Cainiao Network, (“Cainiao”), the logistics arm of Alibaba Group, has announced the launch of its economy sea freight route to connect Ningbo, China to Bangkok, Thailand, amid surging e-commerce demand from consumers in the region. Operating thrice weekly, the dedicated e-commerce sea freight route will service orders placed on Tmall and Taobao, two of Alibaba’s e-commerce platforms, with delivery as fast as 15 days.
This service is launched in addition to the existing trucking service to Thailand in order to provide consumers with a more affordable shipping option, especially on smaller shipments. This has resulted in a nearly 50 per cent reduction in shipping costs, from US$2.6/kg to US$1.4/kg.
The new economy service now meets local consumers’ preference for more economical shipping options considering new consumer purchasing behavior, which typically reflects higher purchasing frequency of small and lighter items online. Cheaper shipping options means that shipping costs remain low relative to the item cost, thereby reducing barriers to purchase – similar to Cainiao’s recent partnership with a Singaporean grocery retailer.
Here, parcels designated for Thailand will first be sorted in Cainiao’s consolidation warehouse in Yiwu, China before they are being transported to Ningbo port for sea shipping. Upon arrival in Bangkok’s port, the parcels will be handled by Cainiao’s logistics partners for local distribution and delivery.
According to J.P. Morgan’s latest Payments Trends Report for Thailand in 2020, Thailand’s B2C eCommerce market has been growing steadily since 2017 and is now worth US$27.7 billion. Growth is expected to continue at a compound annual growth rate (CAGR) of 7.7 per cent in 2023, where cross-border e-commerce takes almost 30 per cent of the overall eCommerce market in Thailand. To date, nearly half of online consumers in Thailand have already made a purchase from abroad.
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