9 0.1 2.1 Travel 0.3 0.8 1.1 Jewel 0.6 0.0 0.0 Others 3.0 0.0 2.6 Table 11: Software and software service market share by economic sector Source: Charoen, D. (2013). International Journal of Social, Behavioural, Educational, Economic, Business and Industrial Engineering, 7 (6).
Thailand’s manufacturing, banking, finance and telecoms sectors are projected to be some of the biggest-spending software segments in the next few years, accounting for about 40% of total spending. Spending will be driven by the growing emphasis on cost-efficiency and enhanced productivity by automation.
Given the contracted penetration rates of PCs and the proliferation of smartphone and tablet users over the 2014-2016 period, it is expected that the demand for mobile software products will also witness accelerated growth.
The software and services industry in Thailand receives government support through several targeted initiatives, including the provision of critical infrastructure, training for IT professionals, and assistance with access to finance. In particular, the Software Industry Promotion Agency remains the key agency in developing human capital for software production and promoting the global software trends in the domestic market.
In addition, the Software Park Thailand, which operates under the National Science and Technology Development Agency, promotes and develops the software industry in Thailand. Currently, there are 320 software companies listed under the Software Park Thailand. Since its establishment, the agency has stimulated the software market by expanding marketing channels and encouraging the use of technology in various industrial sectors. The agency also maintains the knowledge database on available products and services, and creates networks of business partnerships, in addition to consulting entrepreneurs on business improvements and marketing strategies.96
96 Software Park Thailand (2016).http://www.swpark.or.th/index.php?option=com_jumi&fileid=18&Itemid=171
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The key segments of the Thai IT Software industry are further discussed in detail below:
Enterprise Software
Manufacturing, banking and finance, and telecoms are projected to be some of the biggest enterprise software spending segments. However, the issue of pirated software remains a drag on spending growth even in the high spending sectors. There is a growing emphasis on cost- efficiency as enterprises aim to enhance productivity by automating their functions. Vendors can also find acceleration in areas, such as customer relationship management (CRM) solutions – one of the fastest growing software fields. Auto manufacturing is one of the industries that has been spending extensively on CRM to help agents and dealers log a record number of customer service interactions.
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 businesses, which are 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.
Government is also a significant source of enterprise software demand, which is driven by its initiatives to digitalise public services. Meanwhile, some hospitals, such as Siriraj, are spending on hospital information systems to improve management and enhance the efficiency of their operations.
Given the potential growth in the enterprise market, leading vendors are investing to expand their presence. Global Enterprise Resource Planning (ERP) software leader SAP has been competing aggressively across multiple customer service categories for several years, including business user solutions, small- and medium-sized enterprises, business platforms and industry solutions.
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Microsoft also has the potential to see increases in its enterprise revenues in the coming years. While management software remains at less than 10% of the total software market, basic application, such as ERP and accounting are finding increasing popularity with the business market.
Embedded Software
The major markets for embedded software are electronic systems for automotive and prepaid systems in mobile phones. The automotive sector is a key driver of the embedded software market in Thailand. The Thai Embedded Systems Association (TESA) has cooperated with universities and software firms to promote and develop embedded software as well as provided many training programmes to develop a skilled workforce to support the embedded software sector.97 Automotive electronic control systems have seen rapid growth in recent years in terms of the technologies applied and quantity installed. As a result, the volume of system-embedded software development has jumped dramatically, causing an increasing shortage of embedded software engineers.
Given the circumstances, more developers have been securing development resources by utilising overseas personnel in the last few years, mainly in Asia. Thailand has its own hardware (automotive) industry, which is vital for embedded software, and actively promotes foreign investment in the embedded software industry. Toyota Tsusho Electronics Thailand Co., Ltd. (TTET) was the first venture in this field to be officially approved by the Thailand Board of Investment (BOI).98 The company, by helping to promote and expand outsourcing of automotive control system software development, also wants to contribute to the growth of the embedded software industry in Thailand. TTET employs Thai software engineers, provides training in programming languages, development methodology and quality as required for automotive electronic control embedded software, and takes on contract development of automotive software. Embedded software’s consistent growth over the past decade further strengthens the position of foreign companies looking to enter embedded software markets. Thailand’s robust use
97 BOI (2015).http://www.boi.go.th/index.php?page=pdf_page&menu_id=100 98 Ibid.
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of complex machinery in crucial areas of the economy puts investors and producers in a convenient position to provide essential software products.
Operating Systems
In Thailand, there was limited impact on software and hardware sales from Windows 8/8.1 relative to most other markets in the region, as well as compared with previous launches of Windows operating systems. Challenging economic conditions and deferred PC purchases in a climate of political uncertainties were a drag on spending in Thailand. As a result of the low Windows 8/8.1 penetration, Windows 10 got off to a slower start in Thailand than in other regional markets after launching in late July 2015. The most recent browsing traffic data for PCs show Windows 10 accounting for just 5.8% of the total data in January 2016, though this should be put in the context of Microsoft already having surpassed Mac OS X and Android’s traffic share. The fact that the new OS will be a single platform across PCs, tablets, smartphones and the Xbox reflects Microsoft’s decreased focus on monetising its Windows OS product. This is moving it closer to the more successful strategies of Google (Android, Chrome) and Apple (iOS and MacOSX) that use their operating systems to respectively generate revenue from advertising and hardware sales. It is expected that Microsoft will continue to charge for Windows, but increasingly use the OS as a means of maximising Microsoft’s device penetration, with additional sales generated from additional products and solutions.99
Non-Windows operating systems fall far behind in Thailand. Apple’s Mac OS X accounted for just 4.7% of the market share in January 2016. Apple’s computing devices remain luxury aspiration devices and were hit hard by the baht appreciation in 2015, which reduced the affordability of Macbooks.100
Cloud Computing
Thailand’s cloud computing market is still in its relatively early stages of development. However, the market is expanding rapidly as international vendors target the growth opportunity and local firms and telecoms are seeking to get a foothold in the market. According to the latest available
99 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html 100 BMI Research (2016). http://store.bmiresearch.com/thailand-information-technology-report.html
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data from Thailand’s Electronic Government Agency, the cloud market in Thailand had an estimated value of THB 2.8 billion (EUR 72.5 million) in 2013, with sectors, such as public authorities, telecoms, healthcare and retail among early adopters. In 2016, the local cloud market reportedly grew by 16% with an undisclosed market value,101 while its growth projections for 2016- 2019 period estimate a market expansion of at least 30%.102 Software-as-a-service (SaaS), infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) sectors are expected to grow with the proliferation of data centres in Thailand.
One trend, which is supporting the sustained robust growth rate for cloud computing demand, is investment in data centre facilities. These facilities have received a boost in March 2015 when it was announced that Thailand’s government would offer tax incentives in order to encourage domestic and international businesses to set up at least 40 data centres in the country. The government, through its Board of Investment has launched a number of promotional packages to encourage foreign companies to partner with local businesses in data centre development. International partners can enjoy strong tax privileges if they decide to transfer technology into the domestic market. Data centre development projects also enjoy the highest BOI promotion of an 8-year corporate income tax exemption without cap, exemption of import duty on machinery/ raw materials and non-tax incentives.103
The SaaS market had the strongest adoption levels for relatively cheap and basic services, such as Google Apps, Microsoft’s Office 365 and Dropbox. However, enterprises are planning adoption of other services, such as Salesforce, OpenERP, Smartsheet and Amazon in the future. These trends support the projections that cloud computing sector is likely to take off in Thailand with companies increasingly seeking more tailored cloud software solutions.
Some of the international players have already begun servicing this market. In August 2015, US-based cloud accounting software provider Acumatica launched enterprise resource planning
101 Bangkok Post (2017). https://www.pressreader.com/thailand/bangkok-post/20170209/282029031971158 102 Data Center Dynamics (2017). http://www.datacenterdynamics.com/content-tracks/design-build/thailand-prepares-for-fast- growth/97695.fullarticle 103 Board of Investments (2015). http://www.boi.go.th/tir/issue/201506_25_6/42.htm
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(ERP) cloud system in Thailand, which provides a full Thai-language version of its technology in the market.
Based on cloud computing, the rising demand for disaster recovery solutions could spur further growth in cloud computing software businesses. The growing interest in disaster recovery stems from the occurrence of unforeseeable events, such as extensive flooding in Bangkok, as well as the high-profile shutdowns of several major data centre sites during times of civil unrest.
Digital Content
Finally, Thailand is one of the world’s top digital content hubs due to world-class production quality, talented personnel, low-production costs and knack for innovation. A large number of U.S., European and Asian multinational organisations outsource work to Thai companies.
Thai software and animation companies helped boost the country’s digital industry to an estimated US$ 0.4 billion (EUR 325.4 million) in 2017, by excelling both as subcontractors and original creators.
0,4
0,38
0,35 0,34
2014 2015 2016 2017f
Figure 24: Digital content revenue (US$ billion), 2014-2017 Source: DEPA, Nation Multimedia, Press Reader, Bangkok Post, SIPA
The digital content in Thailand is dominated by the gaming, animation, and e-learning sector. To promote the development of the digital content industry in Thailand, Thailand’s National Software Industry Promotion Agency SIPA has established a Digital Content Centre in Bangkok with an area of 1,000 square metres comprising meeting rooms, sound and editing studios, motion capture technology, and all the latest software. This space serves as an incubator for the growing
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Thai digital content industry. Thai animation and gaming are among the most thriving sectors in the Thai digital content arena.
The growth in these sectors is supported by an increasingly diverse educational infrastructure, government assistance through relevant agencies, and projects designed to spur innovation and creativity. For example, the Thai government has expressed its intention to attain a leading position in the computer games, mobile games and animation sectors and support the sector’s developments. In fact, the Thai gaming industry is already running well with the government’s support under the national IT plan through various forms of contributions and facilitations. For instance, the government’s Software Industry Promotion Agency (SIPA) was established to assist the country, among other things, to become a leader in the Asian animation and gaming industries. Moreover, Thailand is setting itself up to become a low-cost production hub for high quality animation in Asia and is promoting itself as an alternative outsourcing destination for Hollywood and European animation projects. Thailand’s emerging gaming sector is also supported by diverse educational infrastructure. Universities and colleges in Thailand offer undergraduate and graduate degrees in animation or gaming. Additionally, vocational colleges offer digital content-related programmes in computer graphics. The number of graduates in these fields has been rising quickly.
The animation market in Thailand is divided into seven sub-sectors: TV animation, animation character license fees, VCD/DVD animation, film animation, mobile animation, visual effects for television commercials, and post production. Thailand is considered as one of the leading animation outsourced service providers. Many Thai visual effects and animation studios are behind the success of well-known Hollywood animations, such as Frozen and One Piece Film Gold. There are also many famous local animations, such as Yak: The Giant King, Shelldon, Bua Tong, Khan Kluay and Khun Tong Dang.
Thai companies such as Anya, Magic Software, Kanchorn, Monk Studio, TIGA and Kantana are among those driving progress in the software animation sector. The industry’s market value was estimated at US$ 117 million (EUR 95.2 million) in 2017.
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The gaming market consists of six sub-sectors: online games, mobile/tablet games, handheld games, PC games, arcade games and game character licenses. Gaming consumption in Thailand has shown a double-digit growth in 2017, especially in the IP owned segment, driven by an increasing number of local game developers and the growth of the mobile game industry. The industry was forecasted to reach US$ 375 million (EUR 305 million) in 2017. Mobile game revenue in Thailand, in particular, is expected to grow as the country’s smartphone penetration increases, and 49% of mobile gamers spend their money on mobile games. Revenue from mobile games was around EUR 81.4 million in 2014. In 2017, the revenues reached US$ 157 million (EUR 127.7 million), according to Statista, and US$ 275 million (EUR 223.7 million), based on Newzoo statistics.104 Moreover, Thailand is also becoming a major hub for gaming industry in terms of game products as various global leading companies outsource their production to Thai game studios. Regionally, Thailand ranks second, after Singapore, for the number of developers engaged in the gaming industry. Key players in gaming industry are: Pigsss Games, Novaleaf, Garena, Asiasoft, Debuz, Kira Games, Extend Interactive, Corecell Technology, Mad, Sinoze.
Distributor, Importer and Licensing Agent 71% Outsourced Service Provider 5%
IP Owner 24%
Figure 25: Thailand’s forecasted game market value, 2017 Source: Thailand’s Board of Investments (2015)
104 Allcorrect Game Localisation (2018). https://allcorrectgames.com/insights/mobile-game-market-index/thailand/
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The e-learning market consists of learning management systems, content and operation & services.105 Although relatively small, the sector is likely to post robust growth as the government embraces its digitalisation plans and plans to develop a digitally-savvy workforce.
Industry Threats
Although there are strong indicators to suggest the continued expansion of the software market, the industry is still facing challenges, such as the exploding amount of pirated software, cybersecurity threats, the country’s large gap in digital divide, and the slow adoption of software solutions among SMEs, which could limit the software adoption rates. European companies can also be affected by the Buy Thai First campaigns, which can persuade local SMEs to buy Thai- developed software.
