State-run logistics enterprise Thailand Post has scrapped year-long talks with a Chinese logistics company on a joint venture because it did not offer benefits as projected.
According to Thailand Post president Dhanant Subhadrabandhu, the two parties held discussions for a year on establishing a joint venture to increase Thailand Post's logistics volume between the two markets, as the local e-commerce landscape is dominated by Chinese products.
Thailand Post wants to enhance its international express service, he said.
The two parties progressed through more than 50% of the conditions for a collaboration, but a deal was unlikely to yield adequate benefits for the state agency, said Mr Dhanant.
The joint venture was meant to be a facilitator, drawing transactions for logistics services for goods from China to the local market and in the reverse direction, he said.
Thailand Post hoped to finalise a deal by the middle of this year, said Mr Dhanant.
The Chinese logistics firm was required to establish a warehouse for the joint venture, but Thailand Post was not given proper privileges to provide such logistics services for a strategic partner, he said.
As a result, the talks collapsed, said Mr Dhanant.
Logistics business generates 45% of Thailand Post's total revenue, followed by the postal group at 33%, international service 13%, retail business 5%, with the remainder from others.
Thailand Post's market share in the country's logistics sector is 32%, with the rest dominated by foreign logistics service operators, especially from China.
The strength of the state agency's international delivery service is its extensive domestic and international network, covering 205 destinations in 193 countries, he said.