Thailand FMCG growth weakens as competition rises and consumers turn cautious

Competition is increasingly driven by local manufacturers.

Thailand's fast-moving consumer goods (FMCG) sector is showing weaker growth as competition intensifies with the entry of new manufacturers and brands.

Speaking at the Retail Asia Summit Thailand 2026, Chonajuk Kasemsuwan, director for retail vertical customer success for Malaysia and Thailand at NielsenIQ, outlined three key areas of focus, namely regional technology trends, Thailand’s FMCG and tech-and-durables performance, and the potential impact of ongoing global geopolitical tensions.

He said that in Thailand’s FMCG industry, competition is becoming more intense as local producers expand their market share alongside multinational companies.

“There’s a lot more local brands [and] local manufacturers entering the market,” Chonajuk said, adding that competition is no longer dominated by global companies alone.

APAC growth eased from 3.8%in 2024 to 2.2% in 2025, with much of the expansion attributed to price increases rather than higher consumption volumes, he said, citing NielsenIQ data.

Chonajuk cautioned that this imbalance signals weaker underlying demand. “We want to make sure that volume also grows as well, not just price,” he said, noting that consumption remains a key indicator of market health.

Whilst e-commerce continues to grow across the region, he said the main challenge lies in integrating online and offline channels more effectively.

“The main point here is more on how we actually make it more integrated between online and offline channels,” Chonajuk said, pointing to changing consumer expectations around seamless shopping journeys.

Thailand’s gross domestic product is expected to ease slightly from 2.5%to 2.4%, with tourism weakness and geopolitical uncertainty weighing on sentiment.

Chonajuk noted that forecasts remain fluid amidst global risks.

“We are not predicting that it's gonna be a low growth, just because of all these,” he said. “Global conflicts, economic issues that's happening.”

In FMCG, growth has already flattened significantly, with near-stagnant performance in 2025, signalling a difficult operating environment for both retailers and manufacturers.

Despite rising promotional activity across categories, NielsenIQ observed declining effectiveness.

“Promotion is another point that most retailers and manufacturers do or execute, but we also see that promotions are becoming more numb to the consumers and are becoming less effective to the consumers,” said Chonajuk.

He suggested that more targeted, personalised approaches, potentially enabled by artificial intelligence, may be required to restore effectiveness.

A key behavioural shift highlighted was growing consumer caution amidst economic uncertainty.

“They stop buying some of the products and focus on the essentials,” he said. “Consumers are becoming more suitable, being more cautious in terms of how they spend their money.”

At the same time, purchasing decisions are becoming increasingly value-driven rather than purely price-sensitive.

Chonajuk said physical retail must evolve beyond transactions to focus on experience, product validation, and advisory roles.

“We need to make sure that our products are available and are available for testing,” he said.

He cited consumer demand for real-world validation, including product testing in-store before purchase, as evidence of rising expectations for hands-on retail engagement.

Chonajuk reiterated that consumer behaviour is undergoing a structural shift, driven by declining brand loyalty amongst younger shoppers, increased reliance on digital information sources, and a stronger emphasis on trust and validation.

He added that purchasing decisions are increasingly emotional, later justified by logic.

“We actually buy products based on emotion, and then we use logic or rationale just to justify,” he said.