The Southeast Asian e-commerce logistics market is projected to grow at a CAGR of 20.6 per cent to 2023, providing substantial opportunities for collaboration, according to a recent research report.
The Association of Southeast Asian Nations (ASEAN) e-commerce logistics market has been undergoing rapid growth owing to the development in technological infrastructure, increasing e-commerce sale and growing e-commerce market, according to Orion Market Research.
The ASEAN free trade area (AFTA) enables the smooth flow of goods from one country to another and its fueling rapid expansion of logistics companies. The growing population in major economies such as Indonesia and large numbers of Internet users in the region have increased online e-commerce transactions which is also driving the ASEAN logistics market.
Major players that are contributing to the growth of the ASEAN e-commerce logistics market include: FedEx Express, Avanti Worldwide Express (AWE), DTDC Express, Ixpress Logistics, United Parcel Service (UPS), EMS Indonesian Post, SF Express, C.H Robinson, and DPEX, according to Orion.
The ASEAN region has unique delivery challenges and despite the cost effectiveness and capability of logistics providers in countries like Malaysia and Thailand, there remain obstacles, particularly around last-mile delivery. Large networks of small logistics players are common in metro regions in countries such as the Philippines and Vietnam, however, shipping to the rural areas poses a number of challenges.
To combat this logistics challenge, companies have an opportunity to collaborate with existing or new players, according to Orion. Collaboration not only solves logistic problems, but also enhances the market presence of the logistics players by enabling them to penetrate more deeply into the market.
“The ASEAN e-commerce logistics industry is growing at a significant rate and is expected to grow significantly in the coming future owing to increased Internet penetration rates, consumer spending and the entrance of many new market players in the region,” the Orion report says.
According to Orion analysis, Malaysia, Thailand, Indonesia and Singapore contribute significantly to the e-commerce logistics market and are expected to grow at a CAGR of 22.4, 21.8, 21 and 16.4 per cent respectively. This growth of the e-commerce market in the region will continue to open up the scope of collaboration amongst logistics players, Orion concludes.