In particular, the software piracy represents a significant issue for the Thai IT industry. Worldwide, Thailand is ranked among countries with the highest risk for piracy issues. According to the Business Software Alliance (BSA), the piracy rate in 2015 was 69%, one of the higher rates in the Asia Pacific region and down just 2 percentage points since 2013. The rate of progress made on fighting piracy has been slower than anticipated by the government.106 The lack of enforcement of copyright laws has led knowledgeable industry observers to conclude that most software installed on personal computers in the country has been obtained illegally. Piracy issues influence individuals, companies, as well as government incomes in several ways: firstly, legitimate purveyors of software lose revenue due to lost sales, therefore Thailand is missing out on tax revenues, and individual programmers lose motivation in creating new software programmes and intellectual properties, knowing that their work is most likely going to be pirated.107 Piracy in Thailand seems to be more a problem of enforcement rather than a lack of legal provision. However, raids are increasingly used to identify and stop piracy among local enterprises. For example, Autodesk software represents a very commonly pirated application and therefore many piracy issues are being reported in the manufacturing and construction industries.
105 BOI (2015).http://www.boi.go.th/index.php?page=pdf_page&menu_id=100 106 Business Software Alliance (2016).http://globalstudy.bsa.org/2016/downloads/studies/BSA_GSS_US.pdf 107 Charoen, D. (2013). International Journal of Social, Behavioral, Educational, Economic, Business and Industrial Engineering, 7 (6).
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The issue of pirated software remains a serious inhibitor on spending growth even in the high spending verticals – particularly in the manufacturing sector.
Another challenge is the fact that cyber threats pose a serious problem for the software sector in Thailand. Antivirus software giant Symantec ranked Thailand as the 28th most risk-prone market in 2014, citing healthcare facilities, educational institutions and public companies as frequent targets. Meanwhile, Netcraft announced in May 2014 that almost 100 Thai government websites were hacked and used to serve malware in April 2014. Netcraft claimed more than 500 distinct attacks were launched from the infected websites, representing about 85% of global government- hosted malware. Websites attacked included Royal Thai Police websites and military websites.108 International cooperation will be important in strengthening Thailand’s capacity to combat cyber threats and benefit the region as a whole.
According to the economic crime police, the high level of illegal software in Thailand is the link between pirated software and cyber criminals.109 Less reputable computer manufacturers and retailers may use counterfeit copies of popular software products to build machines more cheaply to increase their profit margins and the malware, embedded in counterfeit software, is engineered to spy on users and conduct denial-of-service attacks, including stealing personal information, locking the PC, using PC to send spam, or downloading other malicious software without notice and consent.110 Although cybercrime poses significant threats, it also opens up opportunities for security software demand.
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 powerful end-to-end Internet technology social network solutions. The company offers open source technology, network solutions, technology development and applications.
108 Netcraft (2014). http://news.netcraft.com/archives/2014/05/06/thai-government-websites-infested-with-malware.html 109 The Nation (2016).http://www.nationmultimedia.com/business/Pirated-software-contributes-to-cybercrime-risks-i-30279982.html 110 Symantec (2016). https://www.symantec.com/content/dam/symantec/docs/reports/istr-21-2016-en.pdf
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Digital Mind Co. was established in 2003 as a software company that develops custom software applications and integrates systems for client needs.
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. It is also targeting the cloud computing opportunity. In March 2015, it announced its full-year strategy to achieve 10% sales growth to THB 5.5 billion (EUR 142.4 million) by targeting growing demand for big data and cloud solutions from enterprises looking to increase their competitiveness when expanding into new, opening markets of the ASEAN Economic Community.
ThaiGerTec (TGT). Established in Thailand in 2005 with only 5 people, this Thai-German company has grown in leaps, and is currently employing around 60 software and hardware specialists. The company is known for its automotive proficiency and specialisation in designing high-performance software for advanced, high-end cars. For example, the BMW’s BMWi electric vehicle series, all contain main control units developed with the help of TGT. Delivering innovative products and solutions to a primarily European market, the company serves high-end customers, such as Siemens and BMW Munich. Consisting of mostly Thai employees, the company has seen steady growth (30% in 2016). 75% of the company’s services consist of Research and Development (R&D) for clients, while 25% is devoted to developing in-house tools and internal R&D. TGT’s primary business consists of verifying and creating high-precision systems to validate the embedded software in vehicle driving units, to ensure that the software not only meets industry standards but is also robust enough for the vehicle to ultimately be launched in the market. Engaged in developing safety-critical components, that need to be 100% reliable, TGT is one of the very few companies, based in Thailand to offer such services. The company is looking to explore other ASEAN markets. In the next 2-3 years, the company is also planning to expand its team by 60%-100%, to meet the growing need for such niche services.
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3.4.2 EU Entry Opportunities
In the past, typical Thai IT export products were generally constrained within the IT peripherals category, such as monitors, printers, keyboards and hard disk drives. Many foreign producers have established their assembly operations in Thailand to tap low-end product manufacturing and the Thai market.111 More recently, however, the Board of Investments (BOI) has opened up new venues and introduced specific investment promotions for IT activities, such as software. 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. The BOI has identified the following areas as potential opportunities for foreign investment:
▪ Enterprise software;
▪ Animation, cartoon & character;
▪ Computer-Generated Imagery (CGI);
▪ Web-based applications and cloud computing;
▪ Interactive Application;
▪ Games, such as Windows-based, mobile platform, console, PDA, online games, massive multi-player online games (MMOG);
▪ Wireless location-based service content;
▪ Visual effects;
▪ Multimedia video conferencing application;
▪ E-learning content via broadband and multimedia;
▪ Embedded software.
111 Mitsuhiro Kagami, Masatsugu, EmanueleGiovannetti (2004), “Information Technology Policy and the Digital Divide. Lessons for Developing Countries”.
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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 rise by more than 1,600% to the value of US$ 973.3 million (EUR 791.8 million) by 2020, with more than 400 million connected devices in about 3 years’ time. In addition, over 60% of organisations in Thailand have expressed interest in IoT investments. As a result, possibilities for IoT segment are significant, both in IoT equipment and software production.
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. With IDC’s forecasts that three-quarters of the larger Thai firms will have secured customised cyber threat analysis services by 2018, demand for IT security solutions is high. 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.
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, which are seeking to
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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.
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 the Acumatica’s full Thai-language version of enterprise resource planning cloud system.
Thai consumers are also intensive buyers of video games. Gaming consumption in Thailand has shown a double-digit growth in 2017 and the industry was forecasted to reach the value of US$ 357 million (EUR 290.4 million). 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.
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., the company 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.112
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. Currently, the company has a variety of projects, which are using Microsoft Azure and MVC 5. It also provides eLearning content, primarily in sales and management.113
Manao Software
Manao Software is a Danish custom software development outsourcing company, located in Chiang Mai, Thailand. As a Microsoft Gold Certified Partner, it specializes 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.
112AD System Asia (2016).http://www.adsystemasia.com/software-house-thailand 113RawDevelop (2016).http://www.rawdevelop.com/
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Figure 26: Manao Software office in Chiang Mai Source: Manao Software
Founded in Denmark in 2004 and under the name of Software Consult, the company has 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. While founded with just one person, Manao Software now employs over 44 people and has plans to expand in the immediate future. Before 2014, Software Consult remained the company that local Danish clients connected with, while clients from other countries dealt with Manao Software. Software Consult, however, has been converted since then to Manao Software ApS in order to streamline the company brand.
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. With the growth of the cloud-based services in South East Asia, SAP has doubled its local workforce in Thailand since 2014, in order to capitalise on these new opportunities. In addition to its range of solutions
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for business processes, the company has also introduced private cloud service in Thailand in 2016, with data servers hosted in the country. In 2017, SAP Thailand has been named Best Employer in the Aon Best Employers – Thailand 2017 Awards.
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3.5 Telecommunications Equipment
3.5.1 Market Overview
Overall, the Thai handset market has grown by 2% to 22.4 million units in 2016.114 The local smartphone market has already reached a mature stage as the smartphone has become a must- have device in the digital era. Thailand’s smartphone market penetration is expected to grow at the same pace as last year’s 2-3% to reach 25 million units in 2017. The handset replacement cycle is expected to be faster with Thais replacing their mobile phones every 10 months, compared to 12-15 months in 2016.
Mobile subscriptions have more than doubled over the past six years and penetration has stabilised at around 135% in 2017.115 Such high rates of penetration and proliferation of telecom software has put the market in a state where branding and innovative hardware will most likely be key determinants of market entry and success.
Middle to high-end markets are estimated to grow faster than the entry smartphone market due to consumer preferences for superior user experience, faster connection and high-end specifications.
The weak economy and early adoption of 4G are factors indicating Thailand’s smartphone market is maturing at a rapid pace, thus squeezing out new market retailers and making existing players increase competition to defend market shares.
Smartphones are becoming an increasingly ubiquitous part of daily life in Thailand. There are currently 32 smartphone brands available in Thailand, but continued consolidation over the next few years should result in less than10 survivors in the local market.
114 https://www.bangkokpost.com/tech/local-news/1176725/fierce-competition-takes-heavy-toll-on-smartphone-market 115 https://www.telenor.com/wp-content/uploads/2013/09/04_CMD_2013_dtac_FINAL.pdf
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Popular smartphone brands include Apple, Samsung, Sony, Asus, Huawei, Lenovo, Microsoft, Vivo, Wiko, Oppo, and Xiaomi. Oxford Business Group estimates that Apple and Samsung will have had a combined market share of 60% in the smartphone segment in 2016.116
Among a population of 68 million people, Thailand currently has 98 million mobile connections, of which 85.5% are prepaid.117 Smartphone penetration is at 66.7%, higher than Indonesia’s 38.1% and Malaysia’s 61.4%. Approximately 22.4 million units were sold in Thailand alone in 2016, and Thailand was seen as the second largest market for smartphones in South East Asia after Indonesia (see section ‘5.3 Useful Statistics’ for more information on exports/imports). It is estimated that almost all handsets in use in Thailand will be smartphones by 2018.118
Compared to its neighbours, Thais are also very active users of their mobile phones: Thais spend an average of 160 minutes per day on their smartphones, the second-highest level in the region. This is compared to 187 minutes in Malaysia, 140 minutes in the Philippines and 129 minutes in Indonesia.
The router and Ethernet switch market performed very well in Asia/Pacific in the 4th quarter of 2015 and increased by a solid 10.2% year over year, carried mainly by Singapore (up 32% year over year) and South Korea (up 19.7% year over year). For the full year 2015, Asia/Pacific rose by 4.8%.119 As the Universal Mobile Telecommunication System (UMTS) mobile communications market in Thailand is undergoing rapid development, heavy data services, such as online gaming and video streaming, are seeing strong growth and demand. Meanwhile, the development of new services requires the Internet core network to have the capability to support more services and more flexible quality of service.
Internet Protocol Television’s (IPTV) future looks promising thanks to limited frequency resources and a shortage of satellite transponder capacity. 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,
116 Oxford Business Group (2016). http://www.oxfordbusinessgroup.com/thailand-2016/telecoms-it 117 http://ttid.nbtc.go.th/internet_db.html 118 SettapongMalisuwan and WassanaKaewphanuekrungsi (2015). https://www.researchgate.net/publication/298710845_ANALYSIS_OF_MOBILE_TELECOMMUNICATIONS_MARKET_IN_THAILAND 119 IDC (2016).http://www.idc.com/getdoc.jsp?containerId=prUS41061316
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limited coverage and a lack of quality programming. Despite the IPTV market doubling in size from 2012 to 2013 to THB 3 billion (EUR 77.6 million), IPTV faces major challenges from satellite and cable TV operators as well as broadcast TV, which is fast evolving and improving.
SiS Distribution (Thailand) Public Co., Ltd. (SiS) is one of Thailand's leading IT equipment distributors: http://www3.sisthai.com/sis/page/xpage.php
The main distributors of telecommunication equipment in Thailand consist of Solomon Technology Thailand Co., Ltd., Total Access Communication Public Co Ltd., True Corporation Pcl, Hutchison Telecommunications (Thailand) Ltd., Pearsala Group, Samart Corporation Public Co. Ltd., Xenexx, Siam Tecno Trader, Planetville Co. Ltd. Please see below table for more detail on Thailand’s major telecommunication equipment distributors.
Company Profile Website
IPTV Thailand IPTV Thailand is the leading provider of IPTV utilizing http://www.iptvthailand.tv the Internet network to deliver Live TV channels to customers all over the world.
Loxley Public Loxley Public Company Limited is the leader in http://www.loxley.co.th Company Limited technology and commerce in Thailand. The company has 6 business groups: ICT business group, Technology business group, Projects business group, Trading business group, Services business group, and Joint Venture business group.
The ICT business group is divided into two sub-groups Telecommunications (incl. telecommunication equipment distribution), and Computer products.
Notebook This is a distributor that imports and exports
(Thailand) Co Ltd IT equipment including smartphones.
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Company Profile Website
SiS Distribution SiS Distribution Public Company Limited, founded in http://www3.sisthai.com Public Company 1998, is a leading distributor of IT equipment, including Limited computer, computer components, and smartphone. SiS has distributed IT equipment to over 4,500 dealers across Thailand.
