BANGKOK-- Thai e-commerce logistics startup Flash Group has raised $150 million, strengthening its financial muscle to compete in the fierce Southeast Asian market that is home to more than 350 million online consumers.
The fresh funds are expected to increase its capacity by around 10 times to handle 2 million products per day, putting the company on a par with competitors, Nikkei Asia has learned. Flash Group, one of Thailand's top five e-commerce logistics companies, was launched in 2017.
Analysts believe that the online market in Southeast Asia has huge potential, given that countries are rushing to build up their fifth-generation network infrastructure amid the COVID-19 pandemic as consumers move online because of lockdowns or to avoid crowded places.
"That will provide rooms for Flash Group and other existing players to capitalize on opportunities and boost profit. However, competition is also intensified among large domestic and foreign companies," said an analyst at Asia Plus Securities.
Komsan Lee, CEO of Flash Group, said large domestic and overseas companies, such as Siam Commercial Bank group, Thailand's oil and gas conglomerate PTT, and Buer Capital from Singapore, backed the latest round of fundraising.
"Funding will be used in many businesses, such as technology development and building e-commerce platforms that will differentiate it from the rest of the market and increase selling opportunity, service expansion, as well as building new business strategies," Komsan said.
Flash Group is coming up against formidable foreign rivals such as China's Best Inc. and Hong Kong's Kerry Express, both of which are rapidly expanding their operations in Southeast Asia.
Komsan declined to elaborate on the company's plans except to say: "The COVID-19 situation may be a challenging obstacle for us, yet we will continue to move forward on our ASEAN business expansion with a solid development plan in October to December 2021," referring to the 10 countries in the Association of Southeast Asian Nations.
The e-commerce market in Thailand grew 35% to $7 billion in 2019, according to Bangkok Bank's intelligence unit. In the same year, the Vietnamese e-commerce market turned over $11.8 billion and Singapore $5.8 billion. All these markets are expected to grow substantially over the next few years.