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Best betting on Thai market
Best Inc, a Chinese logistics firm backed by e-commerce titan Alibaba, plans to invest 300 million baht in the second half to boost its express delivery service, Best Express, in Thailand.
The company wants to tap the booming logistics industry, buoyed by online shopping, in the wake of the pandemic.
The amount is part of the company’s five-year investment budget of 5 billion baht in Thailand, starting from this year.
The logistics market in Thailand is projected to rise 35% to 6.6 billion baht this year.
“We see the rise of logistics business in Thailand and Southeast Asia as the pandemic changes user behaviour towards online shopping,” said Jason Qian, chief executive and president of Best Thailand and Best Logistics Technology (Thailand) Co.
Thailand’s market for parcel delivery has grown from 2017 to 2019. Based on the latest assessment from Euromonitor, a compound annual growth rate (CAGR) of 40% is in line with the growth trend of the Thai e-commerce market, which has a CAGR of 18%.
Through the second half this year, the company aims to increase its parcel-sorting hubs from four to 10 and its couriers from 3,000-5,000 this year to 20,000 next year.
“We will recruit couriers, not only motorcycle riders, but also tuktuk and taxi drivers,” said Nattharak Dilokpitthhayarath, general manager of Best Thailand.
The company, which relies on a franchise model, uses Best Express service stations and aims to expand to more 800 franchises by year-end and over 2,000 in 2022. It currently has 500 franchises.
The firm handles 250,000 parcels a day and the number is expected to rise 10 times from 2019 this year, then double that figure in 2021.
Best chose Thai actor Nadech Kugimiya as a brand presenter.
Tony Zheng, general manager of Best Express, said the company knows it is a latecomer to the Thai market, but is gearing up to bring technology from China and offer a complete one-stop solution for integrated supply chain services within 2025.
“We are not just competing on low prices, but faster service,” said Mr Zheng.
“Within two years, the company will embark on a finance business by offering loans to franchise agents with low interest or no interest.”
To create differentiation, the company offers free door-to-door service and only a 2% charge for cash-on-delivery services with money transferred within one day via Kasikornbank.
Source: https://www.bangkokpost.com/business/1954691/best-betting-on-thai-market