Solomon The company distributes equipment, including routers http://www.solomon.co.th Technology to main Internet service providers such as ToT, CAT. Thailand Co., Ltd.
Table 12: List of major telecommunication equipment distributors in Thailand
Smartphones
Smartphone sales in Thailand hit a record of 22.4 million units in 2016, an increase of around 47% from 2014. In 2016, the Thai smartphone market was estimated to be worth THB 137 billion (EUR 3.55 billion).120
Affordability of smart phone devices was the key factor causing Thailand to some of the highest user rates per capita in South East Asia. Despite a high smartphone penetration rate of 67% in 2016, mostly driven by heavy handset subsidising from mobile operators, the Thai smartphone market is set to continue its growth in 2017 and 2018.121 This time, with the handsets priced above THB 16,600 (EUR 429) being the fastest-growing segment (growing 51.4% year-on-year in Q2 of 2017, and representing a 14.1% share of the total smartphone market).
The increasing popularity of online entertainment, shopping and social media, are expected to be the drivers for handset replacements – from operator branded low-end to well-known brands and larger screens.
120 http://www.nationmultimedia.com/detail/Corporate/30294230 121 http://www.weconnectthailand.com/news/thailands-smartphone-demand-continues/
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In 2017, the smartphone players have shifted consumer preference for higher-spec handsets from the low-end ones that were heavily promoted by the operators’ two-year campaign of shifting subscribers from 2G to 3G, followed by growing adoption of 4G. 2G subscriber base now accounts for less than 1%, nationwide.122 As operators are seeking ways to retain their subscriber base, partnerships between smartphone vendors and operators have increased. As such, smartphone shipments (excluding operator house-brands) through operator channels have more than doubled in 2017 over 2016.
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%).123
34,4%
18,7% 15,4% 11,3% 10,3% 9,8%
Samsung OPPO Huawei vivo TRUE Others
Figure 27: Top 5 smartphone brands in Thailand, 2017 Source: IDC 2017
In 2017, global and Chinese brands ramped up their activities in Thailand. The top 4 players – Samsung, OPPO, Huawei and vivo – sustained their aggressive marketing efforts while letting their more affordable low-end and mid-range models drive up their volumes. Meanwhile, True continued to bundle its smartphone with call/data plans. New players HMD (Nokia) and Xiaomi have also entered the market, both playing mainly in the low-end space.124
With higher 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 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,
122 https://www.idc.com/getdoc.jsp?containerId=prAP43246017 123 https://www.idc.com/getdoc.jsp?containerId=prAP43246017 & IDC 2017 124 https://www.idc.com/getdoc.jsp?containerId=prAP43246017
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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, to name a few. Marketing activities have also ramped up at the beginning of 2017, in anticipation of a slower market.
The smartphone market is expected to continue growing, driven by replacement demand, especially in the mid-range space. This demand is spurred by trending features, such as thin bezels, 18:9 aspect ratio screens, dual cameras, and on-device Artificial Intelligence.
The table below shows the number of people who own a smartphone by age group and area in 2015:
Number of people owning smartphones Region and area No phone 1 phone 2 phones 3 phones
Whole kingdom 25,882,027 23,402,431 283,585 26,095 6-10 347,429 302,330 - 64 11-14 671,322 1,331,156 1,552 688 15 - 19 906,540 3,487,255 9,686 881 20 - 24 1,148,667 3,505,607 24,946 2,950 25 - 29 1,178,640 3,290,503 39,212 938 30 - 34 1,579,617 3,007,003 50,637 4,008 35 - 39 2,319,989 2,595,373 51,086 1,771 40 - 49 6,451,160 3,463,652 61,857 6,282 50 - 59 6,118,023 1,779,641 31,430 5,278 60 years and over 5,160,640 639,911 13,179 3,236 Municipal area 10,196,089 13,277,381 184,835 15,906 6-10 161,600 185,448 - 64 11-14 265,120 618,365 822 - 15 - 19 301,382 1,548,780 3,867 452 20 - 24 392,022 1,835,356 8,366 2,256 25 - 29 447,387 1,879,320 28,490 278 30 - 34 607,649 1,788,377 38,615 1,862 35 - 39 872,833 1,578,416 37,159 665 40 - 49 2,489,382 2,218,944 36,965 3,907 50 - 59 2,439,310 1,171,290 18,780 4,826 60 years and over 2,219,406 453,085 11,771 1,595
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Number of people owning smartphones Region and area No phone 1 phone 2 phones 3 phones
Non-Municipal area 15,685,937 10,125,050 98,750 10,190 6-10 185,830 116,881 - - 11-14 406,203 712,791 730 688 15 - 19 605,159 1,938,475 5,819 429 20 - 24 756,644 1,670,252 16,580 694 25 - 29 731,254 1,411,183 10,722 660 30 - 34 971,968 1,218,626 12,022 2,146 35 - 39 1,447,156 1,016,957 13,927 1,106 40 - 49 3,961,778 1,244,708 24,892 2,375 50 - 59 3,678,713 608,351 12,650 452 60 years and over 2,941,234 186,826 1,407 1,642 Table 13: Number of people owning smartphones by age group and area125
Competition in the Thai smartphone market has been increasing with the arrival of new Chinese smartphone brands and handset subsidy strategies by mobile operators.126 Thailand’s most competitive smart phone company, Samart, I-Mobile Pcl, decided to move away from this segment due to high investment costs and intense competition. Its mobile business was previously a major revenue generator for its parent company, Samart Corporation, accounting for 33% of total revenue. The company saw its mobile business revenue fall to only 20% in 2017. Samart I-Mobile, which has been renamed Samart Digitial Plc, has plans to transform its handset distribution business to become a digital solutions provider by 2020.
Pricing
The top three high-end smartphones are now Samsung Galaxy S7 edge, Samsung Galaxy S7 which became available on the Thai market from March 2016, and Apple iPhone 7, available from March 2017 with prices ranging from THB 30,500 (EUR 789) for the 128 GB version to THB 39,500 (EUR 1,022) for the 256 GB iPhone 7 Plus. The Galaxy S7 cost from THB 23,900 (EUR 612), whilst the S7 Edge was sold at from THB 26,900 (EUR 696) for the 32GB versions with three colour options of gold, silver or black.
125“The 2015 Household survey on the use of ICT”.National Statistical Office, Ministry of Information and Communication Technology. 126 Bangkok Post (2016).http://www.bangkokpost.com/tech/local-news/839728/smartphone-market-will-be-stale-following-rapid-growth
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Ultra-low-end (THB 3,300 or EUR 85) and low-end (THB 3,300 – 6,600 or EUR 85 – 170) smartphones collectively made up approximately 60% of Thailand’s smartphone market in Q2 of 2017, while mid-range smartphones (THB 6,600 – 13,000 or EUR 170 – 336) made up 33%, with this segment continuing to see growth, spurred by replacement demand.
Technology Available
With new features accompanying the launch of almost every new smartphone, such as biometric authentication options - fingerprint, smart voice (command) and "EyePrint ID” iris scan, consumers in Thailand are beginning to increasingly focus on quality over brand. A 2016 survey showed that high resolution camera phones, bigger screens and longer battery life are a few of the most valued specifications among Thai smartphone users.127 The survey also found that getting complementary stylus accessories was the top selling point for 35.5% of respondents. Some 29.6% were swayed by the nature of instalment plans on offer, while 21.2% were attracted by longer warranty periods. Another 13.7% want to purchase smartphones that are bundled with attractive tariff packages.
Despite the country's sluggish economy, the arrival of the 4G wireless network can be expected to stimulate consumer decisions to replace their smartphones.
Wearable Technology
Wearable devices are becoming increasingly popular in Thailand with some 200,000 basic wearable devices (45,000 of which were smart wearables) being shipped in the first half of 2016.128 Although the user penetration remains at 2%, the market segment is expected to become the next big thing in the Thai consumer IT market, thanks to the proliferation of smartphones and greater awareness of alternative lifestyles.
127 Survey conducted by M Vision via mobile app Doo ADs with 9,970 respondents in January 2016. http://www.bangkokpost.com/tech/local- news/853464/survey-smartphone-users-get-tech-savvy 128 http://www.nationmultimedia.com/detail/Corporate/30294230
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Anticipating the growth of wearables in Thailand, Apple has recently launched its first smart-watch in the Thai market in 2015.129 The Thai market, however, is considered to be price-sensitive and increasingly targeted by other Asian firms with cheaper alternatives. The price for the Apple Watch is currently available in three models. The least expensive is the plastic Sport edition from THB 13,500 (EUR 349) followed by the stainless-steel standard model from THB 20,500 (EUR 530). The highest priced smart watch available is the 18-karat rose gold Apple Watch Edition from THB 395,000 – 470,000 (EUR 10,223 – 12,164).
Routers
High-end router brands include Linksys, Asus, Juniper Networks, Alcatel-Lucent. Options of routers are MikroTik, Draytek, TP-Link, Tenda, Zyxel.
US-based Western Digital Corporation, producer of hard-disk drives, is set to increase its marketing in 2016 to build its brand in Thailand as a maker of digital lifestyle products. The company is ready to allocate its marketing budget to communicate to Thai consumers that Western Digital Corporation is no longer just a disk drive maker, but also offers products that serve a connected life.
Western Digital Corporation has launched the N600, N750, N900 and N900 Central series of home routers in Thailand, with prices ranging from THB 2,750 to 9,250 (EUR 71 to 239). The new routers are designed to serve lifestyles that require multiple Internet-connected devices such as Internet TV, smartphones, tablets and game consoles. The company selected Thailand as the first country in ASEAN for the home router products, citing prolific growth of smart devices and widespread fixed broadband. The routers will be available by mid-December 2016 through the authorised distributors Comseven, Eternal Asia Thailand, SIS Thailand, and Synnex Thailand.
129 Bangkok Post (2015).http://www.bangkokpost.com/tech/local-news/605208/apple-watch-to-launch-in-thailand-july-17
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The market for home wireless networking in Thailand is to grow by 15% to 20% this year, up from 480,000 units in 2011. Western Digital Corporation’s two hard-disk drive factories in Thailand are at Nava Nakorn Industrial Estate in PathumThani and Bang Pa-in in Ayutthaya.”130
The best routers now can provide good network speeds and range due to directional beamforming. Current top-end models use a technology called NitroQAM.131
One of the key manufacturers of routers is MikroTik, Tenda. MikroTik has a wide network of distributors worldwide as presented in the table below.
Company Location Website
ACUMEN Co., Ltd. Nonthaburi http://www.acumen.co.th/ APlus Global Network Control Co., Ltd. Nonthaburi http://www.aplusgnc.com/ As Your Wish Co., Ltd. Bangkok http://www.aywcorporation.com/
ATS Solution Co., Ltd. Bangkok http://www.atssolution.co.th/ Brightsight Solution Bangkok http://brightsight.co.th/network.html
CERTIFIED NETWORK CONSULTING Nonthaburi http://www.wifi4you.com (WiFi4You) CTV Cable Network Co., Ltd. Bangkok http://www.mikrotikconsult.com/?post_type=pr oduct Data In Motion Co., Ltd. Bangkok http://www.dataequipments.com/Products/Mik rotik Easy Network Bangkok http://www.easynetwork.co.th Easy Zone Co., Ltd Bangkok https://www.cloud- hotspot.com/en/index.php?shop=yes Freedomlin Bangkok http://www.freedomlin.com/ Global Mesh Co., Ltd. Bangkok http://gmesh.com/ KAP Engineering Service Co., Ltd. Lamlukka, http://www.kapes.biz/ Phathumthani Mertel System (Thailand) Ltd. Bangyai, Nonthaburi http://www.mertelsystem.com/ NCC Networks Bangkok http://nccnet.co.th/mikrotik/ NJ Network Co., Ltd. Bangkok http://www.corecasys.com/p-mikrotik.php
130 Bangkok Post (2012).http://www.bangkokpost.com/tech/world-updates/324743/wd-focuses-on-thailand-router-market 131 Letters from Thailand (2016).http://www.lettersfromthailand.com/buying-guide-10-best-wireless-routers-2016.html
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Company Location Website
RASPBERRY SOLUTION ,CO LTD Bangkok http://www.mikrotiknetwork.com/ S And S It Solution Co., Ltd. Suanluang http://www.wireless-guru.com/ S. K. INTERCOM Co., Ltd. Bangkok http://www.sk-intercom.com/ SAB Solutions Co., Ltd. Thungwatdon, http://www.sabs.co.th Sathorn, Bangkok Solomon Technology Thailand Co., Ltd. Nonthaburi http://www.solomon.co.th/ Speedplus Technology Supply Co., Ltd. Ayutthaya http://www.thaimikrotik.com/ SYS2U Bangkok http://sys2u.com/ SysNet Center Bangkok http://www.sysnetcenter.com/ WiLAN Technology Co., Ltd. PathumThani http://www.wilantech.com/ Wilnet Communications Bangkok http://wilnetc.com/products.html
Table 14: List of routers distributors of MikroTik in Thailand
IPTV Equipment
The IPTV services in Thailand are offered in alliance with IPTV platform developers and broadcast operators. Equipment is provided by private sector players, which are discussed below:
The latest two players in the sector are the 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 consist of ZTE, UTstarcom, Cascade, Microsoft, and Huawei.132
The Telephone Organisation of Thailand (TOT) announced the nationwide commercial launch of the ‘MeTV’ IPTV service in January 2013, after it had first been launched in October 2012. TOT Plc said that all its broadband customers with connection speeds of at least 6Mb/s could sign up for the IPTV service.133 The company expected revenues of THB 7 billion (EUR 181.2 million)
132 ZTE (2010). http://wwwen.zte.com.cn/endata/magazine/ztetechnologies/2010/no12/articles/201012/t20101215_196099.html 133 Fairfield, Jonathon, (2015). “TOT to Launch new IPTV Packages.”http://tech.thaivisa.com/tot-to-launch-new-iptv-packages/7134/
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from IPTV services by 2016, with a total of 1.5 million subscribers. This was more than the operator’s fixed broadband subscriber base of 1.41 million at the end of September 2012. TOT was charging a basic monthly fee of THB 150 (EUR 3.9) for access to 74 FTA channels, including 9 HD channels. Customers were able to add premium packages with additional channels.134
In November 2013, TOT was issued a 15-year licence by the broadcasting committee of the NBTC to operate as a broadcasting Network Facility Provider (NFP). TOT’s licence means it can utilise its 48 telecom-relay sites for terrestrial digital TV (DTT) broadcasting as ‘gap fillers’ in areas with weak TV signals.
