Yamato Transport faces uphill battle in Thai market

Updated : 29.05.2017 / Category Capsule

Japanese delivery service company Yamato Transport Co., Ltd. is struggling to establish a foothold in the Thai market it entered this year.

The Thai market for "refrigerated delivery services was already saturated and Yamato arrived too late," according to a source at a rival firm. Yamato likely will have a hard time achieving its annual sales target of 1 billion baht (about ¥3.2 billion) within five years.

Rakuten Inc. originally wanted Yamato to enter the Thai market after the Japanese e-commerce giant acquired Tarad.com of Thailand in 2009. It sounded out Yamato about starting operations in Thailand, but Yamato reportedly was cool to the idea and responded, "It's too early to enter the market."

Rakuten eventually withdrew from that market in 2016.

Despite these developments, Yamato last August set up a joint venture company with a local firm under the umbrella of SCG, Thailand's biggest business conglomerate, to offer delivery services for items kept at room temperature, refrigerated or frozen. These deliveries began this year.

In Thailand, a Japanese-affiliated local marine product wholesaler has simplified custom clearances between Japan and Thailand, allowing it to deliver fresh fish unloaded at Japanese ports in the morning to Thai restaurants in the evening. Another Japanese-affiliated company has established a network of home delivery services for perishables.

Thai e-commerce firms have created their own delivery services and customers also can pick up their purchased items at stores, leaving little room in the market for new entrants.

Yamato therefore is facing an acute problem in Thailand, in addition to a driver shortage in Japan arising from the surge in items purchased online or by mail order.

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This is a translation of an article from the May 2017 issue of Sentaku.