The Kingdom of Thailand is known as a tourist destination but also has a flourishing exporting business sector and strong economy ranked 9th in Asia. What can it bring to your Sourcing or Procurement strategy.
Thailand is situated in the Indochinese Peninsula and shares borders with Myanmar (Burma) to the west, Laos to the northeast, Cambodia to the southeast, and Malaysia to the south. It has coastlines along the Gulf of Thailand and the Andaman Sea. A population of over 70 million people, has one of the lowest unemployment rates and is recognised by the World Bank as a “one of the great development success stories” in social and development indicators.
Thailand’s economy is expected to grow by 3.6% this year, up from 2.6% last year, supported by stronger private consumption, a recovery in the tourism sector and strong pent-up demand following China’s reopening, the World Bank said on Friday 21st March 2023
Thailand’s development success has been built on a range of factors, Governmental, Geographic and Environmental to create an increasingly strong economic performance. Making it a country that has can offer many companies and brands strong strategic sourcing options, as part of a China+1 or Global Sourcing strategy.
- Competitive Manufacturing Sector: Thailand has a well-developed manufacturing sector with a strong focus on electronics, automotive, textiles, and food processing industries. The country offers a skilled workforce, advanced infrastructure, and a supportive business environment, making it an attractive sourcing destination.
- Strategic Location: Thailand’s strategic location in Southeast Asia is 2,800 Nm closer to Europe than Shanghai. It has well-connected transportation networks, including modern ports and airports.
- Diverse Product Range: Thailand offers a diverse range of products suitable for sourcing. Textiles, Food products, and Agricultural commodities like rice and rubber are all part of Thailand’s strong agricultural heritage
- Cost-Competitiveness: Thailand offers competitive production costs compared to many Western countries. Whilst it has the 9thlargest Labour force in Asia, it is also has an ageing population. Governmental response to this is to invest in Educational participation for all age groups to build human capital.
- Quality and Standards: Thailand has made significant efforts to improve the quality and standards of its products. The country has established a robust legal framework and regulatory systems to ensure product quality and compliance with international standards.
- Trade Agreements: Thailand is a party to various regional and bilateral trade agreements, including the ASEAN Free Trade Area (AFTA), which provides preferential market access to member countries. It also has free trade agreements with several countries, such as Japan, China, Australia, and New Zealand, which further facilitate trade and reduce tariffs. It has relaunched trade talks with the EU with the ambition to deliver an ambitious, modern and balanced free trade agreement. EU Free Trade Negotiations
- Cultural Factors: Thailand’s rich cultural heritage, skilled craftsmanship, and traditional industries like textiles and handicrafts make it an appealing sourcing destination for unique and artisanal products.
- Business Environment: Thailand offers a relatively stable political and economic environment, attracting foreign investment and fostering business opportunities. The Thai government has implemented various initiatives to support entrepreneurship, innovation, and foreign investment, making it conducive for sourcing activities. The World Bank ease of doing business index has Thailand at 21 out of 190 economies.
Summary
Thailand offers great opportunities for companies Sourcing Strategies. However, it’s important to note that sourcing from Thailand also comes with challenges. Language barriers, cultural differences, intellectual property protection, and ensuring supply chain transparency are factors that require careful consideration and management.Conducting thorough due diligence, establishing clear communication channels, and working with reputable suppliers are crucial steps to ensure a successful sourcing experience in Thailand. ET2C Is a Global Sourcing company with over twenty years’ experience working with our clients to deliver their Sourcing Strategies. Our offices in seven countries ensure you always have a team on the ground to be your bridge to your Offshore suppliers. Giving you independent feet on the ground and confidence with fast responses, removing time zone and language challenges.If you would like to explore sourcing opportunities within Thailand or to discuss your future supply chain challenges. Please contact@et2cint.com
