The flow of FMCG products: distribution channels and household consumption

Urbanization in Thailand correlates with the rise of consumer income and higher internet penetration rates, providing more opportunities for the potential growth of the FMCG sector. Provision stores have recently become the leading source of FMCG product distribution. These stores include major chains such as 7-11 as well as smaller local stores. Distributing consumer products via e-commerce mediums is also becoming more common since urbanization has led to greater digitalized environments. In addition, the distribution of household expenditure on non-food products and alcoholic beverages such as housing items, transportation, medicine, and clothes are estimated at around 55 percent, implying that a large portion of household spending is spent on food. Recently, Thai consumers have been developing more awareness towards environmental-friendly and health-oriented products, leading to a variety of consumer goods to meet these demands, and changing FMCG brands’ strategies.

The influence of the COVID-19 pandemic on the FMCG market in Thailand

The coronavirus (COVID-19) pandemic has caused a shift within the FMCG sector. Purchase decisions for products in some categories have been delayed or stopped while there has been an increase in consumption for food products, especially for dry foods. Earlier in 2020, Thailand was among the leading countries in the Asia Pacific region in which food delivery services have become more sought-after than pre-pandemic. Consumers are also demanding more ‘zero touch’ experiences in FMCG retail. This includes virtual reality shopping experiences, drone product deliveries, and other technologically incorporated facilitating methods. Despite the ongoing pandemic, the Thai FMCG market has adapted to the changing demands and preferences of consumers.

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