THAILAND
ASHLEY HIMPEL GLOBAL SOURCING 420 PROFESSOR DON LEVY COUNTRY REPORT
TABLE OF CONTENTS
History & Country Traits Education Ethnic Makeup Work Wage Government Country Overview Religion & Culture Country Stability Textile & Apparel Industry Climate Trade Agreements Transportation Suppliers Shipping Companies Business Etiquette Risks & Benefits
HISTORY & COUNTRY TRAITS LOCATION: Southeast Asia, and borders Cambodia, Laos, Burma, and Malaysia by land and Indonesia, India, and Vietnam by sea. CAPITAL: Bangkok LANGUAGE: Thai POPULATION: 68.86 million people GENDER BREAKDOWN: Male: 33,665, 000 Female: 35,373, 000 CURRENCY: Baht HEAD OF STATE: Maha Vajiralongkorn MEDIAN AGE: 38 years RELIGION: Buddhism
HISTORY OF THAILAND: Until the second half of the 20th century, Thailand was primarily an agricultural country, but since the 190’s increasing numbers of people have moved to Bangkok, the capital and other cities. U.S is Thailand’s largest export partner and the third-largest supplier after Japan and China. The country has also increased its exports in some of its non-traditional export markets, including India, China and the Middle East. Major markets include North America, Japan and Europe which helped boost growth in Thai export.
IMPORTS from the U.S.A Electrical machinery equipment: 19.7% Mineral fuels and oil: 13.4% Computers: 13.4% Plastics: 4.1%
MINIMUM WAGE: Ranges from 300 baht per day (Employers in Thailand who fail to pay the minimum wage may be subjected to punishment by Thailand’s government) CLIMATE: Tropical with a mean annual temperature of 82 degrees Fahrenheit and high humidity TOTAL AREA: 513,120 sq km LITERACY RATE: Male: 94.7% Female: 91.2% GDP: $406.8 BILLION USD GDP PER CAPITA: $5.9 MILLION USD LIFE EXPECTANCY: Average of 75 years
EXPORTS to the U.S.A Textiles: 90% Rubber: 5.7% Machinery: 17.4% Electrical appliances: 13.9% Jewelry and Gems: 6.6% Agriculture: 10%
EDUCATION Education in Thailand is provided mainly by the Thai government through the Ministry of Education from pre-school to senior high school. A free basic education of twelve years is guaranteed by the constitution, and a minimum of nine years school attendance is mandatory. The linking of government sponsored education to economic development goals in the 1960’s precipitated a radical transformation in Thailand’s educational system in the last decades of the 20th century. By the early 21st century, education had been made mandatory for nine years or until a person reached the age of 16, and three years of high school were provided by the government. Universities, state and private institutions are spread across the country. There are a lot numerous teachers’ colleges, as well as open universities, military and police academies, and universities for monks that offer bachelor’s degrees. Students who do not wish to attend university obtain further education in business and technical schools. Thailand has one of the highest literacy rates; nearly universal for both men and women. English is widely used in Thailand for commercial and many official purposes. It is required school subject from the primary grades on up. More children are now getting more years of education, and virtually everyone is now covered by health insurance while other forms of social security have expanded.
ETHNIC MAKEUP Thai 75%
Chinese Other 14% 11%
Ethnic majority and the main ethnic group in Thailand is Thai. Formerly known as Siamese, this ethnic group is native to Southeast Asia. The Thai people speak the Thai language of different variations in different regions. This group includes central Thai, northern Thai, southern Thai, and Islam people. The Chinese is greatly engaged in business and commerce throughout the country. Modern central Thai has become more dominant due to official government policy and is the second largest ethnic group in Thailand.