In December 2010, Thai TV broadcaster MCOT launched a broadband TV service with the aim of signing up 100,000 subscribers by the end of 2011. The company was working with Playwork, a telecoms systems provider. They had co-invested around THB 500 million (EUR 12.9 million) to deliver Ving Broadband TV, offering up to 1,000 channels through a high-speed internet connection.
The government-owned Mass Communications Organisation of Thailand (MCOT) was corporatised as MCOT Public Company Limited in 2004. It was renamed MCOT Pcl and partly privatised in an Initial Public Offering (IPO) held later that year. The Ministry of Finance, which had previously held 100% equity in MCOT on behalf of the government, retained a 77% stake after the IPO. In accordance with Thai law, foreign investors could not hold more than 15% of the offering. Over time MCOT developed into a local media conglomerate.135
In November 2013, MCOT was issued with a 15-year licence by the broadcasting committee of the NBTC to operate as a broadcasting NFP. MCOT was licensed to manage its 31 transmission sites, which were being partly used for analogue TV broadcasting, under a plan to use its existing broadcasting towers for digital TV.
134 Evans, P. (2014). https://www.budde.com.au/Research/2014-Thailand-Telecoms-Mobile-Broadband-and-Forecasts 135 Ibid.
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Local Players
The section below provides some of the profiles of local players in the telecommunications equipment market.
Samart I-Mobile Plc is a Thai mobile phone producer. The company is one of the leading local mobile phone brands in Thailand. The company was founded in 1995 and has its headquarters in Nonthaburi. It has its own shop, called “i-mobile by SAMART” to distribute IT devices, mobile phones, accessories, SIM cards, and provide after sales services, nationwide. In 2014, it had the fourth largest mobile phones market share in Thailand. 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.
Japan's Sony Corp began production in September 2015 at its new wholly-owned plant in Thailand, which aims to make 600,000 to 700,000 premium smartphones in the first year.136 The start-up of its first overseas mobile phone plant in two decades is part of Sony's strategy to turn around its loss-making mobile phone business by prioritising profits over volume and shifting its focus to high-end smartphones.
3.5.2 EU Entry Opportunities
Wearables are becoming a new, trendy product in Thailand, with the revenue expected to reach US$ 29 million (EUR 23.6 million) in 2018.137 Although some of the more advanced wearables may be out of reach to Thai consumers, there is significant scope for 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.
Specifically, regarding the smartphone market, there are already 32 smartphone brands on the Thai market and many more smartphone models available, thereby making the Thai market relatively saturated. With the tablet market stagnating as a result of longer
136 Reuters (2015). http://www.reuters.com/article/thailand-sony-idUSL3N12Z5PA20151105 137 https://www.statista.com/outlook/319/126/wearables/thailand#
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replacement cycles this market is also in flux, especially given the increasing tendency of large-screen phablets penetrating into the market. With Chinese manufacturers driving down prices, and other brands’ recent willingness to offer phones at heavily discounted rates to attract consumers to the new 4G network, 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. For instance, the French Lexibook, touting smartphones for kids, may possibly attract a niche consumer group within Thailand, especially given Thailand’s very high usage rate of their smartphones.138
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. In addition, the country is steadily moving away from 3G and towards 5G connectivity, which is likely to enable further equipment procurement and infrastructure projects.
The increasing popularity of online entertainment, shopping and social media, are also expected to be the drivers for handset replacements – from operator branded low-end to well-known brands and larger screens.
In 2017, the consumer preferences have shifted from low-end handsets to the higher- specification ones. The key driver for this shift is the cessation of the operators’ two-year campaign to promote the subscribers’ shift from 2G to 3G/4G connections by offering discounts on low-end mobile handsets. The higher-end smart phones are expected to post a healthy growth in demand.
138 https://www.lexibook.com/
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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, 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.139
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.
139 Europa, (2015). madb.europa.eu/madb/viewDoc
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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.
MitkoTik
Figure 28: MikroTik Wireless Solutions product offering (visualisation) Source: https://www.youtube.com/watch?v=2cym7j8BcJ0&feature=youtu.be
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 28 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. Over the period of 2010-2015, the country has made good progress on improving its telecommunications ecosystem, jumping by 18 places to 74th position on the ICT Development Index. The country has progressed in both use and access indices, but it particularly stands out for its achievements in mobile broadband.140 Mobile penetration is very high and remains the dominant form of communication in Thailand.
Figure 29: Thailand’s improvements on ICT Development Index, 2010-2015 Source: International Telecommunication Union (2015)
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%.141 The growth is expected to be driven by mobile segment, which represents
140 ITU (2015).http://www.itu.int/en/ITU-D/Statistics/Documents/publications/misr2015/MISR2015-w5.pdf 141 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
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over 70% of the total telecommunication services spending. In particular, the growth will be led by the mobile data services segment.
In terms of Thailand’s communication network, the country currently has 98 million mobile subscribers and there is a rapid trend in users shifting from feature phones to smartphones. While smartphone penetration rate was 66.7% in 2016, it is estimated that by 2018, almost all handsets in use will be smartphones. In addition, there are approximately 43.8 million internet users, with around 8 million broadband subscribers.142 These figures are increasing daily due to widespread availability of broadband and WiFi across all provinces.
Regarding technologies, which are used in mobile data services, the operators provide 2G and 3G services, which GSM, GPRS, EDGE, W0CDMA and HSPA+ technologies. 4G services with Long- term Evolution (LTE)143 are also growing strongly. Operators are additionally investing in advanced technologies, such as VoWIFI and 4G VoLTE.144 In February 2017, the country has also launched its first IoT network, which will offer 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.145 The regulator is also set to auction new spectrum in 2017-2018 to boost advanced data services, IoT capabilities and encourage 5G innovation. In April 2017, True Corp enlisted Ericsson to oversee what it hopes will be the country’s first 5G trial. The government hopes to roll-out the 5G network by 2020, with a commercial launch by 2022.
Internet Access
The Thai internet market has been on a growth path over the past few years. The demand for internet and internet-related services is beginning to increase, as evidenced by the expanding volume of international bandwidth. Network size, bandwidth usage and number of internet users are continuously increasing.
142 http://ttid.nbtc.go.th/internet_db.html 143 LTE is a standard for high-speed wireless communication for mobile phones and data terminals. 144 http://www.satprnews.com/2017/09/08/thailand-telecommunication-services-a-technology-driven-market/ 145 http://www.computerweekly.com/news/450412720/Thailand-to-roll-out-IoT-network-in-April-2017
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According to the US diagnostics company Ookla, the average broadband-internet speed in Thailand is ranked 8th in Asia and 53rd in the world. Mukdahan city has the fastest speed Internet (32.19 mbps), following by Sattahip (31.3 mbps) and HuaHin (25.4 mbps). Somewhat counter intuitively, Bangkok ranks only 17th with approximately 18.1 mbps.146
The number of Internet users has been increasing constantly since 2007: the user penetration jumped from 18.9% in 2007 (11,800,000 users) to 64% (43,873,732 users) in 2017.147
Thailand has witnessed recently a reasonably strong growth in fixed broadband market, although from a relatively small base. However, fixed broadband penetration remains low (8.01 million in 2017) mainly due to a limited number of fixed lines and the dominance of the mobile platform. The government has recently committed US$ 2.6 billion (EUR 2.1 billion) to expand the fibre optic network further in order to connect 95% of the country by 2020. Despite these initiatives, the fixed broadband is likely to grow slowly as the user preferences indicate tendencies for mobile platforms. Thailand’s fixed broadband subscriber market share is largely divided between True (39.4%), TTT&BB (34.5%) and TOT (19.9%). AIS Fibre is a rising star in the industry as it saw its market share rise from 0.7% in 2015 to 4.3% in 2016.148
According to the National Electronics and Computer Centre (NECTEC), there are 23 Internet Service Suppliers with direct links to the International Internet Gateways (IIG) and National Internet Exchanges (NIX) (see table below).
Name of ISP Website 1 ADC (Advanced Datanetwork Communications Co., Ltd.) http://www.adc.co.th 2 A-NET (ANET Co., Ltd.) http://www.anet.net.th/ 3 BeeNet (BB-Broadband Co., Ltd.) http://www.beenets.com 4 CAT-ISP (CAT Telecom Public Co., Ltd.) http://www.cat.net.th 5 CS LoxInfo (CS LoxInfo, Plc.) http://www.csloxinfo.com 6 CWN (ChomananWorldnet Co., Ltd.) http://www.cwn.net.th 7 E-Z Net http://www.eznet.co.th
146 Bangkok Post (2015).http://www.bangkokpost.com/tech/local-news/568859/thailand-Internet-8th-fastest-in-asia 147 http://ttid.nbtc.go.th/internet_db.html 148 DBS Vickers Securities (2017)
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Name of ISP Website 8 Far East Internet (Far East Internet Co., Ltd.) http://www.fareast.net.th 9 FTTH (Fiber To The Home Co., Ltd.) http://www.ftth.co.th 10 INET (Internet Thailand Public Company Limited) http://www.inet.co.th 11 ISSP (Internet Solution & Service Provider) http://www.isp-thailand.com 12 JI-NET (Jasmine Internet Company Limited) http://www.ji-net.com 13 KIRZ Internet (KIRZ Co., Ltd.) http://www.kirz.co.th 14 KSC (KSC Commercial Internet Co., Ltd.) http://www.ksc.net 15 OTARO (Otaro Co., Ltd.) http://www.otaro.co.th 16 PACIFIC INTERNET (Pacific Internet [Thailand] Limited) http://www.pacific.net.th 17 PROEN Internet (Proimage Engineering and Communication Co., Ltd.) http://www.proen.co.th 18 REACH http://www.reach.net.th 19 SAMART (Samart Infonet Co., Ltd.) http://www.samarts.com 20 TOT-ISP (TOT Public Company Limited) http://www.tot.co.th 21 True Internet (True Internet Co., Ltd.) http://www.trueInternet.co.th 22 TT & T (TT&T Public Company Limited) h ttp://www.ttt.co.th 23 World Web http://www.cat.net.th Table 15: List of Internet suppliers in Thailand having direct links to IIG and NIX Source: Charnsripinyo, C., & Roongroj,P. (2015) The Thai telecom market is changing quickly. 4G has been introduced and four major operators are competing for spectrum and customers: True Corporation, Advanced Info Service (AIS), Total Access Communication (DTAC), and Jasmine. In the short-term, telecoms must pay for their spectrum, and going out they will be developing their networks and building their customer bases. This is sure to be a challenge in terms of fund-raising and profitability, and it seems that creative solutions in terms of infrastructure sharing and financing are on the cards. The regulators will certainly be busy as companies fight for market share and customers. Throughout the process, consumers ware likely to benefit from the competition, added-value promotions and lower costs.
Mobile Services
Thailand’s mobile market is highly saturated and mature. It is also the leading segment of the telecommunications service industry. Market penetration has peaked in 2014 at 146% and has declined in the next three years to 132% in 2015, 128% in 2016, and 135% in 2017, due to market
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consolidation.149 Very slow growth is predicted up to 2022 as the market will be constrained from growth due to a saturated mobile subscriber market and strong local competition. Prepaid subscriptions account for around 85.5% of all mobile subscriptions.
Thais are also heavy data users, with the average data consumption of 4 GB per month, up from 2GB in 2015.150 The heavy usage of data has recently impacted upon the revenues of mobile service operators, who have seen continuous decline in voice usage. In 2017, Non-voice segment accounted for 61%, of mobile revenues, compared to 28% for voice.
