Thailand’s logistics industry is gaining importance as e-commerce expands both nationwide and worldwide. Logistics.asia predicts that it will be worth $100 billion by 2026, with a 6% annual growth rate. However, despite this growth, most logistics companies in Thailand are seeing declining earnings due to misguided strategies that focus on cutting prices to remain competitive.
To address this issue, BEST Logistics Technology (Thailand), a subsidiary of BEST Inc., one of China’s leading logistics and supply chain solutions providers, is introducing a more sustainable model known as the ‘Franchising model.’ This model has already proven highly successful in mainland China, where the company began operations in 2007.
Having taken on the position since November of the previous year, Chow emphasises that his primary responsibility is to highlight the value of BEST’s franchise model in Thailand and the region. This strategy aims to ensure that BEST remains at the forefront of the delivery business during this promising period.
But why opt for a franchise model?
Drawing from his extensive experience in banking, finance, corporate transactions, including investment banking and risk management, Chow has learned how to manage costs while providing business partners opportunities for mutual growth with BEST and delivering the best services to customers. Compared to several self-operated logistics providers in Thailand, he explains how the franchising model enables BEST to scale its operations by leveraging network partners to provide pickup and last-mile delivery services while maintaining control over line-haul transportation and sorting networks within the express delivery value chain.
Franchisees are entrepreneurial individuals who excel in managing costs and providing high-quality services compared to employees of self-operated logistics companies. Additionally, franchisees are local business leaders capable of serving their customers effectively. In essence, a franchisee network can operate at lower costs and deliver better service quality.
BEST has invested over THB 3.5 billion in its express delivery network, fulfilment warehouses, cross-border logistics infrastructure, and SaaS solutions platform. This substantial investment supports aspiring business partners who want to operate an express delivery business but lack the significant funding required to establish such a logistics operation capable of delivering parcels across the country within a few days.
Regarding the role of business partners or franchisees when partnering with BEST Express, Chow briefly explains, “Our franchisees are entrepreneurs who invest in facilities, vehicles, and employees to provide pickup and last-mile delivery services in our express business. BEST provides them with training, customers, operating systems, and a nationwide express delivery network to ship parcels across Thailand.”
Aside from cost savings, he pointed out that working with franchisees allows him to scale up quickly while still impressing the end customer because franchisees are already familiar with their customers and delivery routes. “They [franchisees] are already experienced businesspeople who understand how to run their own businesses. They are entrepreneurial and willing to grow with us,” he said, noting that BEST Thailand’s current one hundred franchisees have demonstrated dedicated commitment. Although BEST has been implementing the franchising model since its inception in Thailand in January 2019, Chow pointed out that more work needs to be done to continually strengthen its franchise network and enhance express delivery service quality. Still, BEST continues to grow steadily, proving its belief that the franchising model is the ideal strategic fit for the logistics business. BEST is Thailand’s first delivery company offering local investors the opportunity to own an express delivery business through delivery business improvement and franchising.
Expansion to Cover Large Parcels:
To commemorate the 5-year anniversary of logistical business development in Thailand and support further expansion, the company plans to continue developing a range of services to perfectly support clients, with one significant move being to focus on delivering large parcels ranging from five kilograms to 110 kilograms. “We are expanding beyond delivering smaller parcels because we see huge opportunities in handling bulky parcels. This is something that we are going to develop,” he said. He explained that, while other delivery providers prefer to handle small parcels, BEST Thailand can effectively deliver large parcels at a reasonable price thanks to their nationwide franchisee network and in-house innovative technologies. Meanwhile, in response to the growing demand for cross-border trade, BEST has laid out plans to provide services for international import-export businesses in Thailand. “We began offering cross-border services in March of last year. They are expanding exponentially. Chinese domestic consumption cannot absorb its massive manufacturing capacity, so Chinese companies are going global. The next ten years represent a golden age for China, Southeast Asia, and the rest of the world in terms of cross-border trade,” he said, emphasising that BEST is already in a strong position because the company has a massive logistics network and product offering that provides a total solution to its customers for their B2B2C, online to offline logistics, and supply chain needs worldwide. “We have a large network of customers that we serve in contract logistics, many of whom are exporters. We would like to connect Thai entrepreneurs with these international networks through BEST,” he noted. These networks, he said, enable BEST express franchisees to expand into cross-border logistics and warehousing fulfillment. In addition, to better serve the growing demand in the express industry, BEST plans to increase the number of franchisees in Thailand to around 200 this year.
Right Solutions with High Quality and Appropriate Technology:
Despite its focus on logistics services, BEST’s core business has always been technology-integrated smart supply chain solutions since the beginning. “Through our proprietary technology platform and extensive networks, we provide a comprehensive range of logistics and value-added services, such as express delivery, supply chain management, SaaS solutions, and global logistics services,” Chow said. He emphasised that his brother, Johnny Chou, Chairman and CEO of BEST Inc., is a former tech expert with experience at Bell Labs and Google before founding BEST Inc. “Johnny wanted to transform this traditional logistics business into a smarter one. His vision is to leverage technology and business model innovation to empower businesses by providing cost-effective yet efficient logistics and supply chain solutions and services, while enhancing consumers’ shopping experiences through superior delivery services,” he said.
Recognising that logistics is a critical component relied upon by entrepreneurs of all sizes to create products, offer services, or deliver to customers, he pointed out that the best way to stand out and lead the industry is to provide the best possible quality and value. BEST is already at the forefront in this regard, with its proprietary technologies making it a pioneer in automation and data analytics in express delivery and warehousing fulfillment. BEST also leads in providing SaaS solutions, including WMS and TMS, to businesses and ERP to sellers on e-commerce platforms. BEST is a trusted partner to many key accounts (KA customers), including renowned brands like Li Ning, Anta, and several multinational companies, with decades of experience providing reliable services and access to data that can enhance their overall efficiency.
“At the end of the day, we provide a complete solution to our customers who aim for end-to-end business or B2B2C (business-to-business-to-customer) and commercial online-offline. In the future, our goal is not just to build a last-mile express network. What we truly aspire to do is connect all the countries where customers, sellers, and buyers intersect, while also assisting merchant sellers in simplifying logistics, making it more cost-effective and efficient,” he said. “Our vision from the beginning has been to offer a superior customer experience and satisfaction with service quality. We’ve been doing it for more than 15 years and still have a long way to go,” he added, emphasising that BEST competes on product offerings and service quality rather than pricing.
Furthermore, as responsible and environmentally friendly business practices are becoming increasingly important worldwide, Chow noted that the company already provides green solutions for the logistics industry, some of which are on the list to be introduced to Thailand when the time comes. “Express delivery business consumes a significant amount of fuel, packaging, boxes, and plastic. Therefore, we are highly conscious of recycling. In China, we educate our franchisees and provide excellent recycling programs. We plan to do the same in Thailand,” he said. “We started our company with a single question: ‘How can we make the entire transportation system more efficient?’ We use our proprietary technology to improve trucking utilisation, and we are also exploring the use of EVs to reduce carbon emissions.”
Currently, Chow said that BEST Thailand is working to further enhance the performance and efficiency of its local franchisees, allowing them to focus on excelling in their part of the business while entrusting BEST to support their overall logistics operations. This, in turn, would help strengthen trust with its customers. BEST Inc. is a leading provider of integrated smart supply chain solutions and logistics services in China and Southeast Asia. Currently, the company has four subsidiary units under its umbrella: BEST Global, BEST Supply Chain, BEST Freight, and BEST Cloud.
