Surfing the wave at the right time: Flash Group’s case


Although in a sea of giants, the Thai scale-up aims to be the logistics leader for ASEAN e-commerce

Southeast Asian e-commerce is now booming with rosy growth prospects: the trend has already been analysed previously and is now a widespread belief among financial analysts. With a 46% growth rate for 2021, an annual business volume of $80 billion, ASEAN e-commerce has strong prospects for sustained growth, mainly due to the massive increase of online consumers in a few years, with over 350 million more in just 2021.

However, it is important to analyse how the e-commerce industry in ASEAN is changing and to highlight new trends that may lead to new opportunities, both present and future.

For example, a crucial factor that enabled the shift from offline to online retail was the necessary - but sudden and unexpected - increase in logistics traffic in the region's commercial hubs. This happened not only in the larger ports but also and above all in the smaller realities, where people used to live 'on the street' to get commodities.

We must indeed note that Asia is the second most integrated commercial system globally, second only to the European Union. In addition, the regional intra-trade volume here exceeds 58% of the total. It is not surprising that a region that was already best in class for commercial traffic management has managed to evolve and prosper, despite the emergency caused by the pandemic.

In general, many countries in the region (Thailand in particular) are accelerating the implementation of fifth-generation infrastructure networks, intending to reduce disruption during potential lockdown periods.

In this sense, entrepreneurs often refer to the action of ‘surfing the wave when is high, at the right spot and in a favourable wind’. This is this philosophy that has led Flash Group, a Thai scale-up, to attract more than $150 million in its first financing round.

Flash operated in the logistics sector, and in specific in e-commerce logistics. Kosman Lee, its founder, started the company at age 29 and with $1 million, but with the explicit goal of becoming a guiding light for logistics for the ASEAN online sector.

Although ambitious, the project has conquered the hearts of regional institutional investors such as Siam Bank, PTT Oil (Thai oil leader) and Buer capital, a Singaporean fund.

As a result, in the immediate future, the group expects to handle 2 million goods per day in its warehouses, increasing traffic 10-fold compared to the current volume.

However, competition is extremely tough here: industry players such as Best Inc. (China) and Kerry Express (Hong Kong SAR) make Flash’s goal extremely difficult to reach, especially for the short term. In addition, Flash Group wants to develop an in-house e-commerce platform, so as to enter a promising but exceptionally competitive market: it not only would compete with JD (the leader in Thailand), but also with regional conglomerates such as Sea, Grab and Tokopedia.

Such obstacles could discourage any entrepreneur. However, a golden rule of international trade must be remembered: if the pie gets bigger (or it is made bigger) everybody grows with it, and no one can lose in the immediate future. There is no industry in which this phenomenon is as clear-cut as in international logistics traffic.


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