Wider Generation Gap Prompts Businesses to Place More Emphasis on Specific Needs of Consumers (Current Issue No.3190)

The economic recovery of Thailand's trading partners should see further improvement from the previous year as they continue to adjust to the COVID-19 pandemic. Many countries still rely on importing goods from Thailand, especially IT products, which have steadily displayed signs of accelerated growth in line with global trends. This factor has propelled cross-border exports to third countries (China, Vietnam and Singapore) or transit trade to the forefront. KResearch projects that Thailand's border trade including transit trade in 2021 will make a positive turnaround at 4.3 percent growth, with an export value of THB 799.195 billion (projected range of 3.3-5.5 percent growth, or THB 791.602 -THB 808.461 billion). The exact value will depend on the rate of economic recovery among Thailand's trading partners stemming from their efforts to control COVID-19 outbreaks. Exports to most neighboring countries have experienced growth. However, shipments to certain countries saw a contraction due to specific issues like Myanmar's political turmoil which is weighing upon its economy, and Cambodia's swine flu which has made last year's base much higher than usual.

Going forward, transit shipments to China and Vietnam will become significantly more important. Nevertheless, transportation of goods  through several countries like Lao PDR and Vietnam to  China will still face several obstacles. If the Thai authorities are able to facilitate the integration of customs​ clearance with cross-border logistics, road transport across the Thai border could become a viable option that allows quick shipment of goods to end markets.

Another factor that merits close watch  is undoubtedly Thailand's current production and export infrastructure, which is still not conducive to the steady growth of Thailand's border  trade, since the majority of consumer products, especially food and beverages are not added value goods. Because the market size is limited, efforts to push for accelerated growth in border trade are unlikely. Meanwhile, products that require raw materials from Thailand like rubber and tropical fruits, which have great potential, will help to maintain healthy cross-border trade to China and Vietnam, and keep overall prospects bright. However, products with high added value under the automotive and technology groups – particularly IT products that continue to be in high demand in the global market – will still have the opportunity to see continual growth. These products will play an important role in stimulating Thailand's border  trade henceforth. However, much will rest on the investment decisions of foreign companies – whether they will continue to invest in Thailand or choose to move their production bases elsewhere. In order to promote border trade, which is an integral part of Thailand's overall trade, improvement in existing production infrastructure is needed in order to make Thai products stand out from competitors and be desirable to trade partners.