KEX ends 2021 with record-breaking delivery volume growth of 30%. Continues to lead price-setting. Short-term investment for long-term growth, key partnerships announced
15 Feb 2022
KEX reported an impressive 30% year on year delivery volume growth and THB 18.8 billion in annual revenue, despite the impact of economic setbacks and continuous uncertainty. Throughout 2021, KEX carried on the aggressive pricing approach to widen leadership in Thailand’s express delivery market while proactively investing in short-term margins to assure its service excellence, enhancing its medium-to-long-term absolute competitiveness. The company, together with its partners, has announced several collaborations to enlarge its ecosystem and serve unmet demands in different market segments, fostering new growth and additional revenue streams.
Mr. Alex Ng, CEO of Kerry Express (Thailand) Public Company Limited (KEX) commented, “Our uncompromised market leadership strategy and aggressive pricing approach have led to an astounding 30% growth in number of shipments delivered, 32% increase in monthly active users and significantly enlarged market share, with reported revenues of THB 18.8 billion in 2021. With our affordable price offered, we have been able to deepen our penetration into every market segment including e-commerce, social and live-stream commerce communities. We treat it as an investment of short-term margin for long-term leadership. 2021 was filled with challenging external factors, including the spread of Delta and Omicron variants, economic slowdown, rising domestic oil prices, tightening labour market and lackluster growth of e-commerce and social commerce in Q421. KEX posted 2021 net profit of THB 47 million, an expected level as we have given top priorities to expedite volume and user base growth to widen the market leadership, together with maintaining service excellence.
Health and safety measures have been put in place in response to nationwide COVID situation, particularly the Omicron variant, which can spread faster. Unlike some operators who experienced operation seizures that led to monetary loss and reputational damage during the pandemic, we protect our workforce which may have resulted in a temporary increase in operating cost. Investments in margins were made to prepare extra operating resources for service quality assurance and boost capacity to accommodate volume influx. These extra expenses would continuously decline as the pandemic situation tones down. We are confident that such move will contribute to our long-term leadership and sustainable growth.”
Throughout 2021, we focused on boosting operational and management efficiency through our platform upgrade. Technology has been incorporated in platform development and route management to enhance productivity and optimise costs. In 2022, KEX industrialisation and platform upgrade will accelerate, contributing to substantial efficiency enhancement of our system. Following our synergistic partnership strategy, KEX has also sought out partners with strengths in different domains to boost growth. Joining a number of local business chains through a reseller model to launch Orange Express, our network and service points have significantly been enlarged. On top of this, KEX has recently partnered with GRAB Thailand to introduce door-to-door instant pick-up & express pick-up services. Leveraging on our existing resources, this win-win collaboration will cater a better experience for KEX’s customers, especially those who relish convenient and rapid services at an affordable price, without incurring additional cost. “We are now available in 29,000+ service locations and growing”.
Following our business diversification strategy, KEX will pursue horizontal expansion & vertical integration to further strengthen our competitiveness, profit growth, and grow inorganically. After launching a venture with Betagro Group, KERRY COOL, our state-of-the-art cold delivery platform with standardized, reliable, predictable services with maximum hygiene standard and food safety will expand to serve nationwide consumers this year. Additionally, the company has also announced a JV with Central Retail to establish the country’s first world-class Less-than-truckload (LTL) delivery platform, KERRY XL, serving large, bulky items nationwide. We are confident to take lead in both segments as we are able to serve unmet demand at practical prices, with scalability and efficiency, thanks to Kerry Express’s hub-and-spoke model. We expect our new businesses to be our significant sources of 20% revenue streams from the start of 2023 onwards.
“Given KEX’s strong commitment to adhere our dominance strategy, together with synergistic partnerships and tremendous supports from our shareholders, we believe that we will maintain our leadership as Thailand’s number one express delivery service provider and able to deliver sustainable profitability to all KEX’s stakeholders in the long run.” Added Mr. Alex Ng.