State-run logistics provider Thailand Post has set an aggressive net profit target for 2024 of 350 million baht, which if reached would be 4.4 times higher than the 78.5 million baht profit recorded last year.
The profit last year was the first time the company was in the black in three years.
Thailand Post is relying on the strength of its physical and human resource networks as well as its digital solutions to reach the goal, said chief executive Dhanant Subhadrabandhu.
Retail business revenue last year totalled 1 billion baht, up 35% from 2022. The retail business last year contributed around 5% of total revenue and is expected to reach 20-30% by 2026, he said.
Mr Dhanant said the company booked total revenue last year of around 21 billion baht and a net profit of 78.5 million, attributed to its business capability and digital transformation to serve changing global trends in the postal business.
The transport and logistics business generated 45.5% of total revenue last year, followed by the postal group at 33.8%, international service 13.4%, retail business 5%, with others accounting for 0.96%.
A key development in its operations last year was logistics grew 19% from 2022 amid fierce market competition, he said.
The company aims to generate 22.8 billion baht in revenue this year with a net profit of 350 million, said Mr Dhanant.
Thailand Post expects its transport and logistics business to generate 46.1% of total revenue, followed by the postal group at 32.5%, international service 14%, retail business 5.1% and others accounting for 1.42%.
STRATEGY SHIFT
He said the company set a strategy to move from last-mile delivery to become a first-mile service as the company has a good reputation among Thais for many services and is well-known among several generations.
In addition, the company is trusted for its quality, said Mr Dhanant.
Thailand Post recognises the importance of providing environmentally-friendly shipping and logistics services, he said.
Price wars are expected to be commonplace in the logistics market, while there is no significant difference in terms of quality and speed among the players, said Mr Dhanant.
Thailand Post specialises in door-to-door delivery using its nationwide network and years of experience, with a combined workforce of more than 25,000 postal employees who know every area of the country and are familiar with local communities, he said.
The company began selling its Prai brand of drinking water and rice in October 2023 before launching a coffee brand last month.
Thailand Post targets selling Prai Boost energy drink brand by the third quarter, said Mr Dhanant.
The company sells these products at a wholesale price, allowing postmen to earn a profit from selling them to the public.
"This mechanism is part of a concept to develop last-mile delivery to become first-mile service, adding value to the logistics operations," he said.
Thailand Post has its own drinking water production plant, while it procures rice through a contract for production.
The Prai Boost energy drinks are slated for production via contract manufacturing using selected factories, said Mr Dhanant.
The product is projected to sell for 10 baht a bottle, he said.
The postal delivery staff will receive direct orders and deliver the products to customers, said Mr Dhanant.
He said the company hopes the energy drink will receive a good response from the market.
Thailand Post aims to become a "trusted, sustainable Asean brand" within three years, though the real test is to satisfy consumer behaviour and demand, said Mr Dhanant.