Display mode (Doesn't show in master page preview)

28 Nov 2019

Services

Emergence of E-Fulfillment Centers to Transform Thai Warehouse Business Amid Thriving E-Commerce (Current Issue No.3058)

         ​Currently, e-marketplace has begun to increase investment in e- fulfillment centers because e-fulfillment is the key to their business; i.e., it can help create the most satisfying service experience to customers, leading to repeat purchases and bolster sales other than just a product delivery service. This has resulted in the proliferation of a new form of e-fulfillment center, focusing on shortening the order cycle time and offering the fastest delivery service.

            The new form of e-fulfillment center can shorten the order cycle time through an efficient use of distribution centers at both the regional and city levels at the same time.  A regional distribution center is used to store a diverse range of products to meet the needs of customers residing in large areas while a city distribution center is intended for local customers. Product distribution via such distribution centers requires artificial intelligence (AI) in forecasting the behavior of customers in respective areas so as to find an appropriate type and number of inventory for each distribution center and shorten the delivery time to 2-3 hours.

            Meanwhile, a leading logistics company was the first to offer e-fulfillment logistics services and invest in regional distribution centers in Thailand while e-marketplace only recently invested in regional distribution centers here. It is expected that e-marketplace will increase investment in city distribution centers within the next 10 years and this may force a leading logistics company to follow suit in order to maintain its competitiveness against e-marketplace.

            Over the next 10 years, the e-fulfillment logistics business will become a battleground for e-marketplace and a leading logistics company. Therefore, demand for space in e-fulfillment centers will come from the two players.

            We at KResearch forecast that demand for space in the new form of e-fulfillment centers will increase from 167,000 square meters in 2019 to approximately 628,000-942,000 square meters in 2029. Of those, around 408,000-612,000 square meters are demand for space at regional distribution centers and 219,000-330,000 square meters at city distribution centers.