Hong-Kong based 3PL Kerry Logistics’ delivery arm, Kerry Express, has entered into agreements with VGI, the multimedia subsidiary of Bangkok Mass Transit System (BTS), which will enable the parcel company to use the BTS Skytrain to extend its express delivery services.
Under the deal, which was signed last week, Kerry Express will issue 23% of its shares to VGI amounting to about US$1.8 billion.
Kerry Express will also have the first right of refusal to set up service outlets in all BTS Skytrain stations for services such as parcel collection and drop-off.
"The investment this year will mainly focus on infrastructure for parcel delivery service, enabling Kerry to deliver 1 million parcels a day by the end of this year, up from 750,000," said Alex Ng, executive director of Kerry Express Thailand, the company's headquarters for Southeast Asia.
Large market share
In Thailand, Kerry Express operates 600 distribution centres, 11,000 vehicles and over 2,500 parcel shops and service points. The company offers same day-delivery in Bangkok and next day delivery service throughout the country.
It has secured an 80% market share (excluding Thailand Post) in parcel delivery. The company is focusing on an online-to-offline strategy, offering retail services and drop-off points for merchants and customers.
According to Mr Ng, Thailand's e-commerce market is still in its infancy and there is room to grow at double-digit figures over the next two years. Parcel delivery service is expected to grow on par with e-commerce, he added.
Nol van Fenema