• 
• 

Published on November 6, 2007

 In the complex world of logistics and customs procedures, a two-year-old Thai electronic-services company is beginning to stand out as the way of the future.

Netbay is Thailand's third provider of paperless customs procedures, employing an electronic business information system called Electronic Business using eXtensible Markup Language, or ebXML. The aim is to allow exporters and importers to complete their entire exchange of documents with the Customs Department without using any paper. But unlike the others in the market, Netbay is also offering a wide range of electronic services related to logistics.

Netbay is a joint venture between two long-standing information technology firms, Software Link and Internet Thailand, with a stakeholder ratio of 60:40. So even though the company is a new player in the market, it comes from long experience.

Having been set up in 2005 with a registered capital of Bt10 million, Netbay has the ambitious goal of becoming an e-logistics leader in the Asean region within three years.

That mission is led by managing director Pichit Viwatrujirapong, 48, whose company, Software Link, became Netbay with the creation of the joint venture.

He believes that technology, particularly electronic systems, will play a key role in bringing success to Thailand's manufacturing and exporting strategies in the near future.

After entering the market as the third player, competing with Trade Siam and CAT, Netbay claims to have captured a 40-per-cent share of the market, based on the number of transactions. It has about 900 customers, of which 20 to 25 per cent are large corporations and multinational companies.

Last year, its revenue was Bt20 million. It expects this year's revenue to be around Bt50 million. Of this, about 60 per cent will come from non-Thai customers and the rest from Thai firms. Its revenue is expected to jump to Bt90 million next year.

The company's rapidly growing revenue comes from extended services that are not limited to Electronic Data Interchange, such as Export and Import Declaration Systems. While its rivals provide only e-shipping, e-container and e-manifest, Netbay has come up with e-Cargo Permit, e-Transit Transfer, e-Cargo Express Consignment, e-Custom House (in six provinces), e-Payment, e-Cargo Management System, e-Vendor Management System, e-Warehouse Management System, and e-Transportation.

All of these e-services, which have been designed and developed by the company's 40 programmers, can be tracked in real-time over the Internet.

"Most of our revenue comes from the new service areas, instead of traditional sources of revenue, where transaction fees are limited to Bt15 per transaction," Pichit says.

The company's revenue model consists of three parts: transaction fees, making up about 40 per cent of revenue, with service fees and "solution fees" generating the rest.

Even though he lacks a background in information technology, Pichit realises that the nature of his company's business and its services infrastructure can be applied and developed over a wider area of the logistics business.

Its services are structured around the ideal of providing seamless and smooth transactions. Pichit says research in the US showed that in every trade deal there are about 22 transactions, and most of them are very similar. So Netbay has designed electronic systems to guide trading procedures through most of these transactions easily and more rapidly.

In their broadest aspect, Netbay's services aim to allow all participants in the logistics chain, including exporters, importers, shipping and customs brokers, freight forwarders, air-freight and shipping companies, transport service providers, local logistics providers, cargo terminal operators and insurance companies as well as banks and government departments - such as the Custom Department, the Board of Investment and Airports of Thailand - to process export and import trading electronically and seamlessly. Netbay has become a one-stop contact point in the import and export business, providing total value-added services.

"The electronic system will turn a lot of messy transactions into easy stuff," Pichit says. "It can improve the efficiency of the country's logistics and its competitiveness."

Netbay expects to be listed on the Stock Exchange of Thailand within three years, when it projects revenue exceeding Bt200 million per year.

Asina Pornwasin

 The Nation