WORK WAGE The 2017 minimum wage rate has been raised to 310 THB ($9.33 per hour). The system has been adjusted to match the cost of living, inflation and work efficiency. This is the first time the national minimum wage has been adjusted since 2013. “Skilled Workers” are entitled to higher minimum wages, as of April 2017. For specific professions, the minimum wage rates will range between THB 370 to THB 600 per day ($11.13 USD or $18.05 USD) depending on he worker’s skill level. These professions include technicians, welders, and anything working with mechanics. Labor in Thailand Agriculture: 40.7% Industry: 13.2% Services: 46.1%
In terms of regional distribution, the North had the lowest rate of labor force growth, followed by the Northeast. Regional growth of the labor force is dependent partly on educational level. In Thailand and the AsiaPacific, the concentration of women in exportdriven industries such as garments, textiles, and electronics is much higher than men.
GOVERNMENT BACKGROUND: 1932 is when Thailand became a constitutional monarchy in which the Thai King serves as Head of State and spiritual leader of the country, but wields no outright political authority. The King of Thailand has little direct power, but under the constitution is considered a symbol of national identity and unity. Thai people are politically active and place high value on importance of hierarchy. The Thailand government rules similar to the United Kingdom, in which a Prime Minister serves as head of parliamentary government and a hereditary Thai king functions as Head of State. In May 2014, the Thai military suspended the constitution and took control of the government in a coup d’état. The current administration announced its intent to hold general elections in 2018 once the constitution is in place. Lack of transparency in government procedures are major concerns for U.S companies. Despite this commitment to transparency in government procurement, U.S companies and the Thai media continue to report allegations of irregularities. For most people in Thailand, government is experienced primarily through centrally appointed officials who hold positions in local administration. The king is highly revered in Thailand and spoken of only the most respectful way, and the same respect is expected of foreigners.
THAILAND’S MAIN EXPORTS TO THE U.S.A Computers $18.3 billion Automotive $360.6 billion Rice $4.4 billion Refined Petroleum $6.19 billion Precious Metals $10.5 billion Plastics & Rubber $24.9 billion Textiles $7.8 billion
TOTAL VALUE OF EXPORTS TO USA: $29.5 BILLION TOTAL VALUE OF IMPORTS FROM THE USA: $10.5 BILLION
COUNTRY OVERVIEW Over the last four decades, Thailand has made a lot of progress in social and economic development, moving from low-income country to an upper-income country in less than a generation. Therefore, Thailand has been one of the widely cited development countries, with sustained strong growth and impressive poverty reduction. However, Thailand experienced slow growth from 2013 to 2015 as a result of domestic political turmoil, and sluggish global demand, which curbed Thailand’s traditionally strong exports, electronics, agriculture, automobiles and food. Thailand, is the second largest economy in the ASEAN after Indonesia and an upper middle-income country with an open economy. The country is the 28th largest export destination for the United States. Thailand is an export-dependent economy, with the United States being the countrys’ number 1 export market. Internal migration from the countryside to Bangkok has produced major changes in society. Bangkok has received a major share of all interregional migrants, mostly from the central and northeast regions. As a result, these migrants are mainly young adults less than 30 years old. Patent and trademark infringement is common in Thailand and U.S companies have successfully protected their intellectual property through litigation in the Thai courts, but these cases can be extremely costly and time-consuming. The use of internet and mobile devices in Thailand have resulted in a large increase in online pirated goods, as well as counterfeit products.
FUTURE ECONOMIC OUTLOOK Thailand’s economy remains caught between a strong external position and fragile domestic economy. Despite solid import growth, private consumption remains sluggish as high household debt and weak job growth. Expected to grow 3.1 trillion baht ($9.1 billion USD) in global tourism revenue for 2018 with travelers coming from Chinese and European cities. Thailand maintains an open, market-oriented economy, and encourages foreign direct investment as a means of promoting economic development, employment and technology transfer. Thailand’s economic growth has created opportunities for U.S companies in a number of infrastructure sectors including electrical power, telecommunications and renewable energy.