Figure 30: Mobile revenues by segments (%), 2008-2017 Source: Thai Telecom Industry Database
The structure of Thailand’s mobile services is defined by Build, Transfer and Operate (BTO) agreements, under which all mobile services facilities, built by private investors, need to be transferred to the state-owned enterprises before the private investor is allowed to operate them and offer services to the public. All current private operators have previously negotiated the BTO agreements with the state-owned enterprises, namely, the Communications Authority of Thailand (CAT) and the Telecommunications Organisation of Thailand (TOT).
149 International Journal of Management (IJM).http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=6&IType=12 150 http://www.marketresearchthailand.com/thailands-telecom-sector-will-face-fierce-competition-in-2017/
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CAT and TOT are the dominant players in Thailand’s telecom network, where CAT provides the nation’s international telephony and TOT offers local and long-distance calls.
There are three main private mobile operators in Thailand, namely, the Advanced Info Service, DTAC and True Corporation (TRUE), with market shares of 46%, 27%, and 27%, respectively.
TRUE MOBILE 27%
ADVANC 46%
DTAC 27%
Figure 31: Thailand mobile subscriber market share, 2016 Source: DBS Vickers Securities (2017)
Between 2008-2013, TRUE had always been a distant number three in terms of revenue market share, mainly because it was the last player to enter the market. In June 2014, however, China Mobile agreed to buy 18% of TRUE. Leveraging on the strong financial support, TRUE started aiming for 33% of the market share. The company has succeeded growing its service revenue market share on the back of being the first to introduce 3G and 4G in Thailand (2012-2015), and aggressive handset subsidies (mainly in 2016). Most gains were made at the expense of DTAC, which has lagged behind its competitors in terms of capex and customer perception of the network quality.
Recently, mobile operators started facing increasing threat from Over the Top (OTT) services. In 2016-2017, several OTT services were launched in Thailand, signalling both the mass adoption of internet-based services and a marked increase in OTT off-net termination for mobile operators,
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or calls made with other networks.151 Local mobile operators have experienced a drop in messaging revenue as a direct result of OTT clients on smartphones.
To fight back, mobile operators are exploring opportunities for partnerships with OTT players to offer triple-play services, such as internet, telephone and TV through a single channel.
Meanwhile, policymakers are planning to enact policy measures to govern OTT operators, given the fact that internet-based services are rapidly pervading all segments of commerce and society, and affecting traditional industries. In Thailand, free OTT platforms include Line TV, YouTube, and some digital TV channels that broadcast their programmes via OTT platforms, such as channels 3, 7, 8, and Work-point channel. Paid OTT platforms include Netflix, iflix, Hollywood, HDTV, Primetime, AIS Play and TrueVisions Anywhere.152 The National Broadcasting and Telecommunications Commission (NBTC) notes that free OTT service providers in Thailand had earned combined advertising revenue of THB 2.16 billion (EUR 55.35 million) in 2016, 70% of which stemmed from YouTube. According to NBTC, the three most popular types of OTT content were mass content, such as cinema series; niche content including sport, cartoon and cuisine; and user-generated content, such as Facebook, YouTube and Instagram.
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 area is served by two fixed line operators: the TOT and TRUE. Local calls are not timed and carry a charge of THB 3 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.
The fixed voice subscriptions seem to be declining at a fast rate, indicating that mobile substitution and VoIP systems are in full flow. The decline in usage is driven by households, particularly those
151 https://www.pressreader.com/thailand/bangkok-post/20170313/281874413209818 152 https://www.pressreader.com/thailand/bangkok-post/20170313/281874413209818
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in rural and provincial areas, transitioning from fixed to mobile services. The market segment is predicted to decline further over the next five years with fixed telephone subscriptions declining from 7.4 million in 2008 to 5.7 million in 2014, and 3.64 million in 2017.153 Fixed line penetration rate in 2017 was only 5.38%, with metropolitan areas registering the rate of 12.37% and the provincial areas recording a marginal 3.23%.
Figure 32: Thailand fixed line subscribers, 2017 Source: NBTC
The main players in fixed voice telephone segment are True Corp, which also offers mobile services, and two state-owned enterprises, the Triple T Broadband, and TOT. Other, smaller market players include the CAT, which is also developing its ‘Hi-Net’ retail brand, and AIS, which also provides mobile services and deploys fibre service to over 250,000 homes.154
153 NBTC (2017). http://ttid.nbtc.go.th/mobile_db.html & International Journal of Management (2015).http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=6&IType=12 & http://ttid.nbtc.go.th/fixedline_db.html 154GSMA (2015).http://www.gsma.com/spectrum/wp-content/uploads/2015/05/Building-Thailands-Digital-Economy.-Full-Report.-ENG.- April2015.pdf
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Other players (TT&T & AIS), 1,3% TOT True 29,3% Corp 37,0%
Triple T Broadba nd 29,5% CAT Teleco m 2,9%
Figure 33: Thailand fixed line market share by competitor Source: GSMA (2015)
E-commerce Businesses
Thailand now has the fastest-growing e-commerce market in South East Asia. With the arrival of 3G/4G wireless communication networks and driven by the increase in online sales transactions through wireless handheld devices, the mobile commerce market is also emerging. Mobile commerce is steadily becoming the new, key channel for Internet transactions, thus, giving rise to various mobile trades of goods and services in new, online spaces, i.e. Facebook, Line and Instagram – channels, which are replacing the traditional hubs of online website purchases on a desktop computer.155
Thailand’s e-commerce market is expected to grow by 20% in 2017, and increase 16-fold over the period of 2015-2020. The country’s online retail business is expected to grow from US$ 1.9 billion (EUR 1.5 billion) in 2016 to US$ 11.1 billion (EUR 9.0 billion) in 2025.156
Mobile e-commerce remains the main channel to reach customers as 41% of total online purchases occur via smartphones. According to PwC, Thailand is also the largest online
155Malisuwan, Settapong et.al. (2015).http://www.iaeme.com/MasterAdmin/UploadFolder/IJM_06_12_002/IJM_06_12_002.pdf 156 http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/ASEAN-in-Focus-The-Thai-Consumer- Market/rp/en/1/1X000000/1X0A8YMK.htm & http://www.scmp.com/news/asia/southeast-asia/article/2123836/effects-digitalisation-thailand
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Customer-to-Customer (C2C) market in the world with an estimated 50% of online shoppers purchasing goods on social networks. Yet, cash on delivery still accounts for 70% of all payments.
With factors, such as 3G/4G connectivity, usage of social analytics, and smartphone penetration, expected to grow further, smartphones will take a pivotal role in providing the channel for online transactions,
Mobile Banking Transactions & Media Spending
With an increasing number of Thai people using smartphones and tablets, mobile banking transactions are becoming more popular due to their convenience and the fact that they enable users to access services more extensively. Online transactions for products and services, as well as online banking transactions can be carried out easily and securely. Several commercial banks have provided customers with more channels of services through the Internet and mobile phones regardless of time and location, e.g. funds transfer, balance inquiry, and bill payment.157
The rapid expansion of Internet usage and the proliferation of smartphones have also reshaped the modes of media spending. The highest media spending is now through the Internet, followed by TV and printing media, respectively.
The key drivers for such shifts are the expansion of 3G services in the 2.1 GHz band, and the subsequent rapid extension of coverage, as well as the changes in the behaviour of customers, who now adopt new network services sooner than expected.
PwC Thailand has forecasted that the growth trend of Thailand’s media and entertainment industry will strongly expand in the next five years. The industry’s spending is expected to reach US$ 13 billion (EUR 10.6 billion) by 2021, growing at a Compound Annual Growth Rate (CAGR) of 5.9% between 2017-2021.158
157Ibid. 158 PwC (2017). Thai Entertainment and Media Revenues to Reach US$ 13 Billion in 2021. https://www.pwc.com/th/en/press-room/press- release/2017/press-release-27-07-17-en.html
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As a result of rapid expansion of social networks, entertainment media and digital advertising in Thailand, there are now around 35 million Thai Facebook subscribers, 2 million Instagram subscribers, 4.5 million Twitter subscribers and 33 million Line users, according to Zocial Inc. These numbers are encouraging for companies wishing to create more new applications and content on mobile phones – a market segment, valued at around THB 1 billion (EUR 25.9 million).
Pricing Structure and Distribution Chain
License Fee for ICT Operators
According to the Telecommunication Business Act 2001 in Thailand, telecom providers must obtain their license from the National Broadcasting and Telecommunications Commission (NBTC) before starting their operations. There are three types of licenses:
Type 1: Telecom license for an operator without its own network;
Type 2: Telecom license for an operator with or without its own network but provides services targeting a segment or even several segments of the public;
Type 3: Telecom license for an operator with a network that provides services to the general public.
The license requires three types of fees: permission for license, renewal, and an annual fee.
License type Permission for license fee (THB) Renewal license fee (THB)
1 5,000 - 2 not own network 5,000 - 2 own network 10,000 - 3 10,000 10,000 Table 16: Permission for license and renewal license fees in Thailand 159
159The National Broadcasting and Telecommunications Commission (2015). https://www.nbtc.go.th
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Revenue of the company Apply for any license type Revenue share (%) (THB million) 0 – 100 0.25 100 - 500 0.50 500 – 1,000 1.0 above 1,000 1.5 Table 17: Thailand telecommunication annual fee160
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 also Thailand’s second largest broadband operator (after True) with over 2 million subscribers.
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.
In 2015, Jasmine, together with the Thailand’s largest fully-integrated telecoms service provider True Corp, won the second auction for two 4G spectrum licenses valued at US$ 4.2 billion (EUR 3.4 billion), raising expectations that the entry of the fourth operator would intensify competition in the mobile market.161 However, the company lost its 4G license in 2016 after missing the deadline for an initial payment towards the US$ 2.1 billion (EUR 1.7 billion) fee, thus, ending Jasmine’s hopes of entering Thailand’s competitive mobile market. The company, nevertheless, remains a serious local player in the broadband service provision market.
160The National Broadcasting and Telecommunications Commission (2015). https://www.nbtc.go.th 161 https://www.reuters.com/article/thailand-telecoms-4g/update-1-thailands-true-jasmine-win-4-2-billion-4g-auction-idUSL3N14752C20151218
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Advanced Info Service Pcl (AIS) is the 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. The company is involved in the operation of cellular networks in the frequencies of 900 MHz, 1,800 MHz, and 2.1 GHz.
Most recently, after Jasmine International’s loss of its 4G licence in 2016, the 15-year licence to run an LTE network on 900 MHz spectrum was awarded to Advanced Wireless Network (AWN), a subsidiary of AIS.162 Although the company is a latecomer among major players to provide 4G services (as of January 2016, it was the only major Thai operator not to have 4G services among three major private mobile service players), AIS has taken the initiative in 2016 to roll out the country’s first commercial LTE Advanced Service (4.5G), ahead of its rivals.163 The company is planning to spend THB 20 billion (EUR 517.7 million) for the full-scale roll-out of its 4.5G network nationwide after debuting the service in 42 provinces.
True Corp (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.
In 2015, True Corp, in tandem with Jasmine International, won the auction for two 4G spectrum licenses valued at US$ 4.2 billion (EUR 3.4 billion).164 Having built on the initial momentum, the company is currently the market leader for 4G services, with over 2 million subscribers.
162 https://www.globaltelecomsbusiness.com/article/b11vy76829h9yq/ais-wins-thai-spectrum-as-jasmine-fined 163 https://www.bangkokpost.com/tech/local-news/840888/ais-strikes-strategic-blow-with-4-5g-debut 164 https://www.reuters.com/article/thailand-telecoms-4g/update-1-thailands-true-jasmine-win-4-2-billion-4g-auction-idUSL3N14752C20151218
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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, 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
As main mobile operators are adopting aggressive tactics to maintain their market share and move 2G subscribers to 3G/4G networks, new opportunities are opening up for companies. There are avenues for companies to bundle their products together with the services of operators, as a way of promoting both companies to Thai customers. For example, in early 2016, BitDefender announced its plans to partner with mobile phone hardware companies, such as Oppo, to offer bundled packages to Thai customers as part of their strategy to increase market share. The company is also exploring the option to bundle their security services with internet service in the Thai market. TRUE has also been bundling its own mobile phones with data plans to increase the competitiveness of its offering.
3G technology is reaching its limits in Thailand, and subscriptions are beginning to be cannibalised by consumers adopting 4G. Moreover, the regulator is set to auction new spectrum in 2017-2018 to boost services and 5G innovation. As a result, although the opportunities for 3G services may be contracting, 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.
Thailand 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).
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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.
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 2016, it has also signed a 5-year contract with the Telenor Group to design and implement the 4G LTE network and transform existing 2G and 3G networks in Thailand, Bangladesh and Myanmar. The contract encompasses areas of software, hardware and services development.165
Vodafone Group
Vodafone Group plc is a British 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.
165 Ericsson (2016). http://www.ericssonhistory.com/places/asien/Thailand/
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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.
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 has also rolled out its i-RoamFREE plan to Thailand, which gives users unlimited international roaming. Vodafone i-RoamFree is now available in 20 countries, including UAE, USA, UK, Singapore, Malaysia, Thailand, and others.
