What is the future direction of Warehouse Business in Thailand?

Since Covid-19 pandemic crisis, people have changed their ways of lives tremendously. Information Technology, during this crisis, has been developed by leaps and bounds in order to meet the needs of transformed lifestyles. Besides, it also affects economy of all sectors such as service sector, tourism, trading, real estate and construction, manufacturing, imports, exports and other consumption sectors.

Nevertheless, there are both positive and negative effects to businesses during the spread of Covid-19 pandemic. Warehouse is one of the businesses that receive positive impacts from the crisis because e-Commerce sector and food delivery grow drastically as the result of changing consumer behaviors and these two industries need warehouses to store their bulk load of consumption goods.

Department of Business Development under the Ministry of Commerce has divided rented warehouses into 3 categories which are.

✅General Warehouse

To keep general goods such as raw materials, car parts

✅Refrigerated/Frozen Warehouse

Temperature is set at the lowest degree to maintain condition and control quality of perishable goods such as agricultural products, marine products

✅Temperature-controlled Warehouse

Temperature and humidity must be controlled to keep the quality of granular products such as rice, cassava, flour, corn

During 2020-2021, various types of warehouses had arisen from the past Covid-19 crisis. Therefore, many entrepreneurs design to expand their warehouses continuously in order to meet the growing demand of consumption.

▶️The booming era of General Warehouses

e-Commerce business growth since 2020 has caused more demands for warehouse space rental because the growing number of B2C consumers with changing behaviors has moved to shopping online and practiced online financial transactions during Covid-19.

▶️The ups and downs of Refrigerated/Frozen Warehouse

The lockdown during Covid-19 outbreak had negative impacts over export sector in Thailand which reduced the demand for refrigerated warehouses even though agricultural products has been growing continuously. For fishing industry, even the businesses did not perform very well because the government returned all the foreign workers back to their home countries. It did perform better in 2021.

▶️The recovery stage of Temperature-controlled Warehouse

This type of warehouse has recovered since 2020 because of increasing production in grains and agricultural products. The most important factors for increasing production are the weather condition and the water level which leads to the increasing demand of temperature-controlled warehouses.

Overall, we could say that the overview of warehouse businesses during this year has grown 3.3% with supporting factors from export and production sectors such as instant food business, medical tools, medicines, and e-Commerce goods which increased by 25-30%

Warehouse business in Thailand has potential to keep going forward!

On the one hand, IMF expects global economy to grow by 3.0 – 4.0% per year. On the other hand, Krungsri Research assumed that Thai economy would grow 3.5 – 4.0%. For e-Commerce business, it expects to continuously increase by 20-25% per year which results in higher demands for warehouse rental in order to meet the needs for storage spaces.

How should Warehouse Business adapt if the crisis comes back?

Although it has been more than 2 years of Covid-19 pandemic, the spread still continues. All the issues and problems that causes all the ups and downs for businesses have been many lessons learned for businesses to adopt and adapt in order to survive.

Even though warehouse businesses still grow during the crisis, we should still prepare for the risks and all the worst-case scenarios that could happen to the business in order to be able to manage inventory and proceed with warehouse management through all the circumstances without affecting work efficiency

▶️Inventory Management

Frequently maintain the quantity of inventory especially Fast – Moving products in the storage at the amount enough to satisfy consumer needs
Add the amount of Safety Stocks in case of uncertainty lead time and uncertainty demands from consumers
Leverage the Reorder Point to correspond with the increasing demand from customers
Set control measures to shorten delivery lead time
Limit the number of products that consumers can purchase especially the products that are limited in amount but has great demand from consumers

▶️Warehouse and Space Management

Focus on decentralized storage space to thoroughly place the goods in storage to meet the needs of the customers
Increase the space to support the products that are highly on demand
Place the Fast-Moving product close to the exit in order for the convenience of pick up and preparation for delivery
Separate the storage which can be highly contaminated
Implement the system that help workers perform all the works in the warehouse in order to reduce errors and work even smoother such as using Warehouse Management System or WMS to help with Warehouse management

In conclusion, Changes in consumer behaviors to shop and perform online transactions will continue to drive warehouse business to grow and expand even more in the future.

So, is your Warehouse Business ready to move forward?

MOLOG WMS can help you turn your Warehouse Business into the modern one!! 😊

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