DHL eCommerce has launched domestic B2C delivery services in Thailand as it expands consumer parcel services in key Asian markets to profit from the region’s e-commerce boom.
The company has opened a 3,000 sqm central distribution hub in Bangkok along with 20 local depots across the country and is building up a delivery fleet to provide domestic consumer deliveries for online retailers in the fast-growing Thai e-commerce sector. The size of the investment was not disclosed.
DHL eCommerce, part of Deutsche Post DHL Group’s PeP division, now offers next-day delivery to all urban areas (Bangkok and major cities) with its fleet of fleet of two- and four-wheel vehicles, and a 2-3 day delivery to all other locations. All merchants have access to Cash on Delivery (COD) with daily remittance and access to a multilingual call center.
According to information on the DHL Thailand website, the company offers Thai e-retailers a mix of domestic and international parcel services. DHL couriers collect the e-commerce shipments, which can weigh up to 20 kgs, directly from the retailer’s premises for domestic doorstep deliveries. End-to-end tracking and SMS notification are provided for business customers and consumers. For exports, DHL eCommerce offers ‘DHL Parcel International Direct’ for shipments up to 20kgs, with end-to-end tracking and final delivery “through our reliable partners”, and ‘Globalmail Packet’ for small items up to 2kgs.
Looking ahead, DHL eCommerce plans to more than double the number of depots in Thailand by 2017 and expand its fleet primarily in two-wheel vehicles that can operate more efficiently in the traffic situations in Thailand's major cities.
"Thailand, with its tremendous growth potential, fast e-commerce adoption and high smartphone penetration rates, has been identified as the first Southeast Asian country to launch DHL eCommerce's domestic delivery service in line with our group's Strategy 2020," said Thomas Kipp, CEO, DHL eCommerce. "The Thai e-commerce market is expected to more than triple in size to €3.6 billion between now and 2020 and with this investment, we are well positioned to support the growth of e-commerce businesses in Thailand."
Malcolm Monteiro, the unit’s CEO Asia Pacific, added: "We see major strategic opportunities for e-commerce growth in Thailand, particularly with the Asean Economic Community which is expected to increase the movement of goods within the region. Thailand is ranked as one of our top priority markets in Southeast Asia. Its expected annual market growth of more than 20% (from 2014 to 2020) is likely to be largely driven by significant numbers of SMEs beginning to extend their business models into online marketplaces."
He pointed out: “Despite e-commerce already being a billion-dollar sector with extremely rapid adoption, Thailand's e-commerce share of the retail market is still relatively low compared to other high-growth economies. Only 1.7% of total sales in Thailand are obtained from e-commerce, compared to more than 10% in China.”
Monteiro continued: "Our successful offerings in India and China have proven that exceptional customer service bolstered by robust and scalable end-to-end delivery networks are the two essential ingredients needed to win e-commerce market share. That applies to all players, from small businesses to multinational retail conglomerates. As Thai consumers continue to come online and join the region's appetite for e-commerce, we are confident that our services will give customers both a first-mover advantage and a unique competitive edge."
Kiattichai Pitpreecha, Managing Director, DHL eCommerce Thailand, commented: "In order to fulfill Thai consumers' expectations of seamless and simple e-commerce, businesses need logistics services that keep up with extremely rapid changes in consumers' expectations while providing high operational excellence. This makes the need for a tailored e-commerce delivery service greater than ever before — so that merchants, especially SMEs, can focus on their core business and grow faster based on a high performing logistical backbone."
Asked about the size of DHL’s investments in the Thai e-commerce delivery business, a spokesman told CEP-Research: “With the launch of our domestic delivery service, we are closely monitoring the market needs and will put in place suitable infrastructure to meet the needs of our customers (merchants) and the end consumers. We are committed to providing a positive e-commerce experience for end consumers? and encourage them to be repeat customers on our customers (merchants) platforms.
“As a service provider, we are focusing beyond our infrastructure and are also looking at our human capital. We need to have the right people to deliver on our customer promise. As such, we are also focusing on recruiting people with a customer-centric mindset and great attitude, and ensuring they undergo the right training to deliver the service quality that our customers have come to expect from DHL.”
In its Strategy 2020, DP DHL has put e-commerce and emerging markets at the heart of its growth ambitions. It wants to become “number one in cross-border e-commerce services on the most attractive international trade lanes” and one of the “top three for domestic B2C delivery and e-commerce logistics in selected markets”.