UNEMPLOYMENT RATE: 1.2% LABOR FORCE: 38.9 million people CURRENCY EXCHANGE: 1 Thai Baht equals 0.030 US Dollar. The baht is the currency of Thailand. It is subdivided into 100 satang. INFLATION RATE: 0.19% TRADE DEFICIT (Thailand and the United States): $18.9 billion
RELIGION & CULTURE RELIGION: Although Buddhism is Thailand’s state religion, freedom to practice the religion of one’s choice is guaranteed by the constitution. Throughout Thailand, nearly 30,000 temples stand as places of worship. They contain libraries of religious works, centers of celebration, and education. Buddhists holidays occur regularly throughout the year, (especially on days with full moons) and many Thai people go to the temples on these days and other important days to pay homage to the Buddha. Meditation, one of the primary practices of Buddhism, is a means of self reflection in order to identify the causes of individual desire and to alleviate ones suffering. By its very nature, Buddhism is a compassionate and tolerate religion and Thai people are very respectful of the religious beliefs of others and are very open in terms of discussing their Buddhist values with visitors.
CULTURE IDENTITY: Much of Thailand’s culture comes from the ethnic Thai people. One of the most important influences on Thai culture has been Buddhism. Hinduism has also made important contributions to Thai culture, and the close links between Thailand and India can be seen in art, literature, and many Thai customs.
MEDITATION: Buddhist meditation explores a variety of techniques that aim to develop mindfulness, concentration, tranquility, and insight. Most Buddhist traditions recognize that the path to Enlightenment entails training and use meditation as a tool to gain power to their own direction.
HOLIDAYS & CELEBRATIONS
93.6% BUDDHISTS 4.9% MUSLIM 1.2% CHRISTIAN 0.2% OTHER
Thailand is referred to as “The Land of Buddhism”, the best country in the world for those looking to study the teachings of Buddha. Buddhism makes its way into everday life in Thailand. In Bangkok, there are two Buddhists universities with several thousand monk students. Every man in Thailand is required to become a monk for a period of time before the age of 20. Many festivals and holidays revolve around the major religion of Thailand. One in specific is called Makha Puja, where Buddhists gather at temples and light candles during the full moon in February for this nationwide festival.
• • • • • • • • • • • • • •
Asahna Bucha Day Chakri Day Chulalongkorn Day Constitution Day Coronation Day Khao Phansa Day Her Majesty’s Queen’s Birthday His Majesty’s the late King’s Birthday King Vajiralongkorn’s Birthday Makha Bucha Day New Year’s Day Royal Ploughing Ceremony Songkran Festival Visakha Bucha Day
Songkran is one of the biggest and most important Thai holidays. The three day celebration is combined with the weekend to make a five day break. This holiday is celebrated with parades, religious ceremonies, and festivities throughout the country and water plays a big part for this holiday. The water represents symbolically washing sins away and blessing friends. Local ceremonies, monk’s initiation ceremony, music concerts, participating in prayer at a wat, (local temple), to pray and give food to monks are a few examples of celebrations Thai people take part in. If a public holiday in Thailand falls on a weekend, the following working day is substituted as a holiday.
COUNTRY STABILITY Thailand is in national mourning after the death of King Bhumibol Adulayadej, the world’s longest reigning monarch, and has profound implications for Thailand’s political and economic stability. As Thailand modernized into one of the leading South East Asian economies in the 1990’s, the Bangkok political, business and academic elites accepted that the country prospers “under an authority around which all elements of the country can rally.” The Thai King has become so important for political stability, his passing can cause an impact in the confidence of the Thai economy of investors. Political instability continues to undermine the investment climate and hold economic activity far below potential levels. Well-developed infrastructure. Free-enterprise economy. Pro-investment policies. Highly dependent on international trade, with exports accounting for two-thirds of GDP. The average tariff rate is 3.6 percent and the government has started to undertake measures to facilitate trade. Over the past few decades, Thailand has sustained strong growth and has reduced poverty substantially. Poverty declined substantially over the last 30 years from 67% in 1986 to 7.2% in 2015. Thailand’s economic fundamentals are sound, with low inflation, low unemployment and reasonable public and external debt levels.
