A disruptive "catfish effect" is transforming Thailand's e-commerce landscape as TikTok leverages its massive user base to dominate online retail. Local businesses now face unprecedented pressure from the platform's rapid expansion, with industry leaders warning of emerging monopoly risks.
Flood of Low-Cost Imports Squeezes Local Retailers
Amid U.S. tariffs on Chinese goods, TikTok Shop has become a conduit for inexpensive Chinese products flooding the Thai market. This influx compounds challenges for domestic small and medium-sized e-commerce operators already struggling with intense competition. Traditional logistics providers like Thailand Post simultaneously face direct threats from cross-border platforms.
Content-to-Commerce Model Disrupts Traditional Players
TikTok's seamless transition from entertainment platform to shopping destination demonstrates the power of its influencer-driven ecosystem. Unlike conventional marketplaces such as Lazada or Shopee, the viral nature of TikTok's algorithm and creator partnerships enables faster market penetration and higher user engagement in commercial activities.
Shrinking Margins and Platform Control Alarm Sellers
Thai merchants on TikTok report deteriorating profitability as platform fees, advertising costs, and operational expenses escalate. Concurrently, TikTok's tightening merchant policies increasingly constrain sellers' operational autonomy—a trend that intensifies as the platform consolidates its market position.
Exclusive Logistics Deals Marginalize Local Providers
The platform's preferential partnership with Global Jet Express (J&T's Thai operator) has sidelined domestic courier services, disrupting traditional delivery networks. Industry experts criticize this arrangement as creating an uneven competitive landscape in Thailand's logistics sector.
Data Restrictions Raise Platform Dominance Concerns
TikTok's limitations on merchant access to customer information—including names, addresses, and contact details—are officially framed as privacy protection measures compliant with Thailand's Personal Data Protection Act (PDPA). However, critics argue these policies primarily strengthen TikTok's control over vendors while hindering sellers' ability to cultivate independent customer relationships.
Influencer Incentives Favor Chinese Imports
Industry analysts note TikTok's generous commission structure encourages Thai influencers to prioritize Chinese products, placing local manufacturers and independent importers at a competitive disadvantage. Quality concerns about some imported goods have further eroded consumer trust in the platform's marketplace.
Diversification Strategies Gain Urgency
E-commerce veterans recommend Thai retailers develop alternative sales channels—including proprietary websites, dedicated landing pages, and chat-based commerce systems—to reduce platform dependency. Such diversification could help merchants maintain customer connections while mitigating business risks.
Fragmented Regulation Hampers Market Oversight
Critics highlight Thailand's disjointed e-commerce governance, with responsibilities scattered across multiple agencies including the Commerce Ministry's Domestic Trade Department, the Electronic Transactions Development Agency (ETDA), and the Trade Competition Commission. Experts urge enhanced interagency coordination and public-private collaboration to establish effective market monitoring mechanisms.
Legal Gaps Risk Making Thailand a Trade Transit Hub
Compared to neighbors like Indonesia and Malaysia, Thailand lags in cross-border e-commerce regulation. Without urgent legal reforms, analysts warn the country risks becoming merely a transit point for foreign goods—capturing minimal economic value while local businesses suffer. Recommendations include stricter quality controls on imports, robust local registration requirements, and comprehensive regulatory reforms.
Calls for Balanced Growth in Digital Marketplace
As TikTok reshapes Thailand's retail environment, stakeholders emphasize the need for equitable competition policies and responsive governance. Only through balanced regulatory frameworks and industry adaptation can Thailand preserve its e-commerce ecosystem's sustainability while nurturing domestic enterprise competitiveness.