Thailand Digital Economy: Why should you invest in?

Thailand has undergone a digital revolution influencing processes, activities, and transactions across practically every industry, with the market value of its digital economy considered the second biggest in ASEAN. Thailand is well on its way to achieving digital transformation, thanks to its pursuit of the economic aims and vision outlined in its Thailand 4.0 program. The digital economy was predicted to account for around 17% of Thailand’s Gross Domestic Product (GDP) in 2018.

Numerous initiatives have been taken on digital economy to increase overall efficiency and economic growth as part of the country’s goal toward developing an economy fueled by digital and cutting-edge technology. Thailand has emerged as an ASEAN digital leader as a result of this strategy, as seen by the country’s advances in a variety of international rankings.

Thailand has made a lot of notable achievements toward greater economic and social development since the formation of the Digital Economy and Society Development Plan in 2016. These advancements have been reflected in a variety of worldwide rankings and indexes.

WCR (World Competitiveness Ranking): The World Competitiveness Report (WCR), developed by the International Institute for Management Development (IMD), assesses the institutions, policies, and variables that influence economic growth. Thailand’s technological infrastructure improved greatly in 2018, rising from 41st in 2014 to 36th in 2018.

Thailand’s work force has played an important part in the country’s transition to a digital economy. This success has been primarily driven by a steady supply of university graduates in a variety of ICT-related disciplines. In Thailand, over 31,000 persons worked in ICT-related areas in 2018.

Thailand’s labor force has played a significant role in transforming the country into a digital economy. This progress has been fundamentally driven by a consistent stream of university graduates in a range of fields related to ICT. In 2018, there were approximately 31,000 people working in ICT-related fields in Thailand.

Thailand’s government formed the Ministry of Digital Economy and Society in 2016. This was followed by the unveiling of a Thailand Digital Government Development Plan 2017-2021 a year later. Each of these measures was designed to increase digital proficiency in all sectors of Thai society, including tourism, education, finance, and public administration.

Significant investment has been made in a variety of sectors to foster meaningful change and establish a readily accessible digital infrastructure. In terms of hard infrastructure, the government has prioritized internet speed and connectivity, as well as the connecting of underwater cables and digital industry clusters.

CAT Telecom presently operates six undersea cable networks, with another route under construction. This would boost network connections across different areas and help Thailand achieve its objective of becoming Asia’s internet and communication powerhouse.

Thailand’s Digital Park is a new economic cluster strategically positioned in the Eastern Economic Corridor (EEC) as a destination for digital global players and digital business innovators.

In recent years, the Thai government has enacted a slew of new rules and regulations to aid in the execution of its digital economy program. The Act on Digital Development for Economy and Society also saw the foundation of the National Digital Economy and Society Committee, which is led by the Prime Minister. These new rules and regulations are intended to improve convenience, decrease barriers, and boost efficiency in online activities and transactions.

To encourage the use of e-payments such as PromptPay, Electronic Data Capture (EDC), and Quick Response (QR) Code in order to move towards a cashless society, the ‘National e- Payment Master Plan’ was introduced in 2017 to encourage the use of e-payments such as PromptPay, Electronic Data Capture (EDC), and Quick Response (QR) Code.

Thailand’s digital economy, like that of many other countries of the world, has been rapidly expanding. Thailand’s digital economy rose by 20% in 2017, contributing for around 17% of the country’s GDP. The value of the digital economy was predicted to increase again in 2018 and reach 19% of GDP. The high internet penetration and vast number of social media users are the primary drivers of such growth.

Every year, an increasing number of Thai individuals become smartphone users, with around 67 percent of the total population currently owning or having regular access to a smartphone. This tendency, together with ever-increasing internet penetration rates, has contributed considerably to Thailand’s thriving eCommerce sector’s quick rise.

Since 2014, the entire value of Thailand’s eCommerce sector has increased by around 10% every year, reaching 103.6 billion USD in 2018.

Thailand’s software sector has been continually strong, owing to the country’s good infrastructure, which is essential for software creation. Broadband internet, network security, a low rate of power outages, and sound production facilities are all included.

Data centers and the cloud business have thrived as a result of increased demand from enterprises interested in digital transformation and AI adoption, particularly in the banking sector. This approach has also gained traction among SMEs and startups wanting to cut expenses and mitigate the dangers posed by cyber attacks. Thailand’s market expanded by around 35% in 2017, compared to 12% for the worldwide market. The combined market value of data centers and the cloud is around 0.88 billion USD.

In order to develop beyond the conventional businesses within the digital economy, the Thai government has made a deliberate effort in recent years to allocate more funding towards a variety of creative sectors. Thailand’s creative economy has the potential to develop greatly in the next years, thanks to the country’s plethora of talent.

Thailand has long been renowned as a filmmaking hotspot in Southeast Asia. With an estimated value of 0.78 billion USD1, the industry’s contribution to the Thai economy continues to grow dramatically. The number of international production enterprises joining the Thai market has increased in tandem.

CJ Entertainment from South Korea was one of the most significant entrants. The organization expects to finish ten feature-length films by the end of 2019 after an initial investment of $3.27 million USD.

Thai films are typically highly appreciated throughout the area, with a number of prominent examples including Laddaland, The Billionaire, Bangkok Traffic (Love) Story, and Bad Genius.

Thailand has gained a reputation for producing high-quality animation work while also providing a large pool of creative talent since the early-mid 2000s. With cheap overheads, Thailand has been able to make and contribute to a variety of local and international cartoons such as The Blue Elephant and Adventure Planet.

The animation business in Thailand is expected to be worth 131.62 million USD in 2019, representing a 4% growth over the previous year.

Many Thai studios are also selected as outsourced service providers by world-class animation creators. Thai companies’ visual effects and animation contributed to the success of well-known animated films such as Rango, Journey to the West 2, and Frozen.

The worldwide gaming market is projected to be around 46 billion USD each year. With 18.3 million self-proclaimed gamers in Thailand, it’s no surprise that the country has the fastest-growing video game market in Southeast Asia.

According to a survey conducted by the Digital Economy Promotion Agency, the Thai gaming business expanded by 18% in 2018, up from 15% growth in 2016. The industry’s worth is expected to reach 0.75 billion USD in 2019.

Thailand’s thriving startup environment may be ascribed in large part to the availability of strong relationships with creative enterprises, trailblazing ICT entrepreneurs, and high client demand. From 2012 to 2017, the number of Thai businesses backed by venture capital climbed from three in 2012 to more than 90 in 2017. Over the same time period, startup funding rose at a quick pace, rising from 2.1 million USD in 2012 to 271.48 million USD in 2017.
The country has a strong, well-functioning, and well-structured ecosystem to assist diverse startup projects, including venture funders, accelerators, and incubators, as well as government organizations and private enterprises.

Thailand’s digital environment is expanding at a fast rate. This is largely owing to the numerous banks, telecommunications corporations, and other significant organizations that have built and implemented accelerator programs in recent years.

The BOI provides a variety of incentives for investment projects that match national development goals. The tax breaks include the elimination of corporate income tax, as well as the elimination of import duties on machinery necessary for the project and raw or vital materials used in the manufacture of exported goods. In terms of non-tax incentives, the BOI also offers authority to bring in expatriates, to take or send foreign money overseas, and to own land for use in the project.