ENG

Bangkok Warehousing 2024: Adapt to Evolving Market Needs

21 March 2024

Bangkok's warehousing market is undergoing a transformation as dynamic as the city itself. In 2024, the landscape is defined by rapid technological advancements and shifting economic currents. Businesses are finding that staying ahead means adapting quickly to these changes.

 

With e-commerce booming and consumer demands skyrocketing, efficient logistics have never been more critical. Companies are seeking innovative solutions to streamline operations and stay competitive in Bangkok's bustling economy. They're turning to smart warehousing and data-driven strategies to meet the evolving needs of the market.

 

As the city's infrastructure expands and the digital frontier advances, the warehousing sector stands at the precipice of a new era. Those who embrace the change are poised to thrive, transforming challenges into opportunities for growth.

Overview of Thailand's Freight and Logistics Market

Thailand's freight and logistics market is experiencing impressive growth, driven by an expansion in e-commerce and consumer demand for quick delivery times. This rapid increase necessitates the adoption of innovative logistics strategies and enhances the importance of robust and efficient warehousing solutions in Bangkok.

 

As the capital city, Bangkok is at the heart of this transformation, leveraging advances in technology to streamline warehouse operations. Smart warehousing solutions, which utilize data analytics and Internet of Things (IoT) devices, are becoming integral to the logistics processes in the city.

 

The Thai government’s commitment to improving infrastructure has further fueled this growth. New roads, airports, and an enhancement of the public transportation system are evidence of this commitment, directly benefiting the logistics industry by improving connectivity and reducing transportation times.

 

In this fertile environment, Corporate investment is surging. Foreign and local companies are capitalizing on the growing market, which is projected to expand significantly. According to the latest forecasts, the global warehousing market is expected to reach USD 88.10 billion by 2024. This uptrend will continue, reaching an estimated USD 119.26 billion by 2029, growing at a Compound Annual Growth Rate (CAGR) of 6.24%.1

 

Year Projected Market Size (USD Billion) CAGR (%)
2024 88.10 -
2029 119.26 6.24

 

 

The synergy between economic expansion and technological advancements characterizes the current state and future of Bangkok’s warehousing market. Enterprises that anticipate and adapt to these shifts are poised to gain a significant competitive edge. The e-commerce boom only underscores the necessity for a dynamic and responsive logistics sector, capable of fulfilling orders with heightened efficiency.

 

Forward-thinking businesses are recognizing the inherent value in data to optimize warehouse management. Real-time inventory tracking, predictive analytics for demand forecasting, and automated material handling systems are just a few of the innovations being implemented to ensure the capabilities remain aligned with the escalating demands of the market.

 

Current State of Bangkok's Warehousing Market

The warehousing market of Bangkok is presently undergoing significant changes to keep pace with the evolving demands of the e-commerce landscape. The new supply slated for release stands at a substantial 191,888 rai anticipated to become available by 2024. This development highlights the rapid growth and continued investment in the sector, marking a pivotal moment for businesses and investors alike.

In tracking market dynamics, vacancy rates are a critical metric. They've seen an uptick to 16.9% in the third quarter of 2023, rising from 15.6% in the preceding quarter. Despite this increase, the underlying market sentiment remains optimistic, reflecting a growing warehousing market that is adjusting to the inflow of new spaces.2

Simultaneously, warehouse rents are revealing telling trends. The average asking rent for Ready Built Factories (RBF) has escalated to a notable THB100-230 per square meter per month. While this rise in costs could pose a challenge for some, it also signifies a maturing market where quality space commands a premium.3

This nuanced picture of Bangkok's warehousing market poses both opportunities and challenges:

  • On one hand, the additional supply of space can support the burgeoning demands of online retailers and logistics operators.
  • On the other, the need to maintain low vacancy rates could drive innovation in warehouse utilization and management.

Companies at the forefront are now tasked with not only acquiring space but optimizing their use of it through strategic planning and advanced technologies.

 

Metric Q2 2023 Q3 2023
RBF Vacancy Rate (%) 15.6 16.9
RBF Average Rent (THB) 100-230 -

 

The proactive approach demonstrated by businesses in response to these shifts is a strong testament to their adaptability. By leveraging analytical tools and embracing automation, these firms stay ahead in a competitive landscape that's continually reshaped by technology and consumer behavior. As Bangkok's warehousing market evolves, those who can nimbly navigate these complexities will likely emerge as industry leaders.

