Thailand has re-entered the Global Retail Development Index (GRDI) released by management consulting firm A.T. Kearney today. The GRDI, now in its 16th edition, ranks the top 30 developing countries for retail investment worldwide.

The Index analyses 25 macroeconomic and retail-specific variables. The study is unique in that it not only identifies the markets that are most attractive today, but also those that offer future potential.

Thailand’s re-entry into the Index has been driven by a boost from a record 33 million tourists in 2016. The government is pushing hard for tourism, with related revenues expected to grow by 10 percent this year. The expected influx of foreign tourists, coupled with rising consumer incomes, is expected to provide a boost to the retail sector, which is forecast to grow 6 percent per year through 2020. “Thailand’s young population is driving the country’s consumption growth. The convenience sector, popular with young urban consumers and those with rising incomes, is growing as it caters to consumers’ busy lifestyles with services such as bill payments, mobile top-ups, and free Wi-Fi. 7-Eleven, for example, has more than 9,000 stores in Thailand, its largest market (by store count) outside of Japan,” said Soon Ghee Chua, Partner and Head of Southeast Asia at A.T. Kearney.

“E-commerce is also on the rise thanks to a young population, high mobile penetration and heavy access to mobile data. This is evident from the fact that 50 percent of e-commerce transactions are now happening on the mobile platform. This has been encouraging e-commerce giants to enter Thailand, which will likely further improve the overall shopping experience, as well as bringing more variety to consumers,” he added. Alibaba has announced it will bring more Chinese products to sell through Lazada, whose third biggest market is Thailand.

Ezbuy, a Singaporean e-commerce website, has also expanded its footprint. In April 2016, retail giant Central Group acquired online fashion seller Zalora’s businesses in Thailand and Vietnam to expand its e-commerce presence in the region. Asia Pacific is the most dynamic region in the Index. Accounting for five of the top ten countries. India leads the way with a rapidly expanding economy and a consumption boom.

China, long the Index leader, drops to second place as the market matures, but the country still leads the pack in other areas, most notably e-commerce. Vietnam moves ahead and is emerging as an important market for retail expansion with its liberalized investment laws. Elsewhere in the region, there has been steady growth in modern retail, despite economic headwinds like Malaysia’s depreciating currency and Indonesia’s rising inflation.