The escalating rivalry between local and niche brands as they compete against larger players in the e-commerce realm, along with the surge of affiliate marketing, is propelling the growth of digital advertising expenditures, as per insights from the Media Intelligence Group.
Anticipated data for this year suggests that spending on advertising and marketing communications is projected to increase by 3.3%, reaching 87 billion baht. In the first quarter of the current year, the total spending amounted to 20.4 billion baht, marking a 7.4% year-on-year increase.
Predictions for the Thai e-commerce sector indicate a growth in value to 1 trillion baht this year from 900 billion baht last year, as reported by the ad agency.
Pawat Ruangdejworachai, the president and chief executive of Media Intelligence Group, stated that Thailand is preparing to immerse itself fully in the e-commerce landscape, presenting burgeoning opportunities for adept small online vendors who possess the skills, creativity, and flexibility to capitalize on this evolving environment.
The market is witnessing intense online competitiveness within categories such as personal care, beauty products, food, cafes, restaurants, and leisure. Smaller brands and merchants are fiercely striving to enhance their market presence against established major brands.
In this scenario, major brands that are adaptable can safeguard their market shares, while smaller brands face the challenge of gaining consumer acceptance. Leveraging personalized marketing techniques and collaborating with key opinion leaders and influencers are advantages that small brands have in promoting their products effectively.
The Thai market boasts approximately 2 million key opinion leaders and influencers, with the affiliate program acting as a catalyst in increasing their numbers.
The influence of key opinion leaders, influencers, and affiliate marketing in e-commerce platforms is forecasted to be key drivers behind the expected 8% growth in digital advertising this year, according to Media Intelligence.
Looking ahead to 2024, Media Intelligence anticipates that Thai media spending will grow by 3.3% to 87.6 billion baht, primarily propelled by the escalation in digital channel media and out-of-home media.
The predictive analysis by the LEARNLAB research and customer insight unit at Media Intelligence suggests that traditional media like TV, print, radio, and theatre will constitute 35% of total ad spending in the current year, with digital media occupying 45%, and out-of-home and transit media accounting for 20%.
Challenges faced by major and small brands include economic instability, reduced consumer purchasing power, and the influx of competitively priced Chinese products. Media Intelligence highlighted data from the Kasikorn Research Centre, indicating that the value of imported Chinese goods in Thailand in 2023 amounted to 470 billion baht, against the backdrop of a total Thai retail market value of 4 trillion baht.
Efforts by Thai businesses to enhance product quality, build robust brands, and implement effective marketing strategies have been underscored as imperative to bolster their competitiveness. Expanding business horizons to tap into the vast Chinese market, nearly 20 times larger than the Thai market, is essential for Thai brands.
To cater to the Chinese market, businesses in Thailand are advised to utilize platforms like WeChat and Douyin, and collaborate with influencers to align with Chinese culture, foster trust, and elevate brand recognition, as per insights from Mr. Pawat.
According to Nielsen’s findings, advertising spending in the first quarter of 2024 showed a 6% increase compared to the same period the previous year, amounting to 27.7 billion baht. Television continued to dominate the advertising landscape, claiming 50% of total spending, while out-of-home media witnessed the highest growth at 16%.
Nielsen’s research also indicated that 90% of Thai households own televisions, with 45% being smart TVs capable of streaming online content. Cross-platform ratings revealed that in the first quarter, 45% of TV content was accessed via streaming, with YouTube (16%), TikTok (7%), Facebook (6%), True ID (5%), and other streaming services (11%) being popular choices.