 

Emerging Trends in Warehousing and Logistics

The landscape of warehousing and logistics in Bangkok has rapidly evolved, with advanced technologies and strategic innovations dictating the pace of growth. This city's warehouses are transitioning from mere storage locations to sophisticated operational centres. They now play a key part in smart communities and city logistics, emphasizing the critical role in last-mile delivery to cater to the burgeoning e-commerce market.

 

Key to this evolution is the integration of smart technology, allowing warehouses to become more efficient and responsive to the dynamic market needs. Automation and robotics have been at the forefront of driving these changes, reducing human error and speeding up processes. Additionally, the advent of the Internet of Things (IoT) has enabled real-time tracking of inventory, creating a seamless link between ordering systems and supply chain management.

 

Bangkok's warehousing sector is also seeing the rise of ‘green’ logistics. Sustainable practices are not just an ethical choice but also a business imperative in the modern market. Warehouses are implementing solar power, energy-efficient lighting, and green building materials to reduce their carbon footprint and operational costs.

The development project spanning a massive 4,700-rai plot is a testament to the city's commitment to revamping its logistics infrastructure. It aims not only to provide state-of-the-art warehousing but also to integrate these facilities with residential and commercial spaces. This holistic approach caters to the convenience of fulfilling logistical needs while also enhancing the quality of life for residents. The project resonates with the city's vision for future-ready logistics hubs that are seamlessly woven into the fabric of urban development.

 

Investors and companies navigating Bangkok's warehousing market must recognize these trends and adapt swiftly. By leveraging advanced technologies and innovative solutions, they can enhance operational efficiencies and better meet the demands of a fast-paced urban ecosystem.

 

 

Sectoral Demand and Investment Trends

Bangkok’s warehousing market is undergoing a dynamic shift, influenced by the varying demands of different sectors. The e-commerce boom has fueled a substantial need for robust logistics solutions. Retailers, now more than ever, are in search of efficient warehousing to minimize delivery times and cater to the surge in online shopping. Electronics and automotive sectors have similarly shown a resilient increase in demand, reflecting broader economic trends and consumer preferences.

 

In contrast, declines have been observed in sectors such as garments, chemicals, and construction materials. These dips reflect changing economic landscapes and a shift toward more digital and service-oriented sectors. Investors and warehouse operators need to take note of these trends to align their capacities and services with current market demands.

 

Investment influx in Bangkok's warehousing sector is notably coming from a diverse array of international sources. Active investors from the US, Singapore, Thailand, and China are demonstrating their confidence in the region's potential. Their investments are not just financial but also technological, bringing in an array of advanced warehousing solutions that are revolutionizing the industry.

 

The following table outlines the sectoral demand trends in Bangkok's warehouse market:

 

Sector

Demand Trend

E-commerce

Strong Increase

Retail

Substantial Increase

Electronics

Resilient Increase

Automotive

Noticeable Increase

Garments

Decline

Chemicals

Decline

Construction Materials

Decline

 

Given these trends, businesses are encouraged to assess their operational strategies. For many, this means a shift toward smarter, more flexible warehousing solutions that can readily adapt to the ebbs and flows of sectoral demands. The role of warehouses is transitioning from static storage spaces to dynamic logistical hubs, underpinning the efficiency of the entire supply chain in this bustling metropolis.

 

Conclusion

Adapting to Bangkok's dynamic warehousing market isn't just an option—it's a necessity for businesses aiming to stay competitive in 2024. With e-commerce propelling the demand for innovative logistics, companies must embrace advanced technologies and flexible strategies. The shift in economic tides has shown a decline in traditional sectors, urging a reevaluation of warehousing needs. As international investments pour in, they bring cutting-edge solutions that local businesses can leverage. To thrive in this evolving landscape, stakeholders must align their operations with the new wave of smart warehousing, ensuring they're ready to meet the challenges and opportunities of tomorrow's market.