P.E.S.T.L.E ANALYSIS POLITICAL:
ECONOMIC:
The Prime Minister is the Head of Government and holds all the executive powers. It is run as a constitutional monarchy. The polarization of Thai society has grown considerably over the past two decades and society is driven by fear and an uncertain future of government power. Thai people have to be wary about making any type of political statements in public, especially with the new reigning monarch. Mass protests, airport closures and the military coup have caused political controversy over the past few years and is still on-going. Also, with the unstable political factor, investors from other countries are pulling back and reluctant to trade with Thailand.
Mixed economy, meaning the government plays a part in several economic activities while most activities are still run by private companies. Major economic sectors include agriculture , textiles automotive parts and natural resources. The government still focuses on rice farming, which is a key industry to Thailand’s growth.
SOCIAL: Thai culture is connected to Buddhism with more than 96% of the population being Buddhists. There is religious freedom and no pressure to commit to any belief system or religious practices.
LEGAL: Thailand’s legal system combines principles of traditional Thai and western laws. The government holds a very liberal attitude towards international business and trade. The WTO and ASEAN organizations commit Thailand to the reduction and eventful removal of tariffs, duties, and non-tariff barriers to trade in an acceptable time frame.
TECHNOLOGICAL: The rise of the digital economy is continuing to transform Thailand. Mobile devices and services are affordable and widely used by a vast majority of people. However, at the same time technical digital skills can improve. More than 90% of internet users in the country go online via smart-phone. The second most popular device for internet access was the desktop, used by just half of the internet users surveyed. However, the government and military control nearly all the national terrestrial television networks and operate many of Thailand’s radio networks. Thailand has competitive advantage in the biotechnology sector due to its position as one of the world’s leading agricultural countries, and one of the top five food exporters.
ENVIRONMENTAL: Vehicles and factories contribute to air pollution, especially in Bangkok. Environmental contamination caused by hazardous waste is a major threat to Thailand’s environment problem in the future. However, Thailand is a member of the International E-Waste Management Network (IEMN) hosted by EPA and EPA Taiwan with hope to reduce electronic waste and form strategies to do so.
TEXTILE & APPAREL INDUSTRY
OVERVIEW The textile and apparel industry in Thailand plays an important role in the country’s GDP and export earnings. They export $7.8 billion worth of textiles per year, and has more than 2,000 garment companies which are located around Bangkok and eastern Thailand. This industry has become an integrated and diverse industry that covers a wide range of products, including everything from synthetic yarns, to wool fabrics, cotton, technical textiles, t-shirts to high-end fashion garments. Thailand is well-known for being one of the world’s largest producers for fabric, sportswear, kids wear, womens-wear and casual wear. Therefore, with the country’s finishing, dyeing, and printing services also make it one of the most popular textile outsourcing destinations in the global market. Thailand currently has around 4,500 textile and apparel manufacturers employing almost one million workers. Most of Thailand’s textile companies are part of the ASEAN’s integrated textile supply chain.
CHALLENGES One of the biggest current challenges in Thailand’s textile industry faces is the lack of domestic demand, mainly caused by low domestic purchasing power, which forces Thailand to see its textile and apparel products to foreign markets. Another big challenge is the lack of raw material in its garment production. Despite these challenges, the National Federation of Thai Textile Industries still believes that its country’s textile and apparel industry has strong potential to grow and add higher value. Consumer demand will accelerate further over the coming years, with real household spending to set to average 4.1% through 2021, compared to 1.7% between 2013 and 2016. Analysts have predicted that a smooth transition to King Maha Vajiralongkorn’s and his ceremony is expected to take place before the end of the year, while maintaining political stability would support the economy’s growth.