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.
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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 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 34: 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.166 Import licenses are required for restricted items, many of these include raw materials, 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
166 http://en.customs.go.th/cont_strc_simple.php?lang=en&left_menu=menu_prohibited_restricted_items¤t_id=14223132414d505f4b
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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.167
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:168
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.
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)
167 https://www.wto.org/english/tratop_e/inftec_e/itaintro_e.htm 168 http://en.customs.go.th/content.php?lang=en&ini_content=import_export_151006_01
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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 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:
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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 would announce 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 51,765).
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 newly-formed Government Committee for Cyber-Security under the proposed Cybersecurity Act and the newly-revised Computer Crimes Act. The following summary, sourced from John Fotiadis of Atherton Co., Ltd,169 describes the legal framework of the ICT landscape in Thailand:
169
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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.
New in 2017 are 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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Cryptocurrency
Presently, Thailand has no definitive law governing cryptocurrency such as Bitcoin.
Fintech
Thailand has no specific laws addressing financial technologies (‘fintech’) such as peer-to-peer lending, crowdfunding, etc. Both the Bank of Thailand (BOT) and the Thai Securities and Exchange Commission (SEC) have initiated a regulatory ‘sandbox’ for interested operators. This affords operators a safe environment for testing fintech products and services while cooperating with BOT and SEC to develop how future regulation may be implemented.
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).
As part of the Thailand 4.0 laws, the NBTA is being amended. It will consolidate the two NBTC boards (one for Broadcasting and one for Telecom) into a single 7-person board. The new NBTA amendment also places the NBTC under the supervision of the Ministry of Digital Economy and Society, once again centralising control.
The NBTA amendment will also allocate funding from telecom auctions and licensing fees to a special fund from which the NBTC can draw to promote its agenda. The intention is to expedite future spectrum auctions by financially enabling the NBTC to pay compensation to existing licensees in order for the NBTC to reacquire frequencies. The NBTC contemplates doing precisely this in order to reacquire 2,600 MHz spectrum rights previously licensed to MCOT so as to expedite a 5G auction in 2017 — making Thailand the first ASEAN nation to adopt 5G.
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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 51,765) 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 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.
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Digital Crimes
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.
Changes in ISP Liability
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.
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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 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 for 43 restricted businesses in three categories.170
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
170 Deloitte (2015).http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-thailandguide-2015.pdf
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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.171
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.
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.
171 Deloitte (2015).http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-thailandguide-2015.pdf
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▪ 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.
▪ 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 142) per million baht 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
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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 51) per million baht 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’ 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.
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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 10-20), depending on exact chop specifications.
The Thai Board of Investment offers useful guidelines in English to navigate the company registration process (http://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 18: Required steps for registering business in Thailand Source: Doing Business and Investing in Thailand Guide
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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).172
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:
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.
172 http://www.boi.go.th/newboi/en/index/
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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.
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%).
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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 25,882);
▪ 25% on net profits of THB 1 to 3 million (EUR 25,882 to 77,647)
▪ 30% on net profits above THB 3 million (EUR 77,647).
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.
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
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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.173,174,175
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.
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
173 ASEAN Briefing (2015). http://www.aseanbriefing.com/news/2015/08/19/thailands-new-investment-promotion-policies-open-a-new-door-to- foreign-investors.html 174 Thailand Board of Investment (2015).http://www.boi.go.th/upload/content/Korea%20Road%20show%202015%20as%20of%2020042015%20ver%20Final_updated_64404.pdf 175 Thailand Board of Investment (2015).https://www.tresor.economie.gouv.fr/File/410048
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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.176
Tariffs
Thailand has a standard tariff regime for electronics as a WTO member, as well as offering lower rates for operations in the Customs Department free zones that were created in 2000.177 Thailand had 84 customs free zones in 2014, which accounted for 9.3% of total exports, with major product categories including packaging and electronics. According to the International Trade Centre’s latest available data, the average tariff faced for importers of computer hardware is 4.6%, slightly lower than the figure of 5.0% for components. Telecommunications and AV devices were treated less favourably, with respective average tariffs faced of 5.1% and 11.4%.178 The ASEAN Economic Community will have a downward impact on regional tariffs, with tariffs on hardware and software products reduced to 0% across virtually all ASEAN countries. ASEAN is also working towards the elimination of non-tariff barriers.
176 BOI (2015).http://www.boi.go.th/index.php?page=pdf_page&menu_id=100 177 WTO (2016).https://www.wto.org/english/thewto_e/countries_e/thailand_e.htm 178 ITC (2013). https://www.investmentmap.org/prioritySector.aspx
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5.3 Useful Statistics
Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016 World 201,452 181,977 175,104 157,325 134,054 China 64,590 66,134 59,212 47,602 45,854 Viet Nam 50,415 38,474 37,840 28,169 15,317 Indonesia 17,987 18,918 15,114 14,547 13,687 Japan 16,512 12,864 13,534 16,481 12,287 Philippines 4,431 2,852 5,436 4,312 5,750 Thailand 5,277 3,966 2,897 3,403 5,673 Taipei, Chinese 5,732 4,633 4,727 3,954 5,033 United States of 6,730 4,113 4,797 5,102 4,902 America Malaysia 10,314 9,591 10,790 6,662 4,869 Germany 2,370 2,699 1,099 5,056 3,702 Table 19: 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 2012 in 2013 in 2014 in 2015 in 2016 World 395,652 884,598 664,345 624,086 334,758 Germany 27,682 87,207 187,598 210,678 96,880 United States of 86,539 246,993 183,861 172,049 61,315 America Japan 103,269 215,902 112,037 84,767 58,488 Netherlands 49,157 164,209 87,139 60,014 58,420 Hong Kong, China 7,418 17,150 20,055 13,745 13,481 United Arab Emirates 1,162 2,350 3,641 7,952 6,604 Korea, Republic of 10,770 8,214 4,641 5,776 6,295
Singapore 10,512 8,424 8,543 7,112 4,242
China 12,409 10,492 3,756 2,184 3,473 Australia 8,980 21,639 9,575 9,224 3,442 Table 20: 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 2012 in 2013 in 2014 in 2015 in 2016 World 932,976 714,947 520,182 623,311 599,946 China 916,976 705,547 510,769 615,793 591,622 Japan 2,933 4,507 3,738 2,222 3,688 Malaysia 214 234 497 620 1,219 United States of 910 722 1,778 779 929 America Germany 164 168 363 306 643 Singapore 564 1,079 1,035 255 392 Hong Kong, China 2,584 1,279 266 644 361
Taipei, Chinese 5,173 400 829 717 277
United Kingdom 262 97 230 973 196 Czech Republic 10 3 13 0 103 Table 21: 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 2012 in 2013 in 2014 in 2015 in 2016 World 133,315 58,864 75,720 69,903 74,074 Malaysia 167 7,991 31,839 43,071 38,172 Singapore 943 1,361 11,553 2,475 10,904 Myanmar 18,256 15,120 12,458 10,569 10,337 Lao People's 72,707 8,319 6,633 7,600 6,272 Democratic Republic Cambodia 18,179 11,624 7,306 3,295 4,401 Australia 20 18 13 21 2,207 Hong Kong, China 4,453 1,105 507 692 623
China 343 4,984 91 88 430
Japan 112 146 152 129 163 Taipei, Chinese 11 7 20 5 123 Table 22: 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 2012 in 2013 in 2014 in 2015 in 2016 World 1,501,142 1,275,096 1,078,025 924,570 804,256 China 1,471,431 1,209,580 988,982 862,422 754,189 Viet Nam 1,564 37,736 62,523 45,577 34,065 Japan 5,757 5,397 4,402 2,562 4,018 Malaysia 1,067 566 2,175 2,054 2,764 United States of 1,572 2,168 3,3 2,211 1,867 America Germany 280 737 659 462 1,422 France 237 197 138 165 894 United Kingdom 323 533 2,971 1,324 769 Hong Kong, China 4,208 2,899 1,420 1,215 701 Singapore 769 1,334 1,517 603 694 Table 23: Imports of Multimedia portable players - audio, video, software downloading (HS Code 84713090) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016 World 189,827 84,868 104,708 123,881 130,621 Malaysia 325 12,447 34,374 55,135 52,257 Singapore 5,020 2,135 13,570 9,582 22,455 Myanmar 20,461 18,785 16,227 18,158 20,709 Lao People's 111,612 11,832 9,537 11,340 9,126 Democratic Republic Cambodia 19,368 15,251 14,956 9,133 6,704 Indonesia 41 21 27 7,401 6,646 Hong Kong, China 6,431 1,500 4,630 2,993 4,133 United States of 1,140 1,453 5,247 5,864 3,845 America Australia 80 43 86 55 2,255 Netherlands 3 12 228 641 655 Table 24: Exports of Multimedia portable players - audio, video, software downloading (HS Code 84713090) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016 World 456,263 424,176 367,226 197,850 169,070 China 450,024 376,623 295,241 149,933 133,142 Viet Nam 1,572 37,454 62,658 45,591 34,060 Mexico 707 220 144 249 320 United States of 166 207 368 366 306 America Korea, Republic of 515 7,759 5,706 701 298 Taipei, Chinese 199 108 59 84 176 Malaysia 763 122 1,450 406 168 Denmark 3 1 43 54 163 Hong Kong, China 30 823 1,020 79 117 Japan 99 42 192 92 92 Table 25: Imports of Handheld computers incl palmtops & personal digital assistants (PDAs) (HS Code 84713010) Source: Trade Map Unit: US Dollar thousand
