Thailand Post is launching a low-price express mail service (EMS) with a 23% cheaper rate to cash in on the booming e-commerce market. The move is intended to drive annual EMS business growth of 18%.
The reduced rate for EMS service begins on Sunday, focusing on 3-20kg parcels.
The move is intended to relieve a business pain point for Thailand Post EMS, as the service has been overlooked by customers due to its high price compared with other delivery service providers.
"We [Thailand Post] have for years been losing business opportunities for EMS service, especially pieces weighing more than 3kg, but now we are ready to compete," said chief executive Smorn Terdthampiboon.
She said the company previously could not reduce the price on EMS exceeding 3kg because its delivery capacity and operations were limited, including the number of vehicles and containers used for fast delivery service.
The company instead tried to compete in lightweight EMS, which accounts for 93% of its total EMS volume annually.
Mrs Smorn said EMS and parcel service generates 47% of revenue for Thailand Post, while EMS generates more than 30%.
She said the company has booked 12.1 billion baht in revenue for the first five months of operations this year and a 1.6 million profit.
"Thailand Post started a soft launch with lower EMS rates on April 17 and found that the volume of its EMS service increased by 21% year-on-year during April to May," she said.
Mrs Smorn said Thailand Post this year will also benefit from postcards, projecting sales of 220 million cards or 440 million baht through a collaboration with Thai Rath newspaper on a World Cup lucky draw campaign.
The company is also establishing an e-commerce centre in September.
Mrs Smorn said heavy competition in the e-commerce market is forcing players to provide same-day delivery service, a crucial marketing strategy for businesses to grow.