OUTLOOK ON GARMENT INDUSTRY Although Thailand’s textile industry was founded on low-cost labor, today the government and the private sector are concentrating on making the industry more competitive by encouraging further innovations, modernizing technology for greater efficiency and improving the skills of the nation’s garment and textile business. Textiles and apparel are among Thailand’s top 30 exports to the United States. Their largest export is cotton and they are one of the largest headquarters for Cotton USA where they do 100% of the dyeing and produce 100% of compact cotton yarns, among other products. Thailand is not just known for their textile mills, but are known for the creation of new kinds of materials. With money invested in the creation of synthetic fibers, and using combinations of natural ingredients, Thailand has become a go-to country for new and exciting ideas. Fashion retailers are starting to look forward to the future and highly optimistic that consumer spending will finally start to recover. The future of the country is dependent on tourism which is fore-casted to see strong growth. The death of the Thai king has introduced a hurdle for the retail sector in Southeast Asia’s second-biggest economy, where consumer and tourist spending has been subdued during the grieving period. Total household spending on clothing and footwear grew only 1.9% from 2016 to 2017, compared with 5.7% from 2015-2016, according to data from global research firm BMI. Luxury brands in Thailand have changed their store and window displays to align with the mourning period. All window displays were changed to black and white.
S.W.O.T ANALYSIS: THAILAND’S TEXTILE INDUSTRY STRENGTHS:
WEAKNESSES:
• High growth rate • Reliable quality of fabrics • Existing trade relationships within ASEAN markets, especially Vietnam and Cambodia • Production of cotton • Skilled workforce
• Thai textile mills are generally not flexible in product development, especially on fabric samples preparation • There are no definitive, reliable or upto-date textile and apparel customer databases or business directories in the ASEAN market • Competitive market
OPPORTUNITIES:
THREATS:
• Growing demand and economy • Income level is at a constant increase • New acquisitions
• • • •
External business risks Growing competition High bargaining power of suppliers Lower profitability
CLIMATE The major influences on Thailand’s climate are its location in the tropical monsoon zone of mainland Southeast Asia and certain topographic features that affect the distribution of precipitation. Nationwide, temperatures are relatively steady throughout the year, averaging between 77 and 84 degrees Fahrenheit. Thailand has its rainy period during the cool season, resulting in the moisture picked up by the northeast monsoon winds while passing over the Gulf of Thailand. ENVIRONMENTAL FACTORS:
• • • • • •
Climate Change Intensive Farming Water Pollution Air Pollution Resource Depletion Tsunami’s
In the past few decades, environment in Thailand has become more and more troublesome, as Thailand has been transforming from a traditional agricultural country to an industrial development country. Climate change threatens three major sectors of Thailand’s economy: agriculture, tourism and trade. SEASONS IN THAILAND:
• Hot • Cool • Wet 6 months of rainfall during the wet season 3 months of dry and cooling breezes 3 months of heat during the hot season
IMPACT ON PRODUCTION Thailand suffered more than $1.75 billion in economic losses related to floods, storms, and droughts. The effects of climate change, including higher surface temperatures, floods, severe storms and sea level rise put Thailand’s rice crops at risk and threaten to submerge Bangkok within twenty years. Agriculture plays a big environmental role with adapting to new soil conditions, erratic weather patterns and changing water availability. RICE PRODUCTION: An essential component of Thailand’s economy and culture. The water pollution damages plants and affects harvesting of the rice. Adaptation to climate change is really important during this development. 16 million of Thailand’s agricultural workes are rice farmers. This production determines food security for many countries, as it is the only major grain grown specifically for food. The drought has contributed to concerns of a global food crisis and high grain prices.
LOOKING AHEAD: Developing disaster prevention strategies which will allow Thailand to maintain its economy and culture. Bangkok is encouraging commuters to leave their cars at home by imporving its mass transit system, constructing bike lanes and pedestrian walkways and implementing environmental fees on gasoline.
