Local Logistics Prospects Bright on Better Quality and Service

Total Retail – Same-day delivery, quality 24-hour service and a slowing price war with Chinese logistics firms are brightening prospects for the Thai logistics sector, says Shippop, a local logistics aggregator.

E-logistics services are booming, the startup said, driven by the popularity of e-commerce, even in the face of an economic downturn and fierce competition among global e-marketplace providers.

Thailand’s e-logistics services are expected to grow up to 15% in 2019, up from 31 billion baht in 2018.

“There are still new logistics providers, particularly from China, waging price wars to attract new customers, but overall logistics services will return to focusing more on service quality and delivery prices will surge,” said Sutthikead Chantarachairoj, chief executive of Shippop.

The lower price of 10-19 baht per parcel leads to poor-quality delivery that frustrates customers, he said.

“Some Chinese logistics providers can slash prices in order to build a customer database and add new services such as loans, but other rivals will focus on delivery fees that will not escalate into a price war and the situation will improve in the second half,” Mr Sutthikead said.

Logistics providers will expand same day deliveries this year, mostly focusing on upcountry, as well as next day delivery.

Same day delivery will serve Thais that might be willing to pay extra for faster deliveries as surveys found 47% of consumers were willing to pay extra, according to Boston Retail Partners. In 2018, same day delivery services grew 43% accounting for 22% of total deliveries.

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