Purpose - The purpose of this paper is to employ enclave economy in the perspective of economic sociology to explain the existence and process of the Thai enclave in Hong Kong.Design/methodology/approach - In-depth interviews and case studies are employed in relation to Thai restaurant and grocery shop owners and employees in Hong Kong. Findings - This study is an attempt to explain the clustering of Thai ethnic small businesses in Kowloon City through a discourse on the ethnic enclave economy. The Thai migrant enclave in Hong Kong is explored with dimensions of segregation, namely evenness, exposure, clustering, concentration and centralization (Massey and Denton's, 1988). This study suggests that these Thai enclave businesses have two differentials compared to the findings of Zhou (1992) in Chinatown restaurants in New York. Social implications - The findings provide evidences for social workers, migrant associations and policy makers in developing ideas of ethnic business enabling. There should be wide range of supporting and welfare policies for the empowerment ofmigrants and minority ethnic groups. An immigrant enclave should no longer be regarded as a ghetto for many business chances can be found there. Originality/value - Two ethnic economy development differentials are developed. First, ethnicity similarity between the minority group and the majority ethnic enables ethnic business accessing earlier to an interethnic clientele from wider society. Second, internal factors of the ethnic enclave and external factors of the wider society have constrained the diversification of ethnic business.