Thailand Post plans to restructure its operational costs to deal with a tough market this year as waning consumer purchasing power could affect local logistics volume.
The move is to ensure Thailand Post's profitability and sustain future growth, according to president Dhanant Subhadrabandhu.
He said Thailand Post is monitoring the economy to keep pace with its growth potential and prepare strategic moves.
The market changes dramatically every year and in 2025 Thailand Post might struggle, said Mr Dhanant.
Thailand Post posted revenue of 15.8 billion baht in the first nine months of 2024, with domestic transport volume recording impressive growth.
Express Mail Service rose 8.07% year-on-year, driven by customer confidence in the service and its strategy aimed at generating revenue from digital and physical services.
The transport and logistics sector contributed the most, accounting for 46.5% of total revenue, with a growth of 3.34% year-on-year, in line with growth in the retail and e-commerce sectors.
He said Thailand Post's efforts to enhance customer experience led to a domestic parcel service growth of 18.5% in the first nine months of 2024.
Mr Dhanant said the market fee for express parcel delivery service had been around 60 baht per piece on average during the past seven years before dropping to 20 baht at present, resulting in a declining profit margin for Thailand Post's logistics business, its major revenue earner.
He said the local e-commerce market currently is dominated by Chinese products, with the traffic volume from China to Thailand soaring.
Despite the state enterprise's logistics partnerships with several major e-commerce platforms such as TikTok, Lazada and Shopee, the platforms can still decide which stores Thailand Post is able to provide services to and which ones other couriers can serve. They can also assign which logistic routes Thailand Post should use to deliver the parcels.
A source in the logistics industry who requested anonymity said all China-based e-commerce platforms use J&T Express Thailand as a major channel for delivering products from the country to Thai consumers.
Mr Dhanant said Thailand Post is set to expand its parcel delivery service to cover a greater number of e-commerce platforms and stores from the platforms by directly unlocking the demands of merchants on the platform that require quality logistics services.
Thailand Post is scheduled to form a joint venture with a Chinese logistics company in the second quarter of 2025 as it works to increase its volume of cross-border logistics transactions between the two nations.
Talks held between the two companies have reached about the 60% mark when comes to reaching completion, he said. In principle, Thailand Post plans to hold only a 25% share in the venture.
Logistics business generates 46% of total revenue for Thailand Post. The postal group accounts for 33% of total revenue, the international service group generates 13%, retail business 5%, with the remaining 3% generated by other business activities.
