State-run logistics provider Thailand Post is expanding its retail business, aiming to boost the revenue contribution from this area from 5% to 30% of its total revenue in three years, says chief executive Dhanant Subhadrabandhu.
The company plans to introduce energy drinks under the PRAI Boost brand by the third quarter of this year after launching the PRAI drinking water and PRAI Rice brands in October last year.
The move is in line with the company's strategy to turn its last-mile delivery business into a first-mile service, Mr Dhanant said.
In addition, Thailand Post is studying an opportunity to offer a virtual banking service with potential partners. It expects the picture regarding the Bank of Thailand's licensing regime for the virtual bank business to be clearer by end of this year.
In terms of the retail business, the company's postmen would be able to promote the products and receive orders, setting the delivery time the next day with consumers in accordance with the management of their own schedule.
Thailand Post would sell the products specified at a wholesale price, so the postmen would then be able to make a profit from selling them to the public.
"This mechanism is done through the concept to develop last mile delivery to be a first mile service as well as adding value to the logistics operations," he said.
Mr Dhanant said sales of drinking water and rice generate a monthly revenue of more than 10 million baht and the revenue is expected to continue to grow.
Thailand Post has its own drinking water production plant, while it procures rice through a contract for production.
He said the company is developing a recipe for its PRAI Boost energy drink, which would be produced via a contract for production with a selected factory. Postmen would receive orders directly and then deliver the products to the customers, Mr Dhanant said.
The company hopes the products will receive a positive market response, he said.
Mr Dhanant said the company also wants to offer a virtual bank service through a partnership model by relying on the strength of its physical network and the huge quantity of data it possesses of its customers nationwide.
He said migrant workers are a target for the virtual banking service, too, along with Thais who do not receive a pay slip from their employers.
Transport and logistics generates around 45% of Thailand's Post's total revenue, followed by the postal group which accounts for around 30%. The international service group generates 15%, the retail business group accounts for 5%, while the remainder is generated by 'others'.
The company expects its retail business to account for 30% of total revenue within the next three years.
Thailand Post marked the occasion of its 140 years of operation last year. In the first half of 2023, the company reported total revenue of 10.8 billion baht, or a 13% increase over the corresponding period of 2022. Its net profit stood at 157 million baht, representing the first profit the company has made over the past few years.
Mr Dhanant said profit for the whole of last year was projected to reach 50 million baht due to fiercer competition in the third quarter.