(Yicai Global) Dec. 14 -- BEST, a leading Chinese smart supply chain and logistics services provider, will launch Vietnam's most productive sortation center to respond to the growing express delivery demand fuelled by Southeast Asia's booming online economy.

BEST will open a 35,000 square-meter sortation center in Ho Chi Minh City, Vietnam, ahead of the approaching holiday season when the corporate and consumer demand for parcel processing is expected to peak, the Hangzhou-based company announced on Dec. 11.

With an investment of USD8 million, the brand new hub is "the most modern and efficient facility in Vietnam with industry-leading technology and capacity," said Nelson Wu, general manager of BEST Inc. Vietnam. "It will help us ensure a high-quality delivery experience for consumers during peak holiday season and further support merchants and brands to grow their e-commerce businesses."

The center can sort up to one million parcels per day, the highest capacity among such facilities in the country. It will start operations on Dec. 17, and is expected to create over 1,000 full-time and part-time jobs over the next two to three years.

BEST’s launch of the new sortation center comes on the heels of Ho Chi Minh City’s approval to invest USD4 billion in its logistics infrastructure. As one of the government’s strategic breakthrough programs, the project aims to boost the city's logistics service revenue by 20 percent while the sector should contribute 12 percent of gross regional domestic product by 2030.

The project will promote building roads, waterways, and railways, as well as inland container depots, warehouses and distribution centers, in an effort to facilitate Vietnam's business development and to strengthen its economic prowess.

There are 1,500 warehouses in Vietnam's largest city but most of them are inefficient and poorly managed, according to the project document. That's why the municipality needs to enhance the efficiency of its logistics infrastructure to cater to the rising new economy.

BEST’s flagship sortation center in Ho Chi Minh City will incorporate a range of cutting-edge sorting and scanning technologies that enable increased processing capacity and less manual work.

"Southeast Asia is our largest international market and we will continue to invest in the region with determination and confidence," said Johnny Chou, Chairman and Chief Executive of BEST Inc. "Through our developments rolled out in Southeast Asia, BEST aims to provide retailers and merchants cost-effective solutions with high-quality customer service by leveraging our technological advantages and expertise from local partners and talent."

Last month, BEST finished expanding at its Bangkok sortation center in Thailand to better handle an increasing volume of parcels moving through the nation.

The project added 4,400 square meters of space to the existing facility and upgraded it with high-speed automated sorting lines as well as advanced dimension and weight scanning solutions to enable the express hub to double its daily processing capacity to 400,000 parcels. Currently, BEST operates 16 express hubs and about 1,000 last-mile delivery stations in Thailand and Vietnam.

Since 2019, BEST has established express delivery networks in Thailand, Vietnam, Malaysia, Cambodia and Singapore, with surging business volumes in these regions. In the third quarter, BEST reported an eightfold jump in the number of processed packages in these five markets. During the latest Double 11 shopping festival, the daily volumes of BEST’s express services in Southeast Asia were three times the usual.

The trend is in line with the rapid growth of online businesses in the region. This year, Southeast Asia's e-commerce gross merchandise volume is expected to increase by 63 percent from a year ago, according to a report by Google, Temasek, and Bain & Co.

Editor: Emmi Laine