Strategic Shifts in Thailand’s Express Delivery Market
Thailand’s express delivery sector is undergoing a significant transformation as companies seek to differentiate themselves from the highly competitive e-commerce market. With the industry saturated with price wars, several key players are redefining their strategies by focusing on premium and value-added services.
Diversification of Services
To escape the “red ocean” of competition, logistics providers are expanding into niche markets such as fresh produce, pet care, and medical logistics. These services offer higher margins and better customer engagement compared to traditional parcel delivery. For instance, KEX Express (Thailand), now under S.F. Holding, has shifted its focus to cross-border e-commerce between China and Southeast Asia, emphasizing the importance of supporting Thai agricultural exports.
KEX has also discontinued its agreements with major e-commerce platforms like Lazada and Shopee, citing the need to reduce reliance on these platforms. The company now offers a revised pricing structure based on actual weight and dimensions of parcels, which allows for more accurate cost management.
In addition, KEX has introduced a service for shipping fresh fruits and plants in secure plastic baskets, accommodating up to 30 kilograms. This service caters to orchard owners, fruit shop proprietors, and customers who want to send 3kg of fruit for as little as 40 baht.
Flash Express has also adapted its approach by offering free farm pick-up and no minimum quantity requirements for fresh produce. Customers can schedule pick-ups via the Flash Express app or drop off at designated locations. Delivery fees start at 50 baht for the first 2kg, making it an attractive option for small-scale farmers and retailers.
Technological Advancements
Artificial intelligence (AI) and automation are playing a crucial role in enhancing operational efficiency across the sector. SPX Express (Thailand) is leveraging AI in areas such as demand forecasting, route planning, and parcel sorting. These innovations help maintain consistent service levels and improve responsiveness during peak times.
DHL eCommerce for Southeast Asia has also invested heavily in technology, aiming to enhance customer experience and operational efficiency. Their customer portal provides a comprehensive shipment dashboard, allowing users to track shipments and monitor performance trends. AI is being used to streamline last-mile delivery processes and reduce human error.
Thailand Post is investing 1 billion baht this year to install automatic systems at its 19 distribution centers nationwide. This move is part of a broader strategy to reduce dependency on e-commerce platforms and explore new markets.
New Market Opportunities
Thailand Post is focusing on specialized logistics services, including the delivery of medical supplies for both humans and pets. While the volume of parcels from this segment is currently low, it offers strong growth potential and lower risk due to diverse customer sources.
To capitalize on the growing pet market, Thailand Post has partnered with Chulalongkorn University’s Faculty of Veterinary Science and the Bangkok Animal Hospital. This collaboration enables the delivery of veterinary medicines and medical supplies through two channels: home delivery for in-person visitors and online televet services.
Data-Driven Operations
As the number of players in the market declines, many logistics providers are shifting towards data-driven operations to optimize expenses and profitability. Flash Express, for example, has introduced key performance indicators to encourage employees to adopt technology that reduces time-related costs.
Sutthikead Chantarachairoj, president of the Logistech Association Thailand and CEO of Shippop, noted that while aggressive price wars were common, the focus is now on performance-driven strategies. He emphasized that e-commerce has become the norm, with successful sellers relying on product quality, brand strength, and customer retention strategies.
Regulatory Developments
Regulatory changes are expected to reshape the logistics landscape. The Digital Economy and Society (DES) Ministry has directed Thailand Post to revise the outdated Postal Act of 1934, aiming to improve postal and logistics service regulations. The proposed amendments will extend oversight to all postal service providers, ensuring fair competition and consistent service standards.
The Trade Competition Commission of Thailand is also drafting new guidelines under the 2017 Trade Competition Act. These guidelines aim to address unfair trade practices, monopolistic behavior, and anti-competitive conduct. They require digital platforms to provide consumers with multiple delivery options, promoting a more transparent and competitive market.
These strategic shifts and regulatory developments highlight a dynamic and evolving logistics sector in Thailand, where innovation and adaptability are key to long-term success.
