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Tag: department of internal trade

  • Lazada, Shopee and TikTok Cut Fees to Save Thai SMEs 1.93B Baht

    Lazada, Shopee and TikTok Cut Fees to Save Thai SMEs 1.93B Baht

    Lazada, Shopee and TikTok Shop agreed to roll back gross profit commission fees for Thai small businesses to January 1 levels for six months starting December 1, 2026.

    The temporary reduction runs through May 31, 2027, and is projected to save 1.2 million merchants an estimated 1.93 billion baht in operating costs.

    Wattanasak Sur-iam, director-general of the Department of Internal Trade, stepped in after the three platforms raised merchant commissions three separate times since January 2026. Those rapid hikes gave vendors little time to reprice stock or recalibrate working capital. Under the settlement, the rollback caps Lazada gross profit fees between 7.50 per cent and 11.60 per cent, sets Shopee rates from 8.03 per cent to 13.91 per cent, and pegs TikTok Shop fees at 11.24 per cent to 17.66 per cent depending on the product category. Electronics are excluded from the fee relief.

    Thresholds and Bureaucratic Hurdles for Sellers

    Access to the lower fee schedule comes with rigid revenue ceilings. Individual sole traders must record annual sales below 1.8 million baht, while registered legal corporate entities qualify only if yearly turnover stays at or below 3.5 million baht.

    Relief is not automatic. Sellers must file applications directly with the Department of Business Development, provincial commerce branch offices or local administrative councils to secure the discounted commission tiers.

    That administrative layer creates friction. Thousands of small operators run informal operations across social networks and marketplaces, meaning operators who fail to register through government channels will continue paying post-hike commissions during peak holiday trading.

    Margin Battles Shift from Subsidies to Extraction

    For marketplace operators across Southeast Asia, the fee battle reflects a sharp pivot from subsidised user acquisition to aggressive take-rate monetisation. Platforms spent years burning cash on free shipping vouchers and merchant onboarding bonuses to lock in domestic market share. Now, parent groups want positive free cash flow, and raising commission rates is the fastest lever to pull.

    Thailand has become the sharp edge of this regional pushback. When marketplaces simultaneously raise commissions multiple times in a single calendar year, merchant margins vanish faster than consumer prices can adjust. By enforcing a temporary rollback, state regulators are checking platform pricing power without dismantling the underlying commission models.

    The policy hands independent suppliers temporary margin breathing room. It does not solve the long-term risk for vendors who remain entirely dependent on three dominant digital distribution channels.

    Antitrust Intervention Precedes Statutory Controls

    Regulatory pressure had been building before the commerce ministry stepped into negotiations. The Trade Competition Commission of Thailand previously pushed platforms to freeze gross profit increases for a six-month window from August 27, 2026 to February 27, 2027.

    Supree Thongpetch, chairman of the Thai Small and Medium Enterprises Council, argued the registration mechanism should push informal vendors into formal commercial frameworks to improve transparency. He noted, “The solution lies in finding a balance among all business operators, as we are part of the country’s shared commercial structure.”

    Commerce Minister Suphajee Suthumpun confirmed the relief plan serves only as a stopgap measure. Ministries are reviewing the draft Digital Platform Economy Act, which officials first assembled in 2025, to write permanent statutory controls over platform pricing, business conduct and service benchmarks.

    Permanent Pricing Rules Await February Deadline

    State agencies will continue gathering stakeholder feedback on the draft digital platform legislation until February 27, 2027. Commerce officials plan to present the final assessment framework governing ongoing gross profit fees before the end of February.

  • Thailand Rejects 5 to 10 per Cent Consumer Goods Price Hikes for October

    Thailand Rejects 5 to 10 per Cent Consumer Goods Price Hikes for October

    Thailand’s Department of Internal Trade has rejected manufacturer requests for 5 to 10 per cent price increases on essential consumer goods scheduled for October 1. Director-general Wittayakorn Maneenetr confirmed on September 24 that the agency refused to authorise the proposed increases across packaged groceries and household staples.

    Field inspections and supplier audits across major consumer goods manufacturers showed no formal approvals for pending price increases, according to the regulator. The department maintains active surveillance over 16 core consumer products, while the Central Committee on Prices of Goods and Services enforces statutory price caps across 59 controlled categories. These categories include meat, eggs, milk powder, tinned fish, seasonings, soap, shampoo, and washing powder.

    Promotions Rolled Back and Ceilings Tested

    Price increases felt by consumers in recent weeks stem from retailers pulling back promotional discounts rather than statutory ceiling adjustments. Brands have withdrawn multibuy promotions, including buy-one-get-one-free and buy-three-get-one-free deals, which returns shelf prices to their standard retail baseline without altering registered price caps.

    Manufacturers have also adjusted wholesale rates within previously approved statutory bands. A product with a 60 baht ceiling previously selling at 50 baht can shift to 52 or 55 baht without requiring fresh regulatory approval, though suppliers must still notify the department. Department officials stated that competitive pressures continue to discipline store shelves, as brands cutting promotions too aggressively risk ceding volume to discounting rivals.

    Input Pressures on FMCG Brands and Foodservice

    For fast-moving consumer goods suppliers, the refusal locks margins against persistent transport, packaging, and raw material cost inflation. Suppliers unable to lift base prices must either absorb higher overheads or rely on packaging redesigns to defend unit economics across modern trade channels. Retailers face thinner promotional support from suppliers, forcing grocers to balance footfall targets against lower co-marketing allowances.

    The margin squeeze extends directly into the foodservice sector. Sorathep Rojpotjanaruch, president of the Restaurant Business Club, projected selective 5 to 10 per cent menu price increases during the fourth quarter of 2026. Restaurants face steep seafood procurement costs driven by high fuel expenses alongside seasonal vegetable price spikes during the October and November rainy period.

    A Pattern of Incremental Surcharges

    Upward pricing pressure on Thai grocery shelves began building in April 2026 as manufacturers flagged higher energy, transport, and raw material outlays. Secondary price adjustments followed at mid-year, culminating in another round of supplier requests in mid-September.

    Field surveys recorded shelf price shifts across seasonings and staples, with monosodium glutamate rising by 5 to 10 baht per pack and 500-gram grain packets adding 10 baht. Wholesale chicken tenderloin moved from 100 to 105 baht per kilogram, while pork belly traded at 182.50 baht per kilogram and standard table eggs sold between 4.35 and 5.19 baht each.

    The Department of Internal Trade is now preparing joint retail discount programmes under the government’s Thais Help Thais scheme to curb fourth-quarter household living costs.