Lazada Thailand boosts logistics sector with sorting facility

Lazada Thailand has set the stage for fierce competition in the local logistics sector by investing heavily in a state-of-the-art sorting facility, its largest investment in Southeast Asia. This move anticipates a boom in the e-commerce market, predicted to hit US$32 billion by 2025.

Simultaneously, Kerry Express is increasing its logistics operations’ accuracy and efficiency by integrating automation technology and digital mapping.

Last year, Lazada Express was one of the few profitable entities, with a revenue of 16 billion baht, and a profit of 2.7 billion baht, according to Creden Data, a data analytics firm, revealed James Marchant, Lazada Thailand’s chief of logistics.

“We are investing in our new sorting facility which is the largest investment in our logistics business in Thailand and Southeast Asia.”

Situated in Samut Prakan, Thepharak Sortation Centre employs advanced automation technology and will function alongside Lazada’s two existing facilities in Suksawad Phra Pradaeng and Chachoengsao.

This will boost Lazada’s sorting capacity to over two million parcels per day.

Automation and AI Technology

The new centre’s automation and artificial intelligence technology will quadruple the speed of manual sorting centres, reduce the building’s space usage, and enhance productivity, efficiency, and accuracy, according to Marchant.

Last year’s Google e-Conomy SEA report projects that the local e-commerce industry’s gross merchandise value, standing at US$22 billion last year, will reach US$32 billion by 2025, with a compound average growth of 13% from 2022 to 2025.

Lazada Logistics emphasizes quick and seamless order delivery, offering a priority delivery service option that is in high demand among consumers, said Marchant.

“We expect this new sorting facility will have a return on investment within three years, depending on volume.”

The 35,000 square metre Theparak sorting centre is Lazada’s largest facility in Thailand.

Nutthapol Kriengchaivate, senior vice-president of Lazada Logistics Thailand, stated that the centre is part of the company’s one-stop logistics solution, which includes delivery services through Lazada Express, fulfilment services for online sellers, and a new multi-channel logistics service for online vendors selling on multiple platforms.

Lazada Logistics

Lazada Logistics currently supports around 50% of its parcel platform, also utilising third-party service providers, Nutthapol said.

“We use third-party delivery providers in areas where our partners are more efficient in terms of cost and coverage and expertise,”

The new sorting centre spends less than two hours from the inbound process and sorting parcels to outbound preparation for distribution centres in other locations, Nutthapol added.

“We use automation that makes less use of staff and paper, with 360-degree AI cameras that speed up work and accuracy,”

Citing a company survey, Nutthapol said that 43% of Southeast Asian shoppers expect next-day delivery, and 55% of respondents were satisfied with fast delivery options, which increased their purchases.

Lazada Thailand launched its priority delivery service in September last year, allowing shoppers to receive their parcels within two days of order confirmation.

This service applies to orders fulfilled by sellers, with next-day delivery for orders fulfilled by Lazada. The priority delivery service is currently available in 23 provinces, including Bangkok and the surrounding metropolitan areas of Chon Buri and Nakhon Ratchasima. Lazada plans to extend the priority delivery nationwide within four years, reported Bangkok Post.

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