 

Source:

1. Thailand Freight and Logistics Market Insights [Internet]. [cited 2024 Jan 9]. Available from: https://www.mordorintelligence.com/industry-reports/thailand-freight-and-logistics-market#:~:text=The%20Thailand%20Freight%20and%20Logistics,26%20billion%20by%202029

2. THAILAND MARKETBEAT REPORTS [Internet]. [cited 2024 Jan 9]. Available from: https://www.cushmanwakefield.com/en/thailand/insights/thailand-marketbeat

3. Industry Outlook 2023-2025 Warehouse [Internet]. [cited 2024 Jan 9]. Available from: https://www.krungsri.com/en/research/industry/industry-outlook/logistics/warehouse-space/io/io-warehouse-2023-2025#:~:text=For%20rental%20rates%2C%20the%20total,2021%20(source%3A%20WHART)

 

 

Related Topics
All

Shared

View more in blog

11.11.2024

Difference between a Data Center and a Data Warehouse

Learn the key differences between a data center and a data warehouse. Understand their unique purposes, architecture, and how each supports data storage, management, and analysis in businesses. Find out which solution best fits your organizational needs for secure storage and efficient data processing.

27.09.2024

Renting Factories and Warehouses in Today's Economic Climate

Explore the benefits and challenges of renting factories and warehouses in today's fluctuating economy. Learn how businesses can adapt to current market trends, optimize operational costs, and secure flexible industrial spaces for growth.

26.09.2024

Thai's Rating of Energy and Environmental Sustainability for New Construction

B2.9/2 PLOT P25 PIN1

28.08.2024

Key Considerations for Short-Term vs. Long-Term Warehouse Rentals

Explore the key considerations when choosing between short-term and long-term warehouse rentals. Learn the benefits, costs, and factors to help you decide the best option for your business storage needs.

01.08.2024

Cross-Docking: Benefits and Implementation Strategies

Discover the advantages of cross-docking for your logistics operations. Learn how to reduce storage costs, improve delivery speeds, and streamline your supply chain.

06.06.2024

Thai's Rating of Energy and Environmental Sustainability for New Construction

AMN-M1.7 Plot G702/20 (Ready-built Factory

21.03.2024

Logistics and Connectivity: The Strategic Advantages of Chonburi’s Industrial Estates

Strategically nestled in the heart of Southeast Asia, Chonburi's industrial estates boast unparalleled logistics and connectivity. They're a magnet for businesses looking to tap into dynamic markets. With state-of-the-art infrastructure, these hubs are transforming the landscape of regional trade.

21.03.2024

Bangkok Warehousing 2024: Adapt to Evolving Market Needs

Bangkok's warehousing market is undergoing a transformation as dynamic as the city itself. In 2024, the landscape is defined by rapid technological advancements and shifting economic currents. Businesses are finding that staying ahead means adapting quickly to these changes.

21.03.2024

Sustainable Practices for Modern Warehouses

In today's eco-conscious market, sustainability isn't just a buzzword—it's a business imperative. Modern warehouses are at the forefront of this shift, adopting practices that reduce environmental impact while boosting efficiency. They're proving that going green can mean more than just saving the planet; it can save on costs, too.

14.02.2023

Everything You Need to Know About Getting a Factory License in Thailand

On October 27th, the Factory Act came into effect, creating adjustments to aid factories in becoming more comfortable and adaptable in the market. According to this new act, a factory is define as a building, place, or vehicle with at least 50 employees or machinery with a total power of 50 horsepower or more. This marks a major change from the 1992 Factory Act, which set the criteria for 5-20 horsepower and/or 7-20 employees.

13.12.2022

How Smart Warehouses are Using IoT Devices

The world is changing, and the internet of things is at the forefront of this change. Businesses of all types are beginning to adopt IoT (Internet of Things) technology in order to improve efficiency and bottom lines.

28.10.2022

5 Factors to consider when choosing a location to rent a Factory

There are several points to take into consideration when choosing a proper location to rent a factory in Thailand. These Factors are important for the supply chain and logistical processes of your business therefore the next time you are renting a factory, do proper research and evaluate the options you have. This will affect all aspects of your business from branding, employee workflow to your customers' satisfaction. However, in order to make an informed decision, this article will run through the main points to get the best out of your factory rental.

28.10.2022

Factory for rent in Chonburi – Pros & Cons

Chonburi is located in the north-eastern part of Thailand. This province, located just about 64km away from Jomtien beach and 60km from Pattaya beach, is known as one of the most popular destinations among tourists for its beautiful beaches, natural beauty, cultural heritage, and friendly locals. It is also a good location for living with a lot of greenery, clean air, and fresh water.

28.10.2022

Warehouse and Warehousing - what is the difference?

Warehouses are associated with storing goods. Many businesses use these facilities to store their products, such as raw materials, packing materials, components, or unfinished goods until they are ready to be shipped to the distributor or manufacturer where it turns into finished goods.

