THURSDAY, March 28, 2024
nationthailand

Who’s scared of Alibaba?

Who’s scared  of Alibaba?

Arrival of e-commerce giant will intensify competition thus sharpening the industry and leading to increased investment, say Thai logistics leaders

The strategic partnership between the government of Thailand and Alibaba brings with it impacts not only on the e-commerce industry but also on the logistics industry as well. Most importantly, Alibaba’s smart digital logistics business, Cainiao Network, will establish a Smart Digital Hub in the Eastern Economic Corridor (EEC). 
The Smart Digital Hub will utilise Alibaba and Cainiao’s data and logistics technologies and processes to optimise the cross-border flow of goods between Thailand and China and also with other markets. 
Several local logistics industry players give the developments a welcome nod and believe it will bring both opportunities and simultaneous threats. 
It is an opportunity for businesses who prepare and adjust themselves to compete with the China-based giant, while being a threat to those who do not improve their business capacities. 
Samorn Terdthampiboon, president of Thailand Post, said that the arrival of Alibaba and Cainiao Network presents an opportunity for the delivery service since it will increase the volume of e-commerce and logistics transactions. 
“We’re always investing in and inventing new services to facilitate and capture the increasing logistic demands, such as introducing Prompt Post, expanding our drop stations, and setting up Thailand Post Distribution,” said Samorn.
He predicted that Thailand Post will maintain its leading position in local logistics even with the arrival of Alibaba and Network. Thailand Post has logistics network coverage nationwide with over 5,000 branches, while the post office employs over 35,000 people with in-depth local knowledge.
“Our total transactions are 8 million items per day, including letters, boxes and parcel post. Also we have long offered a total logistics service from pick-up, to warehousing and delivery. We have 19 distribution centres excluding the distribution centres of Thailand Post Distribution,” said Samorn.
Moreover, Thailand Post has partnered with DHL Express to enable international trade for e-commerce merchants through the launch of “Courier Post” featuring premium logistics service standards. The partnership will enhance the cross-border delivery experience and aims to help e-commerce sellers to grow their global trade.
Powered by DHL Express, Thailand Post customers using Courier Post will enjoy a premium delivery experience within 2-4 days, with access to a global network in over 220 countries and territories, customs clearance expertise at the destination country and an exclusive “on-demand delivery” (ODD) solution, said Samorn.
“Cross-border e-commerce is transforming the way in which SMEs and online merchants operate their businesses,” he said. “We constantly reinvent our service to meet the needs of our customers.” 
Phensiri Sathianvongnusar, the Thailand CEO of aCommerce Co Ltd, said that any investments by Alibaba in setting up a digital hub will spur the country’s economic growth, especially with China. The investment would help small and medium enterprises (SMEs) to leverage e-commerce and digital business, as well as improve needed infrastructure and human capital. The growth resulting from Alibaba’s investments would eventually attract further investments in the logistics sector as they see the segment growing, he predicted. 
Still, there are concerns about the impact of Cainiao Smart Logistics Network on Thailand’s logistics industry. Phensiri said that it’s uncertain whether Alibaba will be able to build up a market-leading consortium similar to its achievement in China. Most likely, the industry would continue to be fragmented and controlled by several larger companies and networks in the future, without a single dominant one, she said.
The market dynamics in Thailand are very different to what China was like when Cainiao started. Thailand’s logistics industry is highly fragmented, and the infrastructure is already well established with many large local players such as Thailand Post, along with regional players such as Kerry Express and global players including DHL that are continuously investing and gaining more market share. 
“In our view, having competition would force the existing players in the industry to constantly improve, drive change with innovation and expand the industry’s calibre,” said Phensiri. “Any company that helps grow the e-commerce industry, whether by offering better or cheaper logistics, will also enable us to grow even faster.”
On the logistics side, said Phensiri, her company “leverages the aggregation model by integrating and working with all kinds of transportation companies and service options and models. So we will directly benefit from tapping into this new network.”
Kiattichai Pitpreecha, managing director, Southeast Asia, for DHL eCommerce, also argued that the move by Alibaba would add extreme value in promoting e-commerce trade. The arrival of Alibaba proves that it’s an exciting time for Thailand’s e-commerce industry, he said. And he pointed to recent news reports that the EEC will use technologies to streamline trade between Thailand, China and other markets, including digitising its customs process.
“Our goal is to become the leader in e-commerce related logistics worldwide. We do so by continuously investing in quality services, innovations and infrastructure. And we have a close business partnership with Alibaba,” said Kiattichai.
Since 2015, DHL eCommerce has been working with Tmall Global on creating an official online flagship store for its customer, FC Bayern Munich to reach its over 90 million fans in China.
“Based on the confidence we have in the strength of our global network and our high quality service offering, our aim is to support our customers with their logistics requirements and make them successful, and we will achieve this by continuously investing in quality services, innovations and infrastructure,” said Kiattichai.
“We are very confident that Deutsche Post DHL Group will remain the first-choice logistics provider for its customers and for the e-commerce market.” 
The most likely scenario for the logistics sector in Thailand and in CLMV, he argued, is that it will be positively transformed once Alibaba’s Cainiao is established. The arrival of Alibaba will further promote and support trade among developing countries in the region and therefore bring about more opportunities for the logistics industry in Thailand and CLMV, Kiattichai concluded.

 

RELATED
nationthailand