• KResearch predicts that retail sales in 2024 will experience a slowdown compared to the previous year, growing at approximately 3.0% (YoY) with a value of around 4.1 trillion baht (see Figure 1). This growth is still supported by spending from foreign tourists, along with the impact of rising prices for certain products, particularly food and personal care items, which are likely to continue increasing. A survey of retail operators found that over 60% of businesses plan to raise prices in the next three months (Retailer Sentiment Index: RSI January 2024 by the Thai Retailers Association and the Bank of Thailand).

  • While retail sales in Thailand are growing, Thai manufacturers must compete fiercely with imported products, especially from China, which has been penetrating the Thai market. In 2023, Thailand imported consumer goods from China worth 469.521 billion baht, an increase of 2.8% (YoY), accounting for about 41% of total consumer goods imports (see Figure 2).

The majority of products entering the market from China include both food and daily necessities, such as electrical appliances, which make up approximately 43.3% of the total value of consumer goods imported from China. This is followed by fresh fruits and vegetables and seasonings at 10.0%, clothing and footwear at 9.3%, as well as household items and decorations at 9.1%, among others (see Figure 3).

  • The influx of consumer goods from China is putting pressure on the competitiveness of Thai manufacturers. The competition from China has made it increasingly difficult for Thai producers in these categories, as some imported items from China are cheaper than those produced in Thailand, such as fashion items (shoes, bags) and fresh fruits and vegetables (see Figure 4).

Moreover, the production capacity for consumer goods that are being challenged by Chinese imports is showing a continuous decline, particularly in the non-food category. The utilization rate in the fashion industry (shoes, clothing, accessories) and furniture is only around 30-45% (see Figure 5).

Therefore, KResearch believes that while the overall retail market continues to grow, the high competition from imported goods will keep Thai manufacturers in a challenging business environment.