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016 World 8,549 8,046 9,219 12,973 11,329 Myanmar 407 1,953 3,072 7,151 9,279 Lao People's 5,831 1,773 1,378 1,627 1,603 Democratic Republic Singapore 6 154 184 69 286 Cambodia 28 2,012 3,314 3,619 81 Hong Kong, China 1,334 51 426 63 23 Australia 2 6 53 25 15 Sri Lanka 0 1 0 0 14 United States of 125 36 419 5 6 America Albania 0 0 0 0 5 Malaysia 2 103 201 24 5 Table 26: Exports of Handheld computers incl palmtops & personal digital assistants (PDAs) (HS Code 84713010) Source: Trade Map Unit: US Dollar thousand
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Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016 World 127,843 126,968 91,041 90,392 121,912 China 104,161 105,739 72,010 72,667 107,124 United States of 6,046 6,030 3,446 5,901 4,706 America Singapore 2,297 4,193 6,840 4,196 1,552 Hong Kong, China 539 332 256 95 1,208 Taipei, Chinese 787 729 1,080 610 1,110 Japan 2,781 2,662 1,936 1,069 1,086 Germany 1,745 622 657 780 771 United Kingdom 409 708 696 313 723 Korea, Republic of 97 432 234 462 603 Malaysia 328 969 897 405 488 Table 27: 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 2012 in 2013 in 2014 in 2015 in 2016 World 26,415 11,942 8,415 7,359 7,794 Hong Kong, China 9,760 2,018 1,370 1,495 2,492 Lao People's 10,258 2,367 2,053 1,691 1,517 Democratic Republic Singapore 1,817 2,364 2,192 999 1,282 United States of 389 453 306 171 642 America Germany 240 43 78 1,451 434 New Zealand 4 21 12 0 207 Myanmar 1,038 285 418 48 170 Japan 420 232 227 308 154 Switzerland 2 0 68 9 149 Malaysia 195 2,517 117 269 98 Table 28: 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 2012 in 2013 in 2014 in 2015 in 2016 World 10,685 10,855 10,866 14,095 18,171 China 9,078 9,208 9,463 12,820 17,026 United States of 58 204 66 99 186 America Japan 569 654 507 206 181 Taipei, Chinese 121 173 196 262 130 Germany 163 61 124 67 115 France 8 5 3 50 90 Singapore 175 170 144 212 77 Mexico 45 48 33 88 75 United Kingdom 15 17 48 18 73 Korea, Republic of 59 60 18 10 45 Table 29: 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 2012 in 2013 in 2014 in 2015 in 2016 World 1,435 1,508 1,305 755 669 Lao People's 747 729 633 483 365 Democratic Republic Hong Kong, China 91 37 69 20 108 Taipei, Chinese 11 0 0 23 58 United States of 113 241 85 98 54 America Singapore 190 111 69 24 39 Myanmar 119 86 15 25 16 Cambodia 2 73 2 4 11 Switzerland 0 7 12 9 8 Canada 10 9 7 2 5 Japan 32 99 30 14 2 Table 30: 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 2012 in 2013 in 2014 in 2015 in 2016 World 19,597 20,002 18,324 22,521 26,674 China 18,547 18,856 17,629 21,705 26,052 Taipei, Chinese 246 390 137 178 242 Japan 385 34 97 121 78 Denmark 0 0 58 0 62 Hong Kong, China 122 128 101 64 43 United States of 68 200 47 60 43 America Germany 21 140 42 93 34 Viet Nam 0 0 0 23 26 Singapore 99 64 54 193 20 Korea, Republic of 18 16 9 8 19 Table 31: 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 2012 in 2013 in 2014 in 2015 in 2016 World 1,097 207 86 103 140 Hong Kong, China 85 8 29 1 37 Japan 2 2 1 39 36 Mexico 0 0 0 0 16 Lao People's 675 33 12 21 13 Democratic Republic Singapore 0 7 2 1 7 Australia 0 0 0 0 5 Myanmar 53 50 26 12 5 Taipei, Chinese 0 0 0 0 4 Germany 205 1 0 0 4 Sweden 0 0 0 0 4 Table 32: 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 2012 in 2013 in 2014 in 2015 in 2016 World 1,890,329 1,395,384 1,301,769 1,313,646 1,181,910 Malaysia 872,978 911,371 695,527 638,476 588,606 China 268,842 257,524 334,016 383,059 340,496 Thailand 115,959 85,912 109,127 166,233 113,073 Philippines 66,314 20,591 40,659 23,971 38,917 Singapore 16,335 25,462 24,329 26,173 29,309 Ireland 19,502 15,411 26,021 26,638 16,956 Japan 5,629 18,486 22,609 10,578 12,543 Taipei, Chinese 12,589 12,498 13,725 11,191 11,710 United States of 482,070 19,576 11,549 9,737 10,200 America Hungary 5,002 6,248 6,839 5,415 6,267 Table 33: 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 2012 in 2013 in 2014 in 2015 in 2016 World 13,177,109 11,792,179 11,733,603 10,939,807 9,843,617 United States of 3,074,211 3,095,053 3,174,723 3,234,972 2,943,513 America Hong Kong, China 2,390,069 2,606,089 2,488,481 2,246,147 2,264,907 China 3,462,468 1,699,286 1,241,430 1,012,588 849,125 Netherlands 634,027 919,082 1,086,049 933,147 747,994 Mexico 176,748 437,510 478,680 584,754 492,124 Japan 486,886 370,147 335,436 288,844 300,204 Czech Republic 342,391 330,345 374,490 361,513 293,527 Malaysia 272,545 161,212 113,858 127,478 293,016 Singapore 330,221 393,821 495,262 511,761 271,670 Taipei, Chinese 136,687 141,727 187,273 188,577 173,887 Table 34: 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 2012 in 2013 in 2014 in 2015 in 2016 World 19,305 10,744 8,669 4,739 3,448 China 11,320 6,259 5,216 2,960 2,398 Philippines 4,557 399 2,003 891 310 Taipei, Chinese 266 601 131 59 210 Mexico 55 62 107 122 108 Singapore 123 175 111 204 86 United States of 158 114 241 101 77 America Hungary 1 39 57 104 52 Japan 83 512 74 18 50 Thailand 2,332 2,275 386 152 47 Korea, Republic of 105 21 66 1 35 Table 35: Imports of Optical disk drives incl 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 2012 in 2013 in 2014 in 2015 in 2016 World 39,447 23,690 5,517 3,746 676,831 United States of 25,003 15,652 605 378 279,734 America China 1,543 107 2 1 78,980 Netherlands 0 0 0 0 54,203 Germany 0 0 0 1 49,645 Japan 1 10 1 1 39,684 Poland 0 0 0 0 36,065 India 2 0 4 6 29,968 Korea, Republic of 965 376 0 0 26,688 United Arab Emirates 0 0 0 0 9,664 Ireland 0 0 0 0 9,283 Table 36: Exports of Optical disk drives incl 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 2012 in 2013 in 2014 in 2015 in 2016 World 99,770 79,596 115,363 110,835 136,366 Thailand 40,603 25,022 60,964 59,499 62,959 China 38,094 35,698 34,427 27,565 42,601 Malaysia 8,441 2,282 2,741 7,257 10,418 Singapore 6,380 8,302 7,828 7,350 8,136 Philippines 2,180 2,291 5,526 5,300 6,126 Estonia 0 0 0 152 3,045 United States of 1,070 2,640 1,259 717 826 America Taipei, Chinese 252 618 589 634 766 Japan 1,320 558 674 785 376 Mexico 80 20 10 116 217 Table 37: 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 2012 in 2013 in 2014 in 2015 in 2016 World 4,669,049 3,365,587 4,708,446 5,904,692 6,631,384 United States of 1,035,082 983,484 1,334,030 1,872,122 1,942,639 America Hong Kong, China 486,013 589,707 811,326 1,199,335 1,540,141 Netherlands 28,612 14,048 112,903 246,436 587,641 China 2,358,178 873,682 785,404 531,281 454,161 Mexico 77,295 188,127 315,313 424,572 332,735 Malaysia 17,338 21,501 12,236 39,750 242,975 Japan 167,965 103,235 205,791 204,883 224,036 Czech Republic 85,850 93,855 174,568 249,372 193,593 Singapore 163,519 211,950 307,233 336,055 184,307 Ireland 62,717 104,425 142,610 168,707 122,796 Table 38: 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 2012 in 2013 in 2014 in 2015 in 2016 World 8,945 8,096 7,706 8,827 19,573 China 8,191 7,187 6,754 7,917 18,945 United Kingdom 38 153 229 193 286 Hong Kong, China 42 98 28 141 98 Czech Republic 1 13 38 44 66 United States of 216 297 382 115 50 America Taipei, Chinese 130 149 76 172 50 Singapore 6 78 85 79 24 Germany 1 16 6 0 16 Japan 10 20 19 13 13 Malaysia 9 2 8 9 10 Table 39: 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 2012 in 2013 in 2014 in 2015 in 2016 World 314 56 23 14 60 Myanmar 13 36 19 7 57 Cambodia 0 1 0 0 1 Philippines 0 0 0 0 1 India 0 2 0 0 0 Singapore 2 1 1 1 0 United States of 0 0 1 0 0 America Australia 0 0 0 0 0 China 0 0 0 0 0 France 0 0 0 0 0 Hong Kong, China 41 16 0 0 0 Table 40: 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 2012 in 2013 in 2014 in 2015 in 2016 World 462,208 488,814 514,089 616,076 490,401 China 169,191 209,962 251,945 341,730 258,296 Japan 85,708 60,444 60,981 61,241 63,843 Germany 48,156 69,035 32,010 45,402 23,714 Malaysia 7,883 11,268 12,050 14,617 16,163 United States of 20,164 25,796 25,808 16,253 15,786 America Philippines 11,969 13,390 15,294 18,358 15,704 Thailand 10,607 11,913 10,719 13,615 14,293 Korea, Republic of 11,492 8,931 7,510 20,336 12,915 Taipei, Chinese 9,295 8,779 8,692 8,428 11,182 Singapore 11,616 10,838 7,576 8,787 9,472 Table 41: 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 2012 in 2013 in 2014 in 2015 in 2016 World 1,031,159 1,004,395 1,037,771 1,135,781 1,025,918 United States of 261,604 195,765 236,101 254,121 237,573 America China 117,387 105,731 135,483 95,645 149,594 Mexico 84,287 90,193 45,873 98,336 114,205 Netherlands 71,409 68,758 72,108 77,206 97,117 Hong Kong, China 166,380 147,734 129,624 126,613 77,176 India 13,221 24,356 43,859 43,453 43,483 Japan 36,491 21,627 50,603 66,118 42,747 Malaysia 46,660 59,572 49,048 43,731 32,596 Taipei, Chinese 20,845 34,685 42,106 29,277 28,608 Czech Republic 22,752 20,294 16,417 29,489 27,462 Table 42: 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 2012 in 2013 in 2014 in 2015 in 2016 World 794,473 954,281 963,038 1,363,886 1,601,432 China 396,974 530,651 491,042 891,837 1,041,557 Thailand 68,750 88,746 142,745 194,674 270,071 Malaysia 72,282 82,692 88,360 53,815 67,494 Japan 55,535 47,972 37,534 39,646 50,926 United States of 52,349 72,733 51,601 50,657 48,479 America Mexico 18,015 17,311 16,607 33,313 29,353 Taipei, Chinese 15,158 18,989 15,660 21,345 23,101 Poland 876 1,328 912 541 8,775 Estonia 10,110 1,138 1,452 8,148 7,298 Singapore 9,585 9,070 5,108 5,968 5,043 Table 43: 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 2012 in 2013 in 2014 in 2015 in 2016 World 749,222 897,110 694,533 608,099 600,423 United States of 292,840 530,098 500,310 409,238 367,226 America Hong Kong, China 17,847 7,336 8,420 24,400 46,798 Netherlands 36,404 55,347 44,746 41,150 24,840 Japan 39,862 47,153 25,948 25,217 24,439 Mexico 3,181 6,129 762 3,676 21,461 Malaysia 204,542 86,284 11,115 12,886 20,898 China 27,638 31,349 19,850 17,667 16,400 Singapore 20,073 26,062 16,729 13,047 12,972 Korea, Republic of 13,806 40,289 12,124 11,526 10,942 India 9,013 10,027 8,571 7,356 9,314 Table 44: 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 2012 in 2013 in 2014 in 2015 in 2016 World 17,228 22,724 17,259 19,475 19,835 China 12,803 17,591 12,507 13,520 15,505 Indonesia 1,642 1,896 1,755 1,600 1,541 United States of 269 197 583 1,784 592 America Mexico 642 962 577 290 315 France 186 305 230 202 287 Japan 53 98 85 216 162 United Kingdom 105 251 116 154 143 Taipei, Chinese 96 65 96 79 126 Hong Kong, China 500 320 223 57 123 Italy 176 39 170 68 123 Table 45: 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 2012 in 2013 in 2014 in 2015 in 2016 World 4,079 4,245 4,529 4,958 5,008 India 1,325 2,066 2,912 3,144 2,311 Lao People's 383 264 332 621 900 Democratic Republic Myanmar 98 72 81 156 595 Brazil 1,647 1,099 381 177 496 Viet Nam 51 69 136 181 176 Singapore 15 91 89 80 123 Hong Kong, China 65 40 54 113 94 Malaysia 95 249 133 122 80 China 1 1 28 47 65 United States of 5 10 1 2 49 America Table 46: 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 2012 in 2013 in 2014 in 2015 in 2016 World 55,222 53,069 47,680 48,485 50,573 China 43,660 41,982 37,261 37,740 38,866 Malaysia 1,054 1,055 1,584 2,262 2,355 Mexico 3,014 2,533 2,974 2,455 2,003 Indonesia 1,392 2,213 1,608 1,306 1,891 United States of 1,604 1,604 1,161 873 1,238 America France 1,275 379 294 457 1,039 Germany 496 919 511 925 933 United Kingdom 1,027 513 464 574 844 Italy 379 504 608 453 470 Japan 105 73 114 150 188 Table 47: 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 2012 in 2013 in 2014 in 2015 in 2016 World 569 1,013 782 1,095 848 Hong Kong, China 20 72 93 235 181 Malaysia 10 25 13 39 137 Viet Nam 3 27 23 56 91 Cambodia 43 4 71 32 84 Myanmar 105 32 41 77 70 Lao People's 35 30 71 324 50 Democratic Republic Australia 0 22 12 2 45 United States of 48 316 188 31 33 America Singapore 99 45 42 62 32 Netherlands 28 258 36 