Summary of business and market in Thailand

ECONOMY. Thailand has a business-friendly market economy fueled by heavy foreign investment and export-oriented manufacturing, especially in electronics, food, and automobiles. Thailand’s exports account for 60% of the country’s GDP. Thailand experienced strong economic growth prior to the 1997 Asian economic crisis with GDP growth averaging 9.4% per year. However, the crisis negatively affected businesses in Thailand, causing the value of the Thai baht to drop by more than 50% against the US dollar. Since the crisis, the economy has grown on a growth path.

Thailand’s GDP was US$163.5 billion with a per capita GDP of US$2,537 in 2004. Thailand’s GDP grew by an average of 4.6% per year between 2000 and 2004 driven mainly by exports of high-tech products, mainly electronics. Inflation remained below 2.0% between 2000 and 2003, but increased to 2.8% in 2004. However, unemployment showed a downward trend from 3.6% in 2000 to 1.8% in 2004.

Nearly 60% of Thailand’s labor force is involved in the agricultural industry, but it contributed only 9.8% of the country’s GDP in 2004. The service industry contributed 46.1% of Thailand’s GDP and manufacturing to 44.1% during the period. Major industries include tourism, electronics, textiles and clothing, processed foods, beverages, agricultural products, jewelry, furniture, plastics, vehicles and vehicle parts, and tungsten mining. and tin. The main agricultural products include rice, tapioca, rubber, corn, sugar cane, coconut, soybeans, and milk.

DEMOGRAPHY. Ethnic Thais make up 75% of Thailand’s 65 million people and another 11% are Chinese or Sino-Thai who have assimilated into Thai culture or come from intermarriage. Minorities include Malays who lived mainly in southern Thailand and make up 4% of the population. Others include Mon, Lao, Khmer, Puan and Karen minorities and immigrants from India. Almost 95% of the country’s population is Buddhist, while the Malays in Thailand are predominantly Muslim. Thai is the national language, while languages ​​used by minorities include Malay, Isan, and Khmer. Schools teach English, but proficiency is low and the educated elite are generally more proficient with the language.

The majority of the Thai population still lives in rural communities, although the proportion of the urban population is increasing. Thailand’s urban population increased from 22% of the total population in 2000 to 31% in 2004. Thailand’s capital and main city, Bangkok, accounts for nearly 8% of the country’s total population. Other major cities include Nonthaburi, Pak Kret, Hat Yai, Nakhon Ratchasima, Chiang Mai, and Udon Thani.

Thailand managed to reduce the poverty level from 27% in 1990 to 10% in 2004. The proportion of the population categorized as belonging to low-income households is estimated at 60%, while middle- and high-income households account for 30 %. The median household income in Bangkok is twice the national average.

INFRASTRUCTURE. Telecommunications services for the general public are generally adequate. Broadband Internet services are mainly concentrated in Bangkok. Cities and towns are well connected by roads, but there are no superhighways connecting Thailand’s major cities and towns. Cities Major cities have airports and are well connected by bus and rail systems.

INTERNATIONAL TRADE. Thailand’s main trading partners are Japan, the US, China, Hong Kong, Singapore, Malaysia and Taiwan. Thailand’s main exports include electronics, vehicles and vehicle parts, textiles, clothing, footwear, seafood, processed foods, rice, rubber, jewelry, household appliances including computers. The main imports include machinery and equipment, raw materials and finished products, consumer goods, and fuels.

CONSUMER USE OF TECHNOLOGY. There were about 17.3 million fixed line phones installed in 2004, giving a penetration of 40% of all Thai households with installed phones. Mobile phone penetration increased from just 7% of the population in 2001 to 42% or 27 million mobile phones in 2004. Computer penetration is still low, but increased from 5.1% of households in 2001 to almost 12% in 2004. The number of Internet users reached an estimated 8 million in 2004, but most Internet users are concentrated in Bangkok and major cities and towns. Television penetration in homes at 93% indicates that many low-income homes have televisions.

RETAIL MARKET. The retail industry in Thailand totaled an estimated US$24.5 billion in 2004. There are nearly 300,000 traditional “mom and pop” stores in Thailand accounting for 65% of total retail sales. However, there are 4,500 modern commercial establishments (hypermarkets, supermarkets, department stores, and convenience stores) that represent 35% of total retail sales. Most modern retail establishments are located in Bangkok. Shopping at modern retail outlets is becoming increasingly popular and more outlets are expected in the near future.

FOOD CULTURE. Rice is the staple, but while those in central and southern Thailand prefer fragrant white rice, those in northern Thailand prefer the glutinous variety. Thai dishes are generally hot and spicy, but food from the northern region is generally milder. Thais are adapting less to Western foods, even if they could afford it, compared to consumers in Singapore and Malaysia. However, bakery and chest chains are gaining popularity among young professionals who have adapted to Western culture.