ASEAN E-commerce Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

ASEAN E-commerce Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

ASEAN e-commerce logistics is expected to experience a growth rate of more than 6% during the forecast period (2021 - 2026). Asia is benefiting more than any other region in the world when cross-border e-commerce has introduced new dynamics to international trade.

Singapore and Malaysia are among the countries with the highest quality of overall infrastructure, while others are either at or below the world average level. There are significant gaps in logistics infrastructure across countries. As for the region, the development still faces obstacles from poor quality of roads, incomplete road and railway networks, inadequate ports, and low service capability. However, the explosive growth of e-commerce and expansion of intra-regional markets favor the logistics industry.

International businesses are expected to benefit from ASEAN’s FTA network with reduced importer costs, improved custom clearances, and increased access to products eligible for preferential treatment. In addition, FTAs, like ASEAN-Australia-New Zealand Free Trade Area, ASEAN-China Free Trade Area, ASEAN-India Free Trade Area, ASEAN-Republic of Korea Free Trade Area, and ASEAN-Japan Comprehensive Economic Partnership, add to reduced logistics costs and improved efficiencies in the region.

Key Market TrendsGrowth in E-commerce in the Region

The Association of Southeast Asian Nations (ASEAN) member states, such as Singapore, Malaysia, and Indonesia, have been among the world’s top markets with the highest online shopping penetration rate. E-commerce in ASEAN member states is projected to achieve a double-digit average rate of growth. Indonesia has the largest and fastest-growing market contributing to nearly 45% of regional e-commerce revenue.

For ASEAN, the benefits of e-commerce go beyond creating trade and business opportunities. It also contributes to social cohesion and the region's overall economic development, which are important elements for regional integration.

The coronavirus pandemic has resulted in a new normal for communities with social isolation, work from home (WFH), and online shopping. As more people stay indoors over virus fears, consumers have turned to e-commerce for their everyday essential purchases, such as groceries and computer equipment.

Top players in this industry, such as Lazada, Shopee, and Tokopedia, spearheaded this growth before the COVID-19 outbreak by providing scalable, readily accessible platforms where smaller retail players may transact online and reach new consumers within and beyond Southeast Asia.

Swift Development of Infrastructure

The United States and China are promoting competing economic programs in Southeast Asia. China’s Belt and Road Initiative (BRI) lends money to developing countries to construct infrastructure, primarily in transport and power. The Master Plan on ASEAN Connectivity (MPAC) 2025, adopted by ASEAN Leaders in September 2016 in Vientiane, Lao PDR, aims to achieve a seamlessly and comprehensively connected and integrated ASEAN that may promote competitiveness, inclusiveness, and a greater sense of community. It comprises fifteen initiatives in the five strategic areas of sustainable infrastructure, digital innovation, seamless logistics, regulatory excellence, and people mobility.

With expanding populations and increasing needs to sustain economic growth, there is heightening pressure on the abilities of infrastructure to cope in ASEAN. Therefore, in addition to investing in new projects, ASEAN Member States (AMS) need to get more out of the existing capacity.

The rail and road networks that contribute as ASEAN’s main economic corridors had been an ongoing priority. Success here has been due in no small part to the Chinese government’s financing and BRI projects. Until the COVID-19 pandemic, Chinese investments in regional connectivity —roads, railway lines, bridges, and ports — were creating all-new levels of regional connectivity.

Competitive Landscape

As the demand for logistics services is growing rapidly across the region, companies are becoming more competitive to capture the huge opportunity. As a result, international players are making strategic investments to establish a regional logistics network, such as opening new distribution centers, smart warehouses, etc. Some of the leading players include DHL, Kerry Express, and Best Express, among others.

The growth of e-commerce is an important factor spurring the development of courier services. Increasing consumption and growing internet penetration are boosting e-commerce activity in ASEAN. To maintain cost competitiveness, companies that operate online prefer to work with third-party courier providers instead of hiring in-house delivery staff. As a result, global companies are actively investing in targeting the growth opportunity in the region.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned
 
DHL Express
FedEx Corporation
DTDC Express
DB Schenker
Kerry Logistics
CH Robinson
CEVA Logistics
Kuehne Nagel
Nippon Express
Pos Indonesia
JNE Express

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