This is part of our ‘Breaking into Thailand’s eCommerce Market’ series, where eCommerce opportunities in Thailand and how best to reach Thai online shoppers and how to deliver the best eCommerce experience to them are explored.
Previously in Part 1 covered Thai customers’ behaviours and how you can reach them online. If you haven’t seen it yet, you can read it here.
Here in part 2, we’ll find out more about the types of logistical pitfalls we need to avoid in Thailand and how to deal with them to provide a smooth shipping experience for your customer. Topics covered here are:
eCommerce Deliveries in Thailand
Dealing with Missed Shipments
Preparing Alternative Last Mile Options
Standardizing Addresses in Thailand
It is said that order fulfilment is the last and most crucial step towards ensuring customer satisfaction. The crux of this is deciding on a timely, cost-effective and transparent method of distribution. By getting this step right, you’ll be on your way to building a loyal group of customers in Thailand.
Know of Thailand’s great eCommerce market potential but need an eCommerce Logistics partner to help you out? Janio’s flexible, end-to-end logistics solutions has options for both B2C and B2B shipments into Thailand from Southeast Asia and beyond. Reach out to our supply chain consultants for free below!
In Thailand, the majority of eCommerce purchases occur in urban areas in the Bangkok Metropolitan Region (BMR) which consists of Bangkok and its 5 surrounding provinces. In this urban region, delivery straight to the customer’s doorstep is the main eCommerce fulfilment method. While that sounds simple, this method is not without its challenges.
Bangkok’s traffic jams now rate among the world’s worst1, with an average of 64.1 hours stuck in traffic jams in 2017. What this means is that trucks delivering parcels to your customers could also get caught in these jams, potentially missing the delivery time slot. The customers themselves might also be victims of bad traffic, preventing them from being home when the delivery arrives.
If neither the delivery nor the customer is there during the delivery time slot, the delivery fails. Not having a plan for when this happens could increase costs due to repeated delivery attempts and cause frustration for both your team and your customers.
Finally, Thailand’s addresses may not follow a common format, especially when comparing urban and rural addresses. Having a standardized format for addresses could save you and your shipping partner headaches when dealing with these.
To tackle these challenges, you could consider the following solutions to deal with them:
Having nobody around to receive your shipment when it arrives is never a pleasant experience. We definitely want to avoid putting your customer through the hassle of personally picking up the goods from the shipping partner’s local branch or depot. Fortunately, a fairly simple solution to this exists.
Notifications can be sent to the customer to remind them to be present when the delivery is made. This can help to reduce the chances of these additional deliveries failing by providing transparent and responsive communications with the customer regarding their delivery.
On the off-chance that your delivery arrives at an address with nobody around to receive the parcel, you can consider having multiple delivery attempts on the same day before the delivery man returns to base. This way, you increase the chances that the delivery arrives when the customer is available to receive it.
If the initial delivery attempts fail on that date, you can give the customer the option to reschedule their last-mile delivery to a different day. Also, it’s a good idea to negotiate with your service partner to provide this service for your last mile segment of the delivery.
One alternative delivery option you can consider in Thailand is dropping off parcels at smart lockers or pick-up and drop-off kiosks. Both of these delivery options are fairly similar, except that smart lockers are automated while drop-off kiosks are manned.
With these options, the customer can pick up the delivered items at the locker or kiosk any time at their convenience. By fulfilling part of the last mile journey on their own, this can save you delivery time which may have ended up wasted in traffic jams. Currently, these are being rolled out around Bangkok and other urban areas in Thailand.
One big advantage of these methods is that the recipient doesn’t personally need to be present when the item is delivered to the smart locker or kiosk, which can reduce failed deliveries. As the customer picks up the parcel from the pick-up point himself, you can also save on last mile costs.
To better understand how these methods work, let’s have a look at the standard operating procedure when delivering parcels to smart lockers:
Shipping partner’s delivery staff logs in with company credentials on the smart locker’s touch screen terminal
Customer’s information is accessed on the terminal
A suitable locker is chosen
The parcel is scanned and placed into the compartment
The compartment is locked and the delivery is confirmed.
On the customer’s end, he/she needs to do the following:
The customer selects ‘Parcel locker’ when checking out of your online store
The customer receives a notification via email or SMS with details on package pickup and the code for unlocking the parcel locker
The customer can track the shipment and will be notified when it has arrived at the locker
When the parcel arrives, the customer uses the code at the locker to unlock the compartment
If the package is not picked up, it will be sent to the nearest branch of the shipping partner
As for pick-up and drop-off kiosks, the process is similar except that a staff member of the kiosk service will be on hand to facilitate the drop-off and pick-up of the parcel.
However, if the customer hasn’t picked up the package from the pick-up point and the delivery fails, it’s a good idea to implement the standard operating procedures to deal with missed shipments discussed earlier.
A lack of standardization of house numbers and street names may also pose challenges for international merchants looking to ship into Thailand. In urban areas, homes and streets are usually numbered according to the time they were built instead of their position in an area. For instance, a house numbered 12 can be next to a house numbered 532.
Where roads in villages do not bear names, most locals identify roads by landmark location. Fortunately, there are shipping partners in Thailand who are familiar with these types of addresses in both urban areas and rural areas.
To get a more standardized set of customer addresses, you can also use the Universal Postal Unions3 codification of addresses format when your customers are checking out their purchases. This format starts with the smallest, most specific unit of identification and progresses to the largest. One format4 for Thai addresses you can use looks like this:
Building name (if any)
Plot, House number, Village (if any), Road, Soi (if any)
Province, Postal Code
Last-mile delivery is one of the most important portions of an eCommerce customer experience. Having a seamless delivery experience can keep your customer satisfied and your brand’s reputation safe.
By preparing for potentially missed deliveries, good alternative delivery options and a standardized way of getting customers’ addresses, success in Thailand’s challenging but lucrative eCommerce opportunity is within your reach.
If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.
Interested in Thailand’s eCommerce scene? Check out our Breaking into Thailand series:
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