Express delivery pivots to new markets

Thai providers move away from e-commerce business, looking for new premium clients alongside ways to upgrade their technology and cut costs, write Suchit Leesa-nguansuk and Komsan Tortermvasana

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Some express delivery operators in Thailand are charting new growth paths to avoid reliance on e-commerce platforms.

To escape the saturated “red ocean” of price wars in the delivery market, the service providers are pivoting towards premium, value-added services, ranging from fresh fruit to pet and medical logistics.

These operators are also investing in artificial intelligence (AI) and automated systems to cut costs and enhance operational efficiency.

Regulators are drafting new rules to supervise the postal service and the e-commerce sector, aiming to ensure consumers gain a greater benefit.

The estimated value of the express delivery market in Thailand is 117 billion baht, based on the revenue of six major players in 2024.

FRESH FRUIT WAR

KEX Express (Thailand) was acquired by S.F. Holding, a leading logistics provider in China, enabling KEX to integrate advanced technologies and expand its operations, with a strategic focus on cross-border e-commerce between China and Southeast Asia, said chief operating officer Stephen Bao.

In November 2024, KEX discontinued all its agreements with Lazada and Shopee for product delivery.

E-marketplace operators have reduced the fees paid to logistics delivery firms to just 12-14 baht per parcel, down from 18-19 baht, in a bid to increase their profits.

Mr Bao said SF plays a vital role in supporting Thai agricultural exports by streamlining logistics from farms to consumers, particularly for the Chinese market, improving profits for local farmers.

“Looking ahead, SF aims to enhance its services by leveraging big data and AI to optimise delivery networks and improve customer experience,” he said.

In January, KEX announced a revised pricing structure for its parcel delivery services to better align with market dynamics. Under the new model, service fees are calculated based on the actual weight and dimensions of each parcel.