Best Logistics Technology (Thailand), the operator of express delivery service Best Express, is expanding its reach on large goods shipment services and factory customers to Cambodia while gearing up to optimise its work processes in the face of intense competition and business challenges.
In addition to Cambodia, it also does cross border deliveries to China, Malaysia, Vietnam and Laos while Myanmar is set to become the next destination.
The firm is expanding its reach to large item delivery, including items weighing up to 300 kilogrammes, to serve rising demand. This segment includes furniture and large consumer electronic products.
The company is also gearing up to serve delivery for factories including multiple parcels, particularly in the automotive and electronics sectors, said Jason Qian, chief executive and president of Best Logistics Technology (Thailand). These factories can send their items to multiple destinations on one bill.
Best Express started operations in Thailand in 2020, the first overseas investment destination by its parent Best Inc, which is one of the top three smart logistics and supply chain operators in China. The firm set out a budget of 5 billion baht (US$149.49 miilion) for investment in Thailand from 2020 to 2025.
“We chose Thailand as the first country for expansion a few years ago due to the geographic advantage,” said Qian. “We will continue to expand our footprint in the region to support cross-border e-commerce growth.”
Best Express ranks in the top five express delivery service providers in Thailand and aims to reach the top three by 2025, he added.
In 2021, the local express delivery market was valued at 50 billion baht, about half of the total logistics segment. In Thailand, 914 million parcels were shipped last year with an 8 percent unit market share held by Best Express.
“Thailand’s express delivery segment will continue to grow despite challenges brought by economic turmoil affecting the volume of parcels being shipped, particularly from e-commerce channels. I expect the situation will rebound in the second half of this year.”
The firm operates two main business units: Best Express for express delivery services and Best Supply Chain for warehouse management and cross-border services. It has around 1,000 franchisees across the country and handled around 300,000 parcels per day last year. For this year, Best Express aims to double that tally this year, said Mr Qian.
The company wants to invest more in fulfilment centres in various countries and connect with Chinese e-marketplaces to support product delivery to Asean, he said.
Qian noted that e-commerce accounts for only 8 percent of Thailand’s total retail market, compared with 50 percent in China and 30 percent in the EU and US. “I think Thailand’s online retail can make up 20-30% of the total retail market within five years,” he said.
To boost e-commerce growth, it is important to reduce transport cost and enhance physical transport facilities, said Qian.
“In China, we have multiple types of transport networks and economy of scale in terms of population. We embrace technologies to increase efficiency and use optimisation strategy to help lower delivery cost.”
As such, the company will adopt automated machinery to reduce labour cost and increase efficiency. High import taxes for automated machinery could be a challenge, he said, but if this burden is eased, it could stimulate businesses to invest more in new technology.
Since last year, Best Express has deployed electric tricycles to support delivery in Pattaya. Using electric vehicles (EVs) for delivery is still challenging because of the lack of charging points, said Mr Qian, noting that the Thai government’s recent EV incentive package is useful as it could subsidise the cost of EVs.