Smartphones on the cusp of overtaking feature phones in Thailand

Thailand has been known to be a huge feature phone market, just like Indonesia. However, a release published by GfK Retail and Technology Asia proved that the Southeast Asian country with some 69 million people is getting increasingly tech-savvy. The report reveals that in the first quarter of 2013, a total of 2.87 million smartphones were sold in Thailand.

According to the survey results, “two in every five mobile handsets sold was a smartphone.” Not only has sales doubled from one in every five handsets two years back, findings also stated that it all started in early-2012. Apparently, consumers in the nation started spending more than US$800 million on smartphones in that year alone.

Sales for feature phones took a dip of over 11 percent, compared to the previous year. Revenue figures also revealed the surge of smartphones in the country. Previously, feature phones had accounted for 40 percent of the total handset market, and now, only a meagre 15 percent.

Wichit Purepong, managing director for GfK in Thailand said that there is a growing demand for these smartphone handsets since the second quarter of 2012. He added, “This growth has been purely contributed by smartphones, which registered the greatest spike of 24 percent in volume sales in the first quarter of this year over the quarter before.”

Northeast as fastest growing region in Thailand

While Bangkok might have the most number of smartphones, the Northeast region — in this case Isan — has been reported to be the fastest-growing region in Thailand when it comes to these devices. GfK findings for the first four months of 2013 showed that smartphone sales units across a total of 17 provinces there had increased three times as compared to the year before, exceeding the momentum in both central and western regions.

Purepong explained that the northeast region has the largest population numbers and size in Thailand, but still remains as the least developed. It has the lowest average income in the country, and that itself is quite a blessing. Many of the natives would often leave for other parts of the country to find a better paying job. He added, “However, the establishment of new industrial estates after the heavy flooding of 2011 has attracted the labor force back to northeast, fuelling higher demand in this case, for smartphones, since mid of 2012.”

Price is also another determining factor, as findings reveal: the average price of a smartphone might cost about US$300 in most affluent areas in central or western regions, but in the northeast region, it would probably cost about US$230. Purepong also said that they will be anticipating the adoption of smartphones to bring in at least 70 percent of growth in value to drive the handset market in 2014.

More opportunities for those outside of Bangkok

One might ask whether the city of Bangkok is really representative of the whole of Thailand. Probably not. A quick train ride down to the less-developed provinces would open your eyes to what the rest of the country is looking at. However, this surge of smartphones, especially in the northeast regions, would mean more opportunities for startups looking at targeting those outside of the capital. For many Thais living in these areas, their first Google search, Facebook status, or Skype call would be on a smartphone, not a desktop.

However, there will definitely be an array of challenges for anyone trying to venture into these provinces. Things like literacy rates, purchasing power, level of innovation and adoption definitely will play a part but it’ll be exciting to know that there is this huge market, full of potential, just waiting to be tapped on by startups, conglomerates, banks and other major players.

This article by Elaine Huang originally appeared on e27, a Burn Media publishing partner.