TRADE AGREEMENTS THAILAND’S MEMBERSHIP IN INTERNATIONAL ORGANIZATIONS: • • • • • • •
United States-Thailand Free Trade Agreement ASEAN Regional Forum Asia-Pacific Economic Cooperation forum Partnership and Cooperation Agreement (PCA) Thailand-European Union Free Trade Agreement Thailand-Chile Free Trade Agreement Japan-Thailand Economic Partnership Agreement
U.S PARTNERSHIP WITH THAILAND: Thailand is a key U.S security ally in Asia, and the country’s stability and growth are important to the maintenance of peace in the region. The United States and Thailand meet regularly under the auspices of the 2002 bilateral Trade and Investment Framework Agreement to discuss ways to expand trade and address issues, including intellectual property, customs, and agriculture. Since World War II, the United States and Thailand have significantly expanded diplomatic, security and commercial relations. In 2003, the United States designated Thailand a Major Non-NATO Ally. The United States and Thailand have a partnership that focuses on the areas of public health, trade, science and technology, wildlife trafficking, education, and law enforcement. Both countries work closely together and with the United Nations to halt illicit trafficking and other criminal activity. Over the past decade, two-way trade has grown by more than 36%, with U.S exports to Thailand increasing by more than 30% to $10.6 billion.
In January 1992, Thailand signed the Framework Agreement on Enhancing ASEAN Economic Cooperation. The goal of this agreement was to establish an ASEAN Free Trade Agreement (AFTA). ASEAN is a political and economic organization of Southeast Asian countries that aims to accelerate economic growth, social progress, and sociocultural evolution. Thailand, among with other ASEAN members, is currently engaged in negotiations with China, Korea, Japan, Australia, New Zealand and India to form a Regional Comprehensive Economic Partnership Agreement (RCEP).
ASEAN MEMBERS: • • • • • • • • •
Indonesia Malaysia Philippines Singapore Brunei Cambodia Laos Vietnam Myanmar
TRANSPORTATION Bangkok is the center of Thailand’s water, land, and air transport systems.
LAND
In Bangkok, besides taxis, there are several public transportation methods such as the metro, sky-train, buses, and boats. Bus is the most popular mean of transport and the most used by Thai people. Twenty towns in Thailand have an airport with at least one connection to Bangkok. Tuk-tuks, also known as three-wheelers are used for short distances in most Thai cities. This type of transportation is found everywhere in Bangkok and can take you most places.
There are currently large multi-year public infrastructure projects related to dual tracking of railways, and regulatory reforms aimed at improving ease of doing business. A large number of buses, minibuses and taxi’s share the streets with private vehicles.
Modes of Transportation: • • • • • • • •
Skytrain Taxi’s Tuk Tuk Motorcycle Taxi Songthaew Bus Subway Train
AIR
SEA
Air travel is a common way to get around because of Thailand’s seven international airports and two main ones which are Don Mueang Airport and Suvarnabhumi airport. Thai Airways International- founded in 1959 and has been operating since 1968 and now markets itself as “Asia’s Botique Airline”. To cope with increasing passenger and cargo throughput, the government has developed an infrastructure plan to expand these airports and increase its annual capacity to 60 million passengers.
Thailand has two long coastlines-the Gulf of Thailand and the Andaman coast islands. The long-tail boats are a main transport on rivers and canals in Bangkok and neighboring provinces. Thailand also has six deep sea ports and two international river ports. With this accessibility, Thailand can transport goods more efficiently and effectively.