28.10.2022

Warehouse for Rent in Chonburi – Pros & Cons

Chonburi is located in the north-eastern part of Thailand. This province, located just about 64km away from Jomtien beach and 60km from Pattaya beach, is known as one of the most popular destinations among tourists for its beautiful beaches, natural beauty, cultural heritage, and friendly locals. It is also a good location for living with a lot of greenery, clean air, and fresh water.

01.08.2022

8 Tips When Looking for Warehouse Space

If you are a business owner looking for a new warehouse space, it is paramount that you know exactly what you need before starting your search. First, you must do plenty of research and put together a solid plan of action. That way, when you do start looking at prospective warehouses, you can save time by instantly recognising which units are unfit to accommodate you, and which units should immediately be added to your shortlist of potentials.

07.07.2022

Built-To-Suit Warehouses are on the Rise, why Purpose built Warehouses and Factories make sense for Businesses

As e-commerce demand continues to grow, built-to-suit warehouses are becoming more and more popular. But what is a built-to-suit warehouse and why are they so valuable for e-commerce retailers and logistics companies alike? In this article, we’ll tell you everything you need to know!

22.06.2022

A Guide to Cold Storage Warehousing

Cold storage and transportation is what makes it possible to send fresh foods and medicine all over the world without the risk of unnecessary storage. If you’ve ever wondered how your favourite ice creams gets delivered to your local shop – that’s how!

12.05.2022

How AI and Automation Are Impacting Warehousing in Thailand

The impact of AI in warehouse automation has been revolutionary as it is leveraged across multiple multiple applications such as robotics, computer vision, and language processing tools to streamline warehouse operations. In this article, we’re going to look at how AI and automation are impacting warehousing in Thailand, and what it means for the future

07.04.2022

Buying or Renting a Factory – Which is best?

There are a number of important factors to consider when you are trying to decide whether buying or renting a factory is the best move for your business. In this article we’re going to explore these factors, ask some important questions, and try to determine which would be the best option for you. Read on to find out more.

08.03.2022

Why Warehouses in Asia are on the rise in 2022

Warehouses are in high-demand all across the world at the moment and in 2022 we’re only going to see that popularity rise even higher. But why is that? What’s with all of the hype and desire for warehouses right now? In essence, businesses (especially retailers) are running out of room to hold all of the items that we are ordering online.

03.02.2022

Advantages of Renting a Factory or a Warehouse

When business owners and entrepreneurs look to expanding their business operations, one of the biggest challenges is finding an appropriate factory or warehouse that can support and encourage future success.

14.10.2021

Good Manufacturing Practice (GMP) – What it is, what it covers and what the benefit are

In this article, we are going to explore GMP (good manufacturing practice), and what benefits it can bring to your business. As with any industry, in order to experience the highest levels of success, one must adopt the best practices in everything that you do, whether it be manufacturing, customer service, or hospitality. By gaining a thorough understanding of these ‘good practices’, you can optimize your business to function at peak performance, increase profits, and bolster your brand reputation. Let’s get stuck in!

14.10.2021

Supply Chain Challenges and how a Warehouse can take your business Forwards

There have always been challenges in the supply chain, and what with the COVID-19 pandemic, many of these issues have been exacerbated. In any case, as business owners are faced with new challenges it encourages innovation—which leads to some surprising ways to overcome said challenges. One thing that can really help drive your business forward and combat a number of supply chain issues is by investing in the appropriate warehousing. But, before we get into that, let’s look at some of the biggest problems faced and what might be done to combat them.

01.09.2021

Factory Rentals in Thailand - All you need to know

Are you looking for factory rentals in Thailand? If so, then you may be feeling a little overwhelmed at the task; trying to find the ideal premises in a strategic location, and for the right price. But don't panic! It's not as difficult as you might think, particularly when you do your research.

11.08.2021

Warehouses in Thailand – What you need to know.

Whether you are a new business owner looking to expand, or you are long-established and simply need to upgrade, having a warehouse comes with a great number of benefits. As someone who is unfamiliar with warehouses or is perhaps looking at them for the first time, then you’ll need to plan your approach with careful consideration.

02.08.2021

Warehouse Security and our approach to Dangerous Goods Warehousing

A large explosion and fire destroyed the Ming Dih Chemical factory compound that had been producing plastic foam and pellets in Tambon, Rachatewa, causing extensive damage to the surrounding communities, earlier this month in July 2021.