12 31 Table 48: 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 2012 in 2013 in 2014 in 2015 in 2016 World 142,590 114,706 81,713 61,547 45,994 China 85,546 69,626 59,196 45,715 37,193 Indonesia 27,116 18,073 8,742 4,343 2,023 Taipei, Chinese 4,822 4,661 2,934 2,181 1,620 Malaysia 5,386 3,749 2,815 2,545 1,244 United States of 1,199 1,855 1,338 2,311 914 America Korea, Republic of 12,522 10,118 3,539 1,808 789 Japan 3,238 2,347 1,824 806 682 Hong Kong, China 346 1,601 431 841 388 Thailand 541 187 57 186 317 Belgium 2 3 11 2 207 Table 49: 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 2012 in 2013 in 2014 in 2015 in 2016 World 45,042 30,094 20,283 10,735 7,176 Indonesia 8,338 10,452 6,996 3,402 2,585 Japan 11,785 8,022 3,542 3,344 2,425 United States of 4,611 1,111 1,428 563 449 America Myanmar 73 262 613 356 423 India 869 4,071 5,701 475 213 Lao People's 489 137 230 193 163 Democratic Republic Cambodia 109 293 382 1,446 134 China 1,558 198 5 1 127 Sri Lanka 52 34 10 6 115 Taipei, Chinese 1,151 430 111 260 101 Table 50: 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 2012 in 2013 in 2014 in 2015 in 2016 World 301,779 634,209 628,769 594,413 745,052 Singapore 288,905 626,280 625,433 592,040 743,326 Taipei, Chinese 7,518 4,479 1,973 1,155 733 Israel 286 222 197 214 253 Germany 240 264 193 241 227 Japan 453 314 338 284 185 China 1,157 1,339 332 98 112 United States of 1,168 182 66 88 99 America India 40 91 28 50 24 Italy 34 42 40 64 16 Malaysia 259 33 22 48 15 Table 51: 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 2012 in 2013 in 2014 in 2015 in 2016 World 6,581 4,191 12,892 12,085 24,333 Singapore 61 142 9,708 11,135 22,919 Japan 139 539 435 622 736 Lao People's 0 0 0 1 163 Democratic Republic Malaysia 8 21 114 27 124 China 1 74 20 0 88 Chile 721 1,208 875 0 84 Hong Kong, China 187 97 46 29 65 Kuwait 0 0 0 0 25 Australia 303 107 60 3 23 India 8 0 1 5 22 Table 52: 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 2012 in 2013 in 2014 in 2015 in 2016 World 16,994 20,085 19,607 44,369 23,347 Israel 105 369 924 19,968 9,129 China 9,202 10,397 10,359 15,351 7,553 Thailand 3,764 4,619 4,522 4,520 3,018 Taipei, Chinese 55 20 16 162 1,459 United States of 1,146 1,540 905 739 691 America Malaysia 32 127 56 288 338 Mexico 134 894 720 1,939 283 Poland 0 50 60 183 223 Hong Kong, China 83 20 37 42 181 United Kingdom 456 275 453 53 129 Table 53: 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 2012 in 2013 in 2014 in 2015 in 2016 World 204,254 82,726 50,607 55,617 50,650 Netherlands 10,364 10,570 22,841 24,033 19,629 United States of 34,795 24,665 12,345 10,971 11,750 America China 5,362 8,456 6,050 4,401 7,604 Hong Kong, China 24,983 10,418 698 3,588 2,467 Japan 16,406 1,774 1,365 1,486 1,788 Germany 6,948 1,217 22 1,487 1,523 Mexico 5,273 4,141 671 3,425 1,344 India 876 1,009 760 665 972 Singapore 1,331 1,069 1,177 837 944 Romania 8,025 2,865 569 1,483 698 Table 54: 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 2012 in 2013 in 2014 in 2015 in 2016 World 132,085 131,950 136,501 132,388 96,729 Singapore 23,291 26,208 27,133 24,737 20,444 Japan 21,773 21,438 23,826 20,516 17,732 Germany 24,232 19,149 29,009 37,276 14,781 China 8,577 6,604 5,343 5,633 12,417 United States of 18,523 23,927 17,288 11,792 10,973 America Ireland 1,720 2,538 7,711 7,250 6,086 Taipei, Chinese 8,846 9,635 5,366 3,048 2,421 France 627 994 672 416 1,222 Hong Kong, China 1,819 826 565 511 1,170 Korea, Republic of 2,161 1,513 715 5,284 1,042 Table 55: 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 2012 in 2013 in 2014 in 2015 in 2016 World 3,924 3,641 4,299 5,454 6,714 Lao People's 221 145 596 1,079 3,009 Democratic Republic Myanmar 86 52 1,082 2,697 922 Hong Kong, China 640 120 98 30 662 Viet Nam 1,046 606 265 248 485 Singapore 233 479 545 238 356 Pakistan 0 0 1 161 167 Cambodia 37 402 424 133 160 Taipei, Chinese 18 41 93 18 140 Canada 5 0 7 25 136 Malaysia 195 19 38 72 131 Table 56: 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 2012 in 2013 in 2014 in 2015 in 2016 World 92,824 62,530 79,804 87,546 98,478 China 23,242 33,357 37,555 31,242 42,300 Taipei, Chinese 5,664 13,896 19,624 18,275 21,926 Japan 7,846 5,778 12,464 17,714 20,818 Netherlands 3 52 8 11,652 4,491 United States of 23,097 2,366 1,084 2,755 3,290 America Malaysia 3,279 1,128 629 884 865 Korea, Republic of 165 108 146 87 841 Thailand 801 517 426 157 753 Germany 2,957 3,370 1,671 2,264 638 Mexico 6 12 13 49 638 Table 57: 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 2012 in 2013 in 2014 in 2015 in 2016 World 1,643 2,987 5,456 3,305 5,557 United Kingdom 16 3 0 34 1,168 Viet Nam 4 15 251 431 912 United States of 23 104 128 97 718 America Malaysia 0 23 54 35 491 Hong Kong, China 81 79 390 146 384 Germany 51 995 401 767 368 United Arab Emirates 0 5 0 668 364 Brazil 0 194 1,175 617 285 Singapore 89 59 362 143 192 Japan 297 2 54 123 183 Table 58: 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 2012 in 2013 in 2014 in 2015 in 2016 World 15,919 15,116 14,025 12,043 13,498 China 6,325 7,545 5,233 4,350 6,862 Germany 307 567 913 1,024 2,160 Taipei, Chinese 3,546 1,124 2,123 998 970 Thailand 28 189 49 493 763 Poland 327 1,872 1,504 1,580 685 Hong Kong, China 153 189 331 186 362 United States of 1,016 563 1,166 1,218 318 America United Kingdom 104 372 73 63 307 Korea, Republic of 977 1,088 762 435 254 Canada 42 480 622 900 165 Table 59: 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 2012 in 2013 in 2014 in 2015 in 2016 World 3,762 36,334 119,684 108,642 131,249 United States of 68 15,779 49,875 52,899 70,435 America Netherlands 0 5,581 22,994 25,156 29,226 Japan 11 2,625 15,117 10,305 19,861 China 49 7,723 13,534 4,982 5,243 Singapore 2,349 1,306 1,911 2,068 3,252 Mexico 0 0 7,066 10,186 1,171 Australia 50 324 596 608 745 Indonesia 369 134 65 0 274 Belgium 0 0 11 24 214 Korea, Republic of 85 233 3,457 27 210 Table 60: 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 2012 in 2013 in 2014 in 2015 in 2016 World 458,103 347,782 295,443 309,746 353,341 China 161,315 124,931 94,358 115,702 164,649 Japan 137,478 91,023 89,818 63,700 69,251 Thailand 85,181 55,221 44,231 55,792 37,651 Viet Nam 1,050 1,719 1,830 9,585 16,979 Indonesia 4,250 3,463 2,208 1,320 13,385 Germany 3,615 4,297 5,394 4,990 11,318 Taipei, Chinese 30,731 30,517 20,228 25,663 10,168 United States of 6,524 8,213 6,879 7,768 6,170 America Singapore 2,084 3,231 2,661 1,997 2,889 Korea, Republic of 7,172 5,265 5,785 3,166 2,860 Table 61: 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 2012 in 2013 in 2014 in 2015 in 2016 World 2,295,687 2,109,554 1,846,269 1,714,771 1,442,176 United States of 480,002 407,140 401,061 368,450 351,018 America China 328,656 339,865 303,783 280,435 263,848 Netherlands 555,408 487,051 359,501 345,395 262,034 Japan 189,106 272,003 224,835 189,326 141,349 Hong Kong, China 211,875 130,156 75,162 61,286 58,797 India 10,455 35,012 47,872 62,543 52,094 United Arab Emirates 56,118 39,374 56,410 66,703 49,449 Singapore 9,922 27,081 52,367 45,975 36,944 Korea, Republic of 79,695 57,465 61,417 46,084 32,780 Czech Republic 11,575 16,117 10,276 25,607 24,167 Table 62: 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 2012 in 2013 in 2014 in 2015 in 2016 World 17,313 18,439 15,552 14,585 18,730 Malaysia 48 133 11 104 4,771 Taipei, Chinese 7,984 6,896 6,427 3,946 4,259 China 1,807 1,385 1,686 1,587 3,732 Singapore 188 1,040 315 2,158 1,468 United States of 2,426 3,455 4,956 2,682 1,248 America Germany 761 105 3 709 1,200 Korea, Republic of 1,225 3,225 720 1,335 341 Mexico 1 117 359 848 305 South Africa 0 1 19 20 192 Japan 1,184 960 204 110 167 Table 63: 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 2012 in 2013 in 2014 in 2015 in 2016 World 10,149 2,900 1,518 10,209 9,586 Australia 391 22 9 3,136 2,974 Malaysia 81 374 98 4,059 2,025 Singapore 81 600 336 1,861 1,616 United States of 830 166 17 23 1,261 America Sweden 0 0 0 342 529 Taipei, Chinese 74 118 138 208 406 Japan 4,320 79 2 57 295 France 31 0 0 0 153 New Zealand 0 1 105 222 143 United Arab Emirates 0 0 0 31 57 Table 64: 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 2012 in 2013 in 2014 in 2015 in 2016 World 6,845 3,495 2,159 4,066 2,807 China 5,848 3,162 1,630 3,429 2,320 Malaysia 938 57 219 408 347 Viet Nam 0 0 0 8 61 Germany 4 6 115 126 27 Portugal 0 0 0 0 21 Korea, Republic of 18 8 7 1 17 Japan 6 53 39 3 6 United States of 5 8 13 18 3 America Australia 0 5 1 1 1 Hong Kong, China 4 12 45 17 1 Table 65: 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 2012 in 2013 in 2014 in 2015 in 2016 World 22,168 6,737 4,248 643 1,077 Myanmar 324 602 496 337 509 Japan 911 19 356 42 207 Indonesia 4 0 5 1 65 India 2 2 0 0 56 Taipei, Chinese 0 6 2 1 42 Hong Kong, China 32 26 42 66 34 Malaysia 26 11 6 66 26 Australia 8 9 14 2 20 China 13 22 4 9 17 United States of 20,736 5,922 3,149 9 16 America Table 66: 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 2012 in 2013 in 2014 in 2015 in 2016 World 2,260 11,384 15,096 7,539 3,985 China 728 1,556 1,097 2,311 2,857 Indonesia 1,504 9,702 13,814 5,212 1,068 Malaysia 0 11 0 2 17 Taipei, Chinese 0 1 0 8 14 United States of 1 1 37 1 11 America Mexico 0 19 48 0 8 Korea, Republic of 5 8 0 0 7 Belgium 0 1 0 0 2 Canada 15 11 0 0 0 Hong Kong, China 4 4 6 0 0 Table 67: 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 2012 in 2013 in 2014 in 2015 in 2016 World 1,701 36 551 1,341 579 India 0 0 0 1,304 578 Australia 0 0 0 0 1 Austria 1,032 0 0 0 0 Belgium 488 0 0 0 0 Canada 0 0 479 0 0 China 0 10 0 0 0 France 0 0 14 0 0 Germany 6 0 0 0 0 Hong Kong, China 0 20 0 0 0 Malaysia 0 0 59 37 0 Table 68: 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 2012 in 2013 in 2014 in 2015 in 2016 World 1,504,232 1,498,987 1,215,323 649,119 277 Japan 517,997 520,527 388,074 201,831 71 United States of 147,419 127,258 95,459 50,218 50 America Korea, Republic of 26,989 24,691 17,855 8,575 43 Taipei, Chinese 31,002 34,748 25,526 13,759 32 China 325,561 394,918 360,542 214,134 22 Germany 39,785 41,644 40,218 20,630 12 Singapore 29,664 32,012 22,341 23,002 12 Australia 4,942 2,392 5,608 4,995 7 Hong Kong, China 8,624 5,174 7,163 3,156 7 Israel 3,018 2,559 2,567 2,521 4 Table 69: 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 2012 in 2013 in 2014 in 2015 in 2016 World 195,160 182,469 114,747 117,414 0 Algeria 0 0 0 666 0 Argentina 11,523 1,103 6 21 0 Australia 1,672 972 621 381 0 Austria 64 53 0 12 0 Bahrain 1 1 3 1 0 Bangladesh 908 15 17 2 0 Armenia 1 1 0 0 0 Belgium 45 224 79 6 0 Bhutan 0 2 0 0 0 Brazil 2,629 2,734 1,981 737 0 Table 70: 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 2012 in 2013 in 2014 in 2015 in 2016 World 3,773,515 3,100,844 2,946,200 2,642,188 2,138,925 Malaysia 1,146,654 1,036,977 1,084,391 1,025,920 863,362 China 1,540,880 1,129,736 869,530 641,529 467,542 Philippines 150,967 198,400 215,312 355,406 450,461 United States of 302,760 449,257 464,568 319,566 132,759 America Hong Kong, China 79,919 73,974 94,829 86,178 51,344 Japan 81,902 55,640 64,628 53,339 40,533 Thailand 19,565 58,308 60,289 55,766 35,642 Singapore 347,213 42,657 33,279 39,263 35,530 Taipei, Chinese 24,438 27,080 25,737 26,311 23,749 Ireland 2,424 1,440 7,858 15,221 12,660 Table 71: 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 2012 in 2013 in 2014 in 2015 in 2016 World 3,358,194 3,788,116 3,567,295 3,252,392 3,069,221 China 928,055 786,866 720,028 663,074 662,141 Malaysia 685,589 905,992 797,141 708,940 655,441 United States of 441,215 667,645 471,248 469,753 502,087 America Hong Kong, China 617,578 627,100 799,529 676,152 472,835 Philippines 97,633 115,294 150,591 137,109 172,618 Mexico 135,843 157,711 171,108 181,085 146,440 Singapore 77,937 88,676 80,014 87,813 109,652 Ireland 94,790 131,607 112,006 94,235 86,305 France 42,714 57,245 63,722 47,058 54,758 Netherlands 76,853 83,896 56,138 46,077 46,808 Table 72: 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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