APPAREL & TEXTILE SUPPLIERS Thai T-shirt Factory Co., Ltd. One of the most experienced screen printing factory and t-shirt manufacturer in Thailand. Their main markets are Southeast Asia, Australia, Western Europe and the United States. A few services provided include design, silk screening and printing, embroidery, custom label and hangtags and sampling. www.tshirtfactorythailand.com +66 89 214 7449 Textile Company-Business Service
Amarisas International Co., Ltd. Established in 2008, Amarisas highest goal is to create high quality clothing and provide innovative manufacture solutions for handmade manufacturing. Clothing factory manufacturer that is popular among foreign fashion retailers, independent designers and wholesalers. They specialize in vintage dresses and tops, maternity wear, men’s shirts, fabric prints, and children’s clothing. www.amarisas.biz +66 84 538 4083 Clothing Manufacturer
Come Prima Fashion Garments Co., Ltd. Established in 1987, Come Prima Fashion is a producer of all kinds of high quality fashion apparel, street wear, uniforms, jackets, shorts, and jeans made of cotton for both men and women. They specialize in all kinds of prints, and embroideries. Their factory is located in Prakanong, Bangkok, producing around 500,000 pieces of clothing with exports to the United States, Australia, Europe and local customers in Thailand. www.comeprimafashion.com +66 2391 4257 Clothing Manufacturer
KEY SHIPPING COMPANIES COSCO: Ajc International, Inc. 5188 Rosewell Road, Atlanta, GA 30342, USA +1 404 252 6750
APL: American Auto Logistics. 671 New York 17 M, Monroe, NY 10950, USA + 1 845 783 7081
FREIGHT CHARGES:
ZIM:
Bangkok-------------Los Angeles----------- Savannah
Bangkok-Thai Star Shipping Co. 3354/46-47, 14th Floor, Manorom Building, Rama 4 Road Klongton, Klongtoey, Bangkok 10110, Thailand
TO LOS ANGELES: $3,132 USD TO SAVANNAH: $761 USD TO LOS ANGELES:1 MONTH TO SAVANNAH: 22 DAYS
LEAD TIME OF PRODUCTION:
Drought
Floods
Tsunami
Cyclones
NATURAL DISASTERS Weather conditions that impact lead time of production are droughts, floods, tsunami’s and cyclones. While droughts and floods are more common in Thailand, tsunami’s and cyclones still cause a threat in the shipping process.
BUSINESS ETIQUETTE CULTURE & VALUES It’s important to be familiar with the traditional gestures that the people in Thailand respect. One common way is to place your palms together in a prayer-like position. Other ways of showing respect is removing shoes before entering a home or temple, which is always practiced among Thai people. Their culture is deeply influenced by religion, so their belief system and values of Buddhism play a big role in day-today life. Throughout the country, the most important values that Thai people hold to are respect, self-control, and a positive attitude.
The Thai culture values of patience and respect for authority are significant factors in business relationships. Thailand feels great pride for their country and have a deep respect for tradition. Thai people prefer to build personal relationships before discussing business. Appointments are necessary and should be made one month in advance. It is likely that it will take several meetings and discussions will need to take place before any kind of business gets started. Arriving on time shows the people of Thailand respect and is expected at all times. During the meeting you are required to remain standing until told where to sit, as the hierarchical culture has strict rules about rank and position in the group. Business cards are an essential part of making business contacts in Thailand, and bringing a lot is a general form of introduction. It should be offered with the right hand and take the time to read the card to make a polite comment about it. Many of the country’s largest business are owned by people of Chinese or Sino-Thai heritage, and family links remain an important part of business culture.
Individuals embarking on a negotiation with Thai counterparts should bear in the mind the importance of personal relationships when conducting business. Since it takes time to develop trusting relationships, it is essential that you do not rush the meetings and approach the topic of business prematurely. It is not unusual for the first few meetings to take place in restaurants or bars to facilitate initial relationship building. Your Thai counterpart may avoid confrontation or seek to save your “face” by seeming to agree with something that they are not actually in agreement with, so understanding the communication style of the Thai people is really important.
DRESS CODE: In business, Thai people tend to follow a formal dress code. Causual wear should not be worn for business meetings and attire should be kept conservative. Men should wear dark suits, white shirts and a tie. Women should wear plain conservative dresses or suits. CONCLUSION: Understanding the customs and business etiquette of a particular country is essential when looking to conduct business. Knowing about the different traditions, values and practices is being respectful to the Thai culture when trying to form a relationship.
DOING BUSINESS WITH THAILAND RISKS: Threat of terrorism within the country. Political instability. Discrimination against foreign workers. Dependency on garment exports to keep wages down. Fluctuations of money markets.
BENEFITS: High demand drivien by wellestablished and growing user-base. Economic expansion. Diverse manufacturing sector. Large, adaptable and cost efficient workforce. Readily available and affordable infrastructure.
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