ShareSTAYING HOT: LOGISTICS MARKET IN SOUTHEAST ASIA
It is predicted that the logistics market in Southeast Asia will explode in the next few years thanks to the fact that more than 600 million consumers have a certain interest in e-commerce.
Southeast Asia logistics market: $55 billion by 2025. In 2018, the internet usage rate in Southeast Asia reached 58% with 3.5 million Internet users accessing the network each month. Continuing with the above figure, consumer behavior continues to increase at a rapid rate every year.
Logistics and E-commerce have a deep relationship with each other, so when the development of e-commerce leads to the growth of the freight industry. When buying an item online is only part of the story – getting it safely to your doorstep is a whole different story. However, with the growth of the e-commerce industry, the prospect of logistics in getting goods to the doorsteps of millions of new online buyers is huge. This is considered an opportunity for many logistics companies.
According to Insight Partners, Southeast Asia’s logistics market accounted for $36.4 billion in 2017. It is expected to grow at a CAGR of 5.5% during the forecast period to 2025, and in 2025 to reach the $55.7 billion mark. That’s a $19 billion upgrade, which is more than $2 billion per year over an 8 years period.
Southeast Asian countries, especially the 10 ASEAN countries are ready to take a “shortcut” in the rapidly growing global digital economy. Prediction is made based on the following criteria:
- Strong economy generates over $2.5 trillion in GDP and 6% annual growth
- Population of more than 600 million people literate, with 40% under 30 years old
- Smartphone penetration is around 35% and growing rapidly
- Well-developed information and communication technology (ICT) cluster with a track record of innovation and investment in new technologies
“Southeast Asian youth use phones and social networks very well, they use technology to overcome geographical barriers, connect with the world” says Regina Lim, JLL’s Head of Capital Markets Research, Southeast Asia.
“Lim believes that the appetite for eCommerce coupled with a lower cost of production could lead to more manufacturers relocating from China to Southeast Asia”.
And just to round out the economic outlook headed toward Southeast Asia, a study by Google and Temasek, reports that “the region’s retail sales are forecast to almost double to $1.38 trillion in 2025 from the $720 billion it recorded last year…and the Internet economy is “expected to exceed $240 billion by 2025.”
Reference Asian Robotics