Copy Reference The cross-belt machines at Lasalle distribution center of Flash Express in Bangkok heat up in the evening, when the workers operating the machines are busiest. Established in 2017, Flash Express began operating in 2018. It is the first delivery service provider to offer free parcel pickup and 365-day service in Thailand.
While internet penetration continues to increase in Southeast Asia with a population of about 650 million, a lack of infrastructure has hampered the development of the local logistics industry. In recent years, the arrival of Chinese delivery companies such as Best Express, Jingdong Logistics (JDL), and Flash Express in Southeast Asia has made delivery services become faster and more convenient for locals.
Expressed Interest
A recent report from the Development and Research Center of the State Post Bureau of China shows that Southeast Asia has become a popular destination for Chinese logistics companies going global. Chinese enterprises have gained impressive popularity in the region thanks to highly efficient service, while their operation models have in turn driven local delivery companies to develop.
“At the Lasalle distribution center, we handle over 500,000 packages every day, loading them into more than 700 trucks bound for areas around Thailand,” reported Komsan Saelee, Chief Executive Officer of Flash Express Thailand. “Six trucks from the center head to Ranong Province, one of the southern provinces of the country and also the southernmost place covered by our ‘next day delivery’ service.” Since arriving in Thailand, Flash Express has opened 3,500 delivery stations and 19 distribution centers in 77 provinces across the country. And its workload continues increasing. “The customers have been quite satisfied with our services.”
A major enterprise to receive funding from eWTP, an e-trade platform operated by Alibaba Group, Flash Express has seized the second largest market share in Thailand’s delivery industry. “It takes only two days to deliver parcels from Bangkok to Chiang Mai with Flash Express service, which is twice as fast as before,” said Vitaja, a Bangkok resident. “I used to go to a far-off location and wait in a long line to fill out a delivery waybill. Flash Express provides free pick-up, so you can send packages without leaving home.”
Tawik Donrat is a physical education teacher at a middle school in Ranong Province. He purchases sports equipment including basketballs, footballs, and uniforms from distributors in Bangkok. This year, sellers began sending him goods via Flash Express. “Ranong Province is more than 580 kilometers from Bangkok,” he said. “In the past, it took three to five days to transport goods between the two places, but now it takes only 24 hours and costs less.”
IKEA, a multinational producer of furniture and home furnishings, entered the Indonesian market in 2014. The performance of local IKEA stores greatly improved within months after they started working with JDL for delivery operations. JDL introduced successful experience to Indonesia, according to IKEA. “Chinese delivery companies are professional, highly effective, and trustworthy.”
Job Opportunities
Jiraporn Dongplub joined Flash Express last year and now manages a delivery station in Chatuchak, Bangkok. “Thailand’s economy has been pummeled by the COVID-19 outbreak, but our orders keep increasing, and my salary has even increased by 2,000 baht [US$ 66],” he said. “The 50 delivery workers at my station are motivated in their work. The delivery industry is undergoing rapid development in Thailand and has a promising future.”
“Chinese investment and technologies not only boosted the development of Thailand’s delivery industry, but also generated many jobs, which improved the workforce across the industry,” said Jiraporn, who has been considering starting his own business with his experience in delivery.
This July, Best Express officially launched service in Malaysia, Cambodia, and Singapore. In Myanmar, ZTO Express opened major distribution centers in Muse District, Mandalay, and Yangon, and laid out a delivery network consisting of logistics lines and stations across the country. In 2019, YTO Express officially began offering international express services in Vietnam. SF Express invested in KOSPA, a Myanmar logistics company, and established joint ventures in Indonesia with focus on e-commerce and delivery services.
Aksornsri Phanishsarn, associate professor of Economics at Thammasat University in Thailand, called the delivery and logistics industry a barometer for the development of a country’s infrastructure. Southeast Asian countries are all committed to improving the delivery and logistics industry. Chinese delivery companies have mature models for industrial development, and Southeast Asian enterprises have much to learn from their Chinese counterparts in terms of technology and operations to accelerate development of logistics and other service industries locally.
E-commerce and Economic Development
A report released by Nielson, an international market analytics firm, shows that online shopping by Southeast Asian consumers surged during the COVID-19 outbreak. Application of digital technologies has enabled cross-border online shopping and e-commerce to develop rapidly.
A major fruit production base in Thailand, Chanthaburi Province is well known for durian production. Ulapon, a 56-year-old durian producer from Chanthaburi Province, noted that the pandemic struck Thailand hardest right at harvest season, so he was very worried about the sales. “Fortunately, e-commerce platforms offered new channels for me to sell the durians to Chinese customers, who love the durians produced here,” he said. “The price of the fruit even went up.” He added that uninterrupted China-Thailand cross-border logistics had guaranteed the profits for Thai fruit producers during the outbreak.
Statistics from the Ministry of Commerce of Thailand show that China is the biggest market for the country’s durian exports. In the first half of 2020, sales of the durians exported to the Chinese mainland surpassed US$1 billion with a year-on-year growth of 140 percent.
This February, ASEAN became China’s largest trading partner for the first time, creating more pressure and opportunity for cross-border logistics to boost bilateral trade. At this year’s China International Fair for Trade in Services, Best Express launched cross-border delivery service between China and five Southeast Asian countries including Thailand, Vietnam, Malaysia, Cambodia and Singapore.
Dr. Tharakorn Wusatirakul, deputy director of the Thailand-China Research Center of the Belt and Road Initiative, noted that the rapid development of e-commerce in Southeast Asia in recent years makes this a crucial time to seize major progress in modern delivery and logistics. For Thailand and other Southeast Asian countries whose economies were severely hit by COVID-19, improving infrastructure and developing the delivery industry is a key strategy to counter the downward pressure on the economy. “Thailand welcomes Chinese delivery companies to bring in new models and new technologies,” said Tharakorn. “They help facilitate connectivity under the Belt and Road Initiative, accelerate local delivery networks, and boost regional economic development in Southeast Asia.”
Delivery workers for Flash Express.
A worker scans a parcel at the Bangkok distribution center of Flash Express on September 8, 2020. (ZHAO JINGNAN)