Thailand
Thailand: E-commerce changes supply chain logistics
The e-commerce boom and customer demand for same- and next-day delivery have forced e-commerce companies and their logistics partners to streamline both their warehousing needs and delivery models to remain competitive in this rapidly changing industry.
Prior to the rapid expansion of e-commerce, large retailers did not have warehousing and logistics networks in place to deliver goods from any point in the country within a 24-hour period, a new standard of customer expectation.
Back then, the time taken from a warehouse to a customer via retail outlets was not the primary consideration when assessing the location of warehouses, with cost being of greater concern. Now if e-commerce companies want to remain competitive, the location of their warehousing and logistics networks, facilitating next-day delivery throughout the country, is of paramount importance.
In Bangkok, the concentration of e-commerce warehousing is in and around Bang Na-Trat Road from kilometres 15-23. This area has become the country’s prime logistics hub, providing an ideal location with good transport links to an airport from Laem Chabang Port and into Bangkok and surrounding provinces.
Bangkok remains the country’s largest e-commerce market and they manage their countrywide logistics out of central warehouses in the Bang Na Trat area, supplemented by smaller drop-off and pickup points across the country. Major e-commerce and logistics companies — Lazada, Shopee, Aden, Pomelo, Central Group, Kerry Express and DHL Express Thailand — have facilities in this area.
James Lamrock, vice-president of regional operations at one of the newer e-commerce companies, Pomelo Fashion, said: “E-commerce businesses in the region [Southeast Asia] are growing extremely fast. In order to keep up with increased order volumes and assortment expansion, the operators generally require shorter-duration leases and flexible lease terms. While individual space leases may be shorter than traditionally expected, fostering these relationships can be extremely valuable in working with the tenants as they grow and need larger or even multiple fulfilment locations.” Pomelo’s space requirement in 2018-20 is expected to increase five-fold from 2014’s levels.
Adam Bell, head of CBRE’s industrial and logistics property team, believes that over the coming years, the continued expansion of Thailand’s e-commerce businesses will not only drive demand for logistics space but also see ongoing changes in the supply chain, logistic operations of e-commerce companies and their logistics partners as e-commerce strategies and concepts develop.
While Thailand’s e-commerce is still at the early stage, more firms are likely to offer a wide range of e-commerce concepts and strategies to adapt to the ever-evolving needs of consumers.
Pobporn Svetasobhana is an analyst at Research and Consulting, CBRE Thailand. He can be reached at [email protected]; Facebook: CBRE.Thailand Twitter: @CBREThailand LinkedIn: CBRE Thailand and website: www.cbre.co.th
Source: https://www.bangkokpost.com/business/news/1447938/e-commerce-changes-